Klarna Moves to Bring US Operations In-House With Bid for Utah Bank Charter #

Klarna has filed applications to establish its own bank in the United States. The Swedish fintech submitted paperwork to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to create Klarna Bank USA, a proposed Utah-chartered industrial bank that would operate as a wholly owned subsidiary of Klarna Inc.

The company, best known for its buy now, pay later products, said the charter would let it consolidate payments, savings, credit and merchant services within a single regulated entity. Klarna currently reaches U.S. consumers through partner banks. The filing is a move to run those functions in-house. If approved, Klarna Bank USA would be FDIC-insured and operate with its own independent board, governance and internal controls.

Klarna described the filing as a natural progression for a business that has held a banking license in Europe since 2017. Co-founder and chief executive Sebastian Siemiatkowski said the firm has observed strong demand for a more transparent approach to banking in the U.S., describing an in-house license as the logical next move to give customers tools to borrow responsibly while adding competition and choice to the market.

The proposed bank would be led by Gary Harding, selected as president and chief executive of Klarna Bank USA. According to Klarna, Harding previously served as chairman and CEO of Milestone Bank and as president and CEO of Prime Alliance Bank, with more than a decade of senior leadership in U.S. finance.

Klarna, which trades on the New York Stock Exchange under the ticker KLAR, said its U.S. business has grown substantially, citing tens of millions of American users and hundreds of thousands of participating merchants.

The application comes as other fintech firms have also pursued bank charters rather than relying on banking partnerships. As CNBC reported, payments company Mercury secured conditional approval in April to establish its own bank, part of a broader push by fintech and crypto companies into the traditional banking system. Klarna cautioned that its application still requires regulatory review, and the timing and outcome remain uncertain.

Source: CNBC