Klarna gets FCA approval to continue UK payment and credit services
Since Brexit, Klarna has been operating under temporary regulations
Buy now, pay later giant Klarna has been given the green light by the Financial Conduct Authority (FCA) to continue providing regulated payments and credit services in the UK.
Klarna’s term loans, Klarna Card, its payment services and open banking offering have until now all been operating under the FCA’s Temporary Permissions Regime (TPR) which has been in place since Brexit but is due to expire on 31 December.
A few weeks ago Klarna established a new UK-based entity, Klarna Financial Services UK, from which it will provide consumer-facing services in the UK going forward, taking over from Klarna Bank AB, its fully licenced Swedish bank parent company.
“Klarna has always operated under the oversight of the FCA, delivering our regulated products to a very high standard of customer care,” Abby Vickers, the new head of Klarna Financial Services UK said.
“As well as enabling us to continue to provide our regulated products, the FCA approval puts Klarna’s successful UK business on a secure regulatory footing ahead of the expected regulation of BNPL.”
Indeed Klarna’s core buy now, pay later offering remains beyond the scope of the Consumer Credit Act, so the FCA’s approval is not required, but Klarna continues to argue that BNPL products should be brought within the regulator’s remit.