Klarna files for US banking licence
▼ Summary
– Klarna has applied for a US banking licence with Utah and FDIC regulators to create an FDIC-insured bank, with former Milestone Bank chief Gary Harding as its proposed head.
– A US charter would allow Klarna to fund loans with customer deposits, offer checking accounts and credit cards directly, and reduce reliance on partner banks and expensive wholesale funding.
– Klarna is one of several fintechs, including Revolut and Bunq, seeking US charters, a shift from past avoidance to seeing a charter as a competitive advantage.
– CEO Sebastian Siemiatkowski views the Trump administration as more open to newcomers, calling an own licence the “natural next step” to build trust.
– Klarna has over 30 million US customers and $93bn in credit extended, but faces a challenging market where Monzo exited and its own shares trade near half their IPO price.
The Swedish buy now, pay later giant Klarna has formally applied for a US banking licence, betting that a more receptive Washington will let it crack a market that has proven difficult for European rivals. The fintech submitted its application to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to establish Klarna Bank USA, an FDIC-insured institution. If regulators approve the move, former Milestone Bank chief Gary Harding would serve as its head, as reported by CNBC.
From BNPL to full bank
Klarna already operates under a European banking licence, an asset its finance chief once described as a major competitive advantage. In the US, the company has relied on partner banks to offer financial products. It recently launched high-yield savings accounts there, but WebBank, not Klarna, holds those deposits. A US charter would change that arrangement entirely.
Owning a bank would allow Klarna to fund its loans using customer deposits instead of more expensive wholesale capital. It could also offer checking accounts and credit cards directly, bringing payments, lending, and merchant services in-house. The ultimate goal is a cheaper and more self-sufficient American operation.
A crowded race for charters
Klarna is not the only fintech chasing a US banking charter. Revolut applied for one in March, and Dutch challenger Bunq refiled its application this year. The fintech Mercury won conditional approval in April. Once seen as a burdensome regulatory hurdle, owning a charter is now viewed as a strategic advantage.
The timing is also significant. The US banking market has historically resisted European entrants, but Klarna sees the Trump administration as more open to newcomers. “Banking is built on trust,” said co-founder and CEO Sebastian Siemiatkowski. He called securing an own licence “the natural next step” for the company.
Why it matters
Klarna has made a substantial bet on America. It claims over 30 million US customers, offers a US debit card, and has extended more than $93 billion in credit. But the landscape is not entirely friendly. Monzo exited the US to refocus on Europe, and Klarna’s own shares trade at roughly half their September IPO price.
A banking licence would deepen Klarna’s American commitment at a time when investors are demanding more discipline. For now, the company has filed its paperwork. Regulators, and the question of trust, will determine what happens next.
(Source: The Next Web)
