Klarna, the Swedish fintech firm, announced Monday it applied to federal and state regulators to establish a U.S. bank subsidiary. The proposed entity, Klarna Bank USA, would be a Federal Deposit Insurance Corporation-backed institution chartered in Utah and led by Gary Harding, former CEO of Milestone Bank and Prime Alliance Bank. The application represents Klarna's strategic push to expand beyond its core buy now, pay later offerings into broader consumer banking services. CEO Sebastian Siemiatkowski stated the move aims to provide customers with tools to borrow responsibly while bringing greater competition and innovation to the market. The charter application follows a broader industry trend, with fintech provider Mercury receiving conditional approval to establish its own bank in April.
Klarna Proposes FDIC-Backed Bank Structure in Utah
Klarna said Monday that Klarna Bank USA would operate as a Federal Deposit Insurance Corporation-backed institution chartered in Utah. Gary Harding, former CEO of Milestone Bank and Prime Alliance Bank, would lead the proposed bank subsidiary. The firm stated that the charter would allow it to bring banking operations in-house and strengthen reliability across payments, credit and merchant services.
CEO Siemiatkowski Cites Demand for Transparent Banking Approach
Sebastian Siemiatkowski, co-founder and CEO of Klarna, said the company has seen firsthand the appetite for a fairer, more transparent approach in the U.S. He described the banking license as the natural next step for the firm. Siemiatkowski stated the move would give customers tools to borrow responsibly and build financial confidence while bringing greater competition, innovation and choice to the market.
Fintech Firms Pursue Bank Charters Following Mercury Approval
Klarna's application follows Mercury's conditional approval to establish its own bank in April. The trend reflects fintech firms' shift from partnering with U.S. banks to owning their own charters. By owning a bank, fintech firms can fund loans with customer deposits instead of more expensive wholesale financing, directly offer checking accounts and credit cards, and rely less on third-party banking partners.
Klarna Launched High-Yield Savings Accounts Last Month
Last month, Klarna introduced high-yield savings accounts to U.S. customers. WebBank holds those accounts under the current partnership structure. The charter application marks Klarna's latest step toward becoming a broader consumer bank rather than just a buy now, pay later provider. Klarna went public last September and is currently trading for about half of its IPO price of $40.
FAQ
What did Klarna announce on Monday regarding its U.S. operations?
Klarna announced Monday it applied to federal and state regulators to establish a U.S. bank subsidiary called Klarna Bank USA, which would be a Federal Deposit Insurance Corporation-backed institution chartered in Utah.
Who will lead Klarna's proposed U.S. bank?
Gary Harding, former CEO of Milestone Bank and Prime Alliance Bank, would lead Klarna Bank USA according to the company's announcement.
Why does Klarna want to own a U.S. bank charter?
Klarna stated the charter would allow it to bring banking operations in-house, strengthen reliability across payments, credit and merchant services, fund loans with customer deposits instead of more expensive wholesale financing, and directly offer checking accounts and credit cards while relying less on third-party banking partners.
