Klarna is synonymous with the “buy now, pay later” trend, and tends to buy until the end of the month, deferring payments or paying interest-free monthly installments.
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Swedish Fintech Klarna – mostly known for its popular “buy now, pay later” service – launching its own visa This is because debit cards are trying to diversify their business beyond short-term credit products.
The company announced Tuesday that it was piloting a pilot agent for a product called the Klarna card. The Klarna card will be released in Europe later this year, the company added.
The move highlights the ongoing efforts from Klarna ahead of the highly anticipated initial public offering, which alienates the image from poster children on buy now, pays for trends later (BNPL) and is considered a comprehensive bank player. BNPL products are interest-free loans that allow you to repay the entire price of an item in a series of monthly installments.
“We don’t just buy Americans now, we don’t just pay later, [with] Klarna CEO Sebastian Siemiatkowski told CNBC’s “The Exchange” last month.
Klarna’s newly announced cards come with an account that allows the Federal Insurance Deposit Corporation (FDIC) to hold insurance deposits and encourage withdrawals, similar to checking accounts provided by mainstream banks.
In particular, the Klarna Card is equipped with the Visa Flexible Credential. It is an American Card Network service that allows users to access multiple sources of funding, such as debit, credit, and BNPL, from a single payment card. Although it is a debit card by default, users can also switch to one of Klarna’s Pay Later products, such as “Pay in 4” and “Pay in 30 Days.”
Klarna is pushed deep into the fiercely competitive consumer banking market. The US banking industry is JPMorgan Chase & Co and Bank of Americachallengers like Fintech Chime are also attracting millions of customers.
Klarna has a full banking license in the European Union, but does not have its own US banking license. However, the company says it can provide FDIC insurance accounts through a partnership with Webbank, a small financial institution based in Salt Lake City, Utah.
Watch: A complete CNBC interview with Klarna CEO Sebastian Siemiatkowski
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