Klarna seeks U.S. bank charter to expand consumer banking operations

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Klarna seeks U.S. bank charter

Highlights

Klarna applied to U.S. federal and state regulators to establish Klarna Bank USA, aiming for FDIC backing and a Utah charter with Gary Harding as CEO.
Securing a bank charter would let Klarna use customer deposits for cheaper, stable funding, expand into checking and credit cards, and reduce reliance on third-party partners.
Klarna's shares trade at about half their $40 IPO price, and the bank application marks a significant step to diversify revenue and deepen U.S. consumer finance exposure.

Charter plan and expansion strategy

As reported by CNBC, Klarna said Monday that it applied to federal and state regulators to establish a U.S. bank subsidiary called Klarna Bank USA. If approved, the institution would be backed by the Federal Deposit Insurance Corporation and chartered in Utah, with former Milestone Bank and Prime Alliance Bank CEO Gary Harding set to lead the proposed bank, according to the company.

Sebastian Siemiatkowski, Klarna's co-founder and CEO, said the company sees strong demand in the U.S. for a fairer and more transparent banking approach. He said an in-house banking license is the next step in giving customers tools to borrow responsibly while increasing competition, innovation and choice in the market.

Klarna said the charter would allow it to bring banking operations in-house and improve reliability across payments, credit and merchant services. The application also marks the company's latest move toward becoming a broader consumer bank rather than remaining focused mainly on buy now, pay later products.

Fintech charter trend and market implications

Ownership of a bank charter can give fintech firms cheaper and more stable funding by allowing them to use customer deposits instead of relying on wholesale financing. It can also let them offer products such as checking accounts and credit cards directly, reducing dependence on third-party banking partners.

Klarna's filing comes amid a wider push by fintech and crypto firms into the regulated banking system. In April, fintech provider Mercury said it received conditional approval to establish its own bank, and Klarna last month launched high-yield savings accounts for U.S. customers, although those accounts are still held by partner WebBank.

Klarna, the Swedish fintech company, went public last September and its shares are trading at about half of their $40 IPO price. The bank application adds a new strategic layer as the company seeks to diversify revenue sources and deepen its role in U.S. consumer finance.

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