Buy now, pay later companies such as Klarna and Block’s Afterpay may face tougher rules in the UK
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Fintech company Klarna is making further inroads into the banking industry with its own checking account-like product and a cash back product that rewards users for purchases through its app.
The company is best known for its “buy now, pay later” loans, which allow consumers to pay for their purchases in interest-free monthly installments. Banking” and encourage customers to transfer their products to banks. Spend and save on its platform.
“These new products make it easier for customers to manage multiple scheduled payments, helping our customers make more frequent purchases with Klarna and become more loyal,” Sebastian Siemiatkowski, CEO and founder of Klarna, told CNBC.
Siemiatkowski said Klarna wanted to “support all consumers with their everyday spending”, adding that the products would allow people to “earn money while shopping and manage it in a Klarna account”.
The two new products are being rolled out in 12 markets, including the US and Europe, and will be displayed as “Balance” and “Cashback” in the Klarna app.
Klarna Balance allows users to store money in a personal bank-like account, which they can then use to make instant purchases and pay off buy now, pay later loans.
Users can also receive refunds for returned items directly into their Klarna balance.
Cash back allows customers to earn up to 10% of the value of their purchases as rewards. Any money earned is automatically deposited into their balance account.
This isn’t Klarna’s first foray into traditional banking. The company offers checking accounts and savings products in Germany starting in 2021.
Now, the company is expanding these banking products into other markets.
Klarna’s EU customers with an official banking license will be able to earn up to 3.58% interest on their deposits. However, customers in the United States will not be able to earn interest.
The launch marks a major advancement for Klarna’s product range as fintech giant Klarna inches closer to its highly anticipated US IPO.
Klarna has not set a firm timetable for the stock listing. However, Siemiatkowski said in an interview with CNBC’s “Closing Bell” in February that an IPO this year was “not impossible.”
“We still have a few steps to go and we need to keep working hard,” he said. “But we are keen to become a public company.”
Meanwhile, a person familiar with the matter told CNBC that Klarna is discussing a secondary stock sale with investors to provide some liquidity to employees.
Sources say Klarna is now valued in the billions on public secondary markets.
