STOCKHOLM, Sweden—Klarna, which has grown quickly in the U.S. with its buy now, pay later financing solution, is now offering open banking-powered settlements in the U.K.
“The launch means consumers can now pay Klarna directly from their bank account instead of using a debit card, bypassing card networks and marking a major milestone in Klarna’s ambition to build a payments network of the future,” Pymnts.com said in its analysis. “According to a news release, the launch gives open banking a major boost in the U.K., as Klarna has 18-million British customers in a country where around five million consumers make open banking payments per months.”
Wilko Klaassen, Klarna’s VP-open banking, told the publication, “Open banking offers a huge opportunity for Klarna to reduce the cost of payments to society by cutting out the established card payment networks, and using up-to-date bank account data to make ever better lending decisions. This new launch builds on the success we have seen in 10 countries across Europe and will give U.K. open banking a major boost.”
How it Works
To make payments, Klarna users click “Pay by bank,” which takes them to their mobile banking app to complete the payment. The company said linking bank accounts to its platform offers consumers insights into their spending and other budgeting tools.
“Plus, sharing bank data can help Klarna lend money more wisely, using the consumer’s real spending habits, to ensure that Klarna’s lending decisions are an exact fit with the consumer’s budget,” the company said.
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