Klarna gives ‘major boost’ to UK Open Banking with launch

AI-powered buy now, pay later provider Klarna has begun rolling out Open Banking settlements to its 18 million UK customers and 32,000 retailers to reduce reliance on card networks.

Open Banking-powered settlements are already available through Klarna’s ‘Pay Now’ instant payment option, and will launch for its ‘Pay in 30’ and ‘Pay in 3’ features later this year.

The launch means that consumers can pay Klarna directly from their bank account, rather than using a debit card.

“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,” said Wilko Klaassen, vice president, Open Banking at Klarna.

“This new launch builds on the success we have seen in 10 countries across Europe and will give UK Open Banking a major boost.”

Consumers that link their bank account to Klarna can get insights into their spending within the Klarna app and can gain access to budgeting tools.

In turn, Klarna uses Open Banking data to lend “more wisely”.

Last November, Klarna received authorisation from the Financial Conduct Authority (FCA) to offer regulated credit services and payments in the UK.

It established a new UK-based entity, Klarna Financial Services UK, to provide all consumer-facing services in the UK.