Klarna Pursues U.S. Bank Charter for Expansion Beyond Buy Now, Pay Later

Klarna, the Swedish fintech firm best known for its buy now, pay later offerings, said Monday it has applied to federal and state regulators to establish a U.S. bank subsidiary.

The firm stated that, if approved, Klarna Bank USA would operate as a Federal Deposit Insurance Corp.-backed institution chartered in Utah. Gary Harding, a veteran banker with prior leadership roles at Milestone Bank and Prime Alliance Bank, is slated to lead the proposed U.S. banking entity, according to Klarna.

“We’ve seen firsthand the appetite for a fairer, more transparent approach in the U.S., and our own banking license is the natural next step,” said Sebastian Siemiatkowski, co-founder and CEO of Klarna. “This move will equip customers with the tools to borrow responsibly and foster financial confidence, while simultaneously injecting greater competition, innovation, and choice into the market.”

This strategic application underscores a broader trend within the fintech sector. Many digital financial services providers, which have historically relied on partnerships with established U.S. banks to offer their services, are now recognizing the significant advantages of obtaining their own banking charters. This trend is exemplified by Mercury, a fintech provider that announced in April it had received conditional approval to establish its own bank, signaling a growing wave of fintech and crypto firms seeking direct integration into the traditional banking ecosystem.

Klarna’s proposed charter, contingent on regulatory approval, would enable the company to bring its banking operations in-house, thereby enhancing the reliability and efficiency across its payment, credit, and merchant services offerings.

This application represents a significant evolution in Klarna’s strategy, moving beyond its core buy now, pay later services to become a more comprehensive consumer banking platform. While Klarna introduced high-yield savings accounts to U.S. customers last month, these accounts are currently held through its partner WebBank. Ownership of a banking charter would allow Klarna to directly manage these offerings.

For fintech companies, securing a bank charter offers substantial benefits. It allows them to fund loans using their own customer deposits, a more cost-effective alternative to wholesale financing. Furthermore, it empowers them to directly offer essential banking products such as checking accounts and credit cards, reducing their dependence on third-party banking partners and allowing for greater control over the customer experience and product development.

Klarna, which debuted on the public markets last September, is currently trading at approximately half of its initial public offering price of $40. This valuation, while facing market pressures, sets the stage for the company to leverage its potential banking license to reshape its U.S. market strategy and financial operations.