Flexible payments firm Klarna has won regulatory approval to take on digital banks such as Revolut and Monzo.
The Swedish giant’s UK subsidiary Klarna Financial Services UK has been authorised by the Financial Conduct Authority as an Electronic Money Institution, meaning its 11m British customers will be able to hold and manage funds in their Klarna account.
They will be able to top these up from their debit card, use it to shop with Klarna, receive refunds directly into it, and earn up to 10% back on purchases made. They can then spend this anywhere that Klarna is accepted.
Now positioning itself as a global digital bank, these services are already live in the US and across 14 European markets.
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“This authorisation marks Klarna’s next big step in the UK – moving beyond flexible payments into everyday financial management,” said Abby Vickers, head of Klarna Financial Services UK.
“While traditional banks are still playing catch-up, Klarna is giving consumers a smarter way to spend—and now, to manage their finances too.
“This is what modern money management looks like: manage, spend, and get rewarded – without the hassle.”