Klarna is giving customers the option to add money from their bank account to a new digital wallet called Klarna Balance. The company also introduced a cash-back rewards program where customers can earn up to 10% cash back when using the Klarna app to shop at participating retailers.
In Europe: Klarna already has a banking license and has offered similar services in Germany since 2021. Now it's expanding those services to other European markets including France, Italy, the Netherlands, Austria, and Spain. It'll offer customers interest rates as high as 3.58% for savings.
In the US: Klarna doesn't have a banking license and is operating through partner banks. Its banking services will be limited and more comparable to a digital wallet than a savings account, as the money held isn't protected by the FDIC. There is also no interest offered to US customers.
Who are the mystery banking partners in the US? When asked, a Klarna spokesperson said, “We’re working with a number of partners to bring the product to market in the US. I’m afraid we’re not making the banks’ names public.”
Sounds great Klarna! So let me go ahead and transfer money from my HYSA that's protected by the FDIC into your Klarna Balance where my money is stored in a secret bank, I earn no interest on it, and my deposits are not protected. Great value proposition!
Klarna is making these moves and further expanding their product offering away from BNPL in anticipation of its IPO in the US, where it'll seek to raise $20B. The company is reportedly ready to tap Goldman Sachs to help lead its IPO, according to Bloomberg sources.