COLUMBUS, Ohio–Klarna, the fintech best known for its buy now, pay later (BNPL) solutions that have grabbed interchange income and loans from credit unions, is now launching its own Visa debit card—but it comes with some potentially high fees.
The company, which is looking to diversity its business beyond short-term credit products, said it is piloting the “Klarna Card” with some customers in the U.S. ahead of a planned national rollout. Klarna Card will launch in Europe later this year.
The card carries some high fees. Once the card is fully released, it will offer a free tier and two paid tiers, according to a press release. The paid tiers — Member and Plus — will cost $3.49 and $7.99 monthly, respectively, and will include merchant discounts and cash-back rewards.There is also a $1 to $3 charge for using Pay in 4 which will be added to the down payment.
The Klarna Card also has a 28.99% APR.
“The move highlights an ongoing effort from Klarna ahead of a highly anticipated initial public offering to shift its image away from the poster child of the buy now, pay later (BNPL) trend and be viewed as more of an all-encompassing banking player,” CNBC reported in its analysis.
‘Neobank to Large Degree’
Klarna CEO Sebastian Siemiatkowski told CNBC last month that the Sweden-based company wans “Americans to start to associate us with not only buy now, pay later, but [with] the PayPal wallet type of experience that we have, and also the neobank offering that we offer. We are basically a neobank to a large degree, but people associate us still strongly with buy now, pay later.”
Klarna’s newly announced card comes with an account that can hold FDIC-insured deposits and facilitate withdrawals — similar to checking accounts offered by mainstream CUs and other FIs.
While Klarna has a full banking license in the European Union, it does not have its own U.S. bank license. However, the firm says it’s able to offer FDIC-insured accounts through a partnership with WebBank, a small financial institution based in Salt Lake City.
About the Card
Klarna Card is powered by Visa Flexible Credential, a service from the American card network that lets users access multiple funding sources — like debit, credit and BNPL — from a single payment card. It’s a debit card by default, but users can also toggle to one of Klarna’s “pay later” products, including “Pay in 4” and “Pay in 30 Days,” according to CNBC.
