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Fintech payments giant Klarna granted banking licence

Swedish point-of-sale specialist now claims to be one of Europe’s largest banks.

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Swedish point-of-sale specialist now claims to be one of Europe’s largest banks.

Klarna, the payment solutions firm with over 70,000 merchant customers, has been granted a full banking licence by Finansinspektionen, the Swedish regulator.

The firm has called getting a banking licence a natural next step, enabling it to broaden its product portfolio for both customers and merchants.

Klarna was founded in 2005 in Stockholm with the goal of making it easier for people to shop online. Its core services revolve around online payment solutions, including pay after delivery and financing options. The company is active across 18 markets and employs more than 1,500 people. It is backed by such well-known investors as Sequoia Capital, Atomico and General Atlantic.

Klarna’s CEO Sebastian Siemiatkowski (pictured) has called the licence an exciting milestone for the European banking sector.

“We are now one of Europe’s largest banks with 60 million customers, 70,000 merchants and working seamlessly across borders,” he said.

Siemiatkowski went on to say that the entire banking value chain is being challenged, with the payments sector seeing the “most profound transformation”.

Klarna has played a role in disrupting payments 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,” he continued.

The ongoing shift towards open banking rules seems to have paved the way for a handful of influential fintech firms to evolve into next-generation banks. Online lenders Zopa and SoFi – which are based in the UK and US respectively – are each attempting to make the transition.

Daniel Döderlein, who is the founder of another Scandinavian fintech firm named Auka, says that European retail banks must now be in damage control mode. He said that with its combination of a banking licence, a wealth of customers, and direct access to account information when PSD2 takes effect, Klarna is “perfectly primed to become a preferred credit provider,” and is on track to become the next Visa.

"What we’re seeing right now is a land grab, with the likes of Apple, Google, Facebook, Amazon, WePay, Ant Financial and disruptors, like Klarna, buying up big,” he continued. “Simplified nationwide payments are the last frontier for retail banks wishing to stay relevant.”

Döderlein’s firm Auka is a mobile payments platform that seeks to help the very retail banks that Klarna is equipping itself to challenge. 

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