By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
The financial technology (fintech) company, valued at over $2.25bn (£1.77bn), said the EU-wide licence made it one of “the largest banks in Europe”.
“Klarna has played a role in disrupting payment services for the better and now, as a consumer-oriented, product-driven and technology-intensive bank, we have the tools to drive change in retail banking,” said Sebastian Siemiatkowski, Klarna CEO, in a statement.
The licence allows the 2005-founded Stockholm-based company to introduce new banking products and services for its customers, currently composed of approximately 70,000 merchants and 60 million consumers. Klarna has yet to clarify what the services will be, or when and where they will be launched.
“The licence gives us many opportunities, including issuing [bank] cards and direct integration into the banking and payments infrastructure,” Klarna spokesperson Aoife Houlihan told Computer Weekly. “This allows us to broaden and enhance our product offering in a really interesting way for consumers and merchants.”
The move also sees the company change its legal name to Klarna Bank, but it will continue to operate under the Klarna brand.
“The market will see this as we launch our services. But we believe the banking industry will go from strong local players with a wide product portfolio to global and specialised,” he told the paper.
Klarna started off by assuming responsibility for online retailers’ credit risks and allowing consumers to pay for their online shopping after receiving the goods. The company has since expanded with various payment methods for e-commerce and handles around 450,000 transactions per day. The company employs circa 1,500 people, mostly in Stockholm, and processes around 40% of all online payments in Sweden.
Magnus Krusberg, head of PA Consulting Sweden, said Klarna had already proven its capability on the financial market.
“Ten years ago, it took established players by surprise by introducing a legacy payment model using invoices for e-business checkout,” he said. “It will be interesting to see what it can achieve with a broader set of options now it has a full banking licence.”