Klarna seeks U.S. bank charter in push beyond buy now, pay later

KlarnaThe Swedish fintech firm known for its buy now, pay later offerings said Monday it has filed with federal and state regulators. establishing a US bank subsidiary.

If approved, Klarna Bank USA would be a Federal Deposit Insurance Corporation-backed institution based in Utah, the firm said. Will assume leadership of the proposed bank Gary HardingHe is the former CEO of Milestone Bank and Prime Alliance Bank, according to Klarna.

“We have seen first-hand the appetite for a fairer, more transparent approach in the US, and our own banking license is a natural next step,” said Sebastian Siemiatkowski, co-founder and CEO of Klarna.

He said the move would “bring more competition, innovation and choice to the market while giving customers the tools to borrow responsibly and build financial confidence.”

Klarna’s app is the latest sign that fintech firms, which often partner with US banks to offer services, are now seeing having their own contracts as a significant advantage. In April, fintech provider Mercury said it had received conditional approval to launch its own bank, joining a wave of fintech and crypto firms looking to enter the traditional banking system.

Klarna said its charter, if approved, would allow it to carry out banking activities in-house and strengthen reliability in payments, credit and business services.

The launch marks Klarna’s latest step towards becoming a broader consumer bank rather than just a buy now, pay later provider. Klarna last month introduced It offers high-yield savings accounts to U.S. customers, although its partner WebBank maintains these accounts.

By owning a bank, fintech firms can fund their loans with their own customer deposits rather than more expensive wholesale financing, offer direct checking accounts and credit cards, and rely less on third-party banking partners.

Klarna, which went public last September, is trading at about half its initial public offering price of $40.