Klarna secures UK EMI license, aiming to establish itself as a "global digital banking entity"
Klarna Expands Financial Services in the UK with Electronic Money Institution License
Klarna, the global digital bank, has been granted an Electronic Money Institution (EMI) license by the UK's Financial Conduct Authority (FCA), allowing it to expand its financial services in the UK. This license enables Klarna to offer new banking-like products to its UK customers [1][2][3].
With this license, Klarna Financial Services UK (KFSUK) is now authorized to launch its debit card in the UK. The company can hold and manage customer funds, launch Klarna balance accounts, allow top-ups, send refunds, and offer cashback rewards on purchases [1][2][3]. However, the licence does not specify the types of savings accounts Klarna can offer.
Klarna is most well-known for its Buy Now Pay Later (BNPL) offering, but the company is now looking to compete against UK challenger and established banks by offering some banking services. Abby Vickers, Head of Klarna Financial Services UK, stated that the EMI license authorization marks a significant step for Klarna in the UK, moving beyond flexible payments into everyday financial management [1].
Klarna's debit card offering is described as modern money management: manage, spend, and get rewarded without the hassle. The company already has a banking license in Europe, overseen by Swedish regulators, and its UK subsidiary has now been granted an EMI license by the FCA [4][5].
Despite losses at the BNPL fintech more than doubling to $99m in the same period, Klarna's revenues were up 13% year-on-year to $701m in Q1 this year [6]. Traditional banks are reportedly playing catch-up while Klarna is offering consumers a smarter way to spend and manage their finances.
[1] https://www.finextra.com/newsarticle/39092/klarna-granted-uk-electronic-money-institution-license [2] https://www.finextra.com/pressarticle/89535/klarna-secures-electronic-money-institution-license-from-the-uk-s-financial-conduct-authority [3] https://www.reuters.com/business/uk-finance/klarna-granted-uk-electronic-money-license-expand-financial-services-2021-07-01/ [4] https://www.finextra.com/pressarticle/89535/klarna-secures-electronic-money-institution-license-from-the-uk-s-financial-conduct-authority [5] https://www.reuters.com/business/uk-finance/klarna-granted-uk-electronic-money-license-expand-financial-services-2021-07-01/ [6] https://www.reuters.com/business/klarna-revenue-rises-13-q1-2021-as-it-seeks-to-expand-into-banking-2021-05-11/
- Klarna, a prominent fintech player, has been authorized by the UK's Financial Conduct Authority (FCA) to expand its financial services, leveraging technology to provide banking-like products for its UK customers.
- With the Electronic Money Institution (EMI) license, Klarna Financial Services UK (KFSUK) can offer debit card services, manage customer funds, and provide cashback rewards, moving closer to competing with UK banks in the business of everyday financial management.
