Swedish fintech giant Klarna, widely recognized for its “buy now, pay later” (BNPL) services, is branching out by introducing a Visa-powered debit card in the U.S. This new product, called the Klarna Card, marks a strategic shift as the company moves to reduce its reliance on short-term credit offerings. Klarna is initially piloting the card with a limited group of U.S. customers, with a broader rollout across the country planned soon. A European launch is also on the horizon for later in the year.
Klarna Aims to Become Full-Service Bank Ahead of Long-Awaited IPO Launch
The Klarna Card launch is part of a larger effort to reposition the company ahead of its highly anticipated initial public offering (IPO). Klarna is working to evolve its brand identity from being a BNPL-centric service to a more comprehensive banking platform.
BNPL allows users to split payments into interest-free installments, but Klarna aims to be perceived similarly to digital wallets like PayPal and full-fledged neobanks. CEO Sebastian Siemiatkowski emphasized the goal of becoming a broader financial services provider in a recent interview.
Klarna Launches U.S. Debit Card to Expand Beyond BNPL Ahead of Planned IPOThe new Klarna Card goes beyond simple transactions, offering features akin to a traditional checking account. It includes an FDIC-insured deposit account and supports ATM withdrawals. These services are designed to give users more flexibility and deepen Klarna’s involvement in everyday financial activities. This enhancement brings Klarna closer to operating as a digital bank, offering essential banking features to customers who may not use traditional financial institutions.
Klarna Card Offers Flexible Payments While Competing in a Crowded U.S. Market
The Klarna Card is powered by Visa’s Flexible Credential technology, allowing users to switch between various funding sources — debit, credit, or BNPL — with a single card. Although it functions as a debit card by default, users can opt to pay using Klarna’s installment plans like “Pay in 4” or “Pay in 30 Days.” This multifunctional capability could attract customers looking for both financial convenience and spending flexibility.
Entering the U.S. banking sector places Klarna in direct competition with major players such as JPMorgan Chase and Bank of America, as well as fintech startups like Chime. While Klarna holds a banking license in the EU, it lacks one in the U.S. To navigate this, Klarna partners with WebBank, a Utah-based financial institution, enabling it to offer FDIC-insured accounts stateside. This collaboration allows Klarna to expand without the regulatory complexities of acquiring a U.S. banking license, reinforcing its push into mainstream financial services.
