Klarna, founded in 2005, has grown into a leading buy now, pay later provider and went public on the New York Stock Exchange in 2024 at $40 per share.
Klarna, a leader in buy now, pay later services, announced Monday that it has filed applications with U.S. federal and state regulators to create a banking subsidiary. According to the company, pending approval, the subsidiary - named Klarna Bank USA - would operate as an FDIC-insured entity with a Utah charter.
Klarna co-founder and CEO Sebastian Siemiatkowski remarked, "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." He added that the move will "give customers tools to borrow responsibly and build financial confidence, while bringing greater competition, innovation, and choice" to the market.
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Klarna's move is part of a broader pattern where digital finance firms pursue independent banking licenses rather than relying on third-party banks, after Mercury was granted approval to form its own bank earlier this year. With a bank charter, Klarna could use customer deposits to make loans, broaden its suite of traditional banking offerings, and internalize more of its payments, credit, and merchant functions - cutting its reliance on outside banking partners. Klarna said that owning a charter would allow it to internalize its banking operations and improve dependability for payments, lending, and merchant services.
The submission represents Klarna's latest effort to evolve into a full-service consumer bank rather than remaining solely a buy now, pay later firm. Last month, Klarna launched high-yield savings accounts for U.S. customers, although those accounts are currently held by its partner WebBank.
The application will go through reviews by both federal and state regulators. Fintech companies have been trying this route more often.
Regulators have been cautious about letting fintech firms become banks. Klarna's application could take months or even years to decide, and the stock price may not move until there is a clear outcome. For now, the company is betting that owning a bank will eventually give it a cheaper way to fund loans - even as its stock trades far below its IPO price.
By securing its own bank charter, Klarna would gain the ability to accept deposits and fund loans internally, reducing costs and reliance on partners like WebBank. This could improve its profit margins amid a competitive buy now, pay later market where many players are struggling to turn a profit. The company's stock, which has fallen to roughly $20 from its IPO price of $40, reflects investor skepticism about its path to profitability. However, the move toward full-service banking may help stabilize its business model.
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