Klarna Banking Expansion
Klarna Pursues U.S. Bank Charter in Utah to Expand Insured Services, Reduce Partner Reliance
Key Points
If regulators approve the applications, Klarna Bank USA would operate as a wholly owned subsidiary of Klarna Inc., with its own board and governance structure and FDIC insurance.
Gary Harding has been named president and CEO of Klarna Bank USA; he previously served as chairman and CEO of Milestone Bank and as president and CEO of Prime Alliance Bank.
Klarna’s U.S. savings accounts are currently FDIC-insured and offered through WebBank, and the new bank charter would enable Klarna to bring these functions in-house.
Klarna has a large U.S. and global footprint, including more than 119 million users worldwide, around 1.1 million merchants, and about 3.4 million daily transactions observed globally.
Klarna has filed applications with Utah regulators and the FDIC to create Klarna Bank USA, a move that would make the Swedish fintech a fully licensed U.S. bank. American Banker reported that the applications target a Utah-chartered industrial bank, a structure that would allow Klarna to offer FDIC-insured payments, savings, credit, and merchant services entirely in-house.
The filing marks a major shift for Klarna, which currently relies on WebBank to offer FDIC-insured savings accounts to U.S. customers. If approved, the new bank would operate as a wholly owned subsidiary of Klarna Inc., with its own board and full deposit insurance, according to Yahoo Finance.
Klarna Wants to Cut Out the Middleman Banks
Right now, Klarna partners with banks like WebBank to handle deposits and other regulated services. A bank charter would let Klarna do all of that itself. That means more control over its products and less dependence on outside partners. TradingView noted the move is a "significant step" toward becoming a full-service financial institution in the U.S.
Klarna argues the change would be good for customers too. The company says bringing banking in-house would create a "more transparent, responsible borrowing experience" for U.S. users. It also says the move would spur competition and innovation across the market.
Banking Veteran Tapped to Lead New U.S. Bank
Klarna has named Gary Harding as president and CEO of Klarna Bank USA. Harding is a seasoned banking executive. He previously served as chairman and CEO of Milestone Bank and as president and CEO of Prime Alliance Bank, according to American Banker.
Klarna Bank USA would have its own governance structure and board. That setup is a standard requirement for industrial banks, which must operate somewhat separately from their parent companies. Regulators are expected to closely review both the FDIC application and the Utah state filing before any approval.
Klarna's U.S. Footprint Is Already Massive
Klarna is not a small player entering a new market. The company already has more than 119 million users worldwide and works with around 1.1 million merchants. It processes about 3.4 million transactions every day globally. That scale gives it a strong argument for why regulators should take its bank application seriously.
Yahoo Finance Australia noted that a bank charter would give Klarna more control over payments, savings, credit, and other financial services in the U.S. Klarna already holds a banking license in Europe, so it has experience running a regulated bank — just not on American soil.
Industrial Bank Charter Is a Proven Fintech Path
Klarna is pursuing a Utah industrial bank charter — the same route used by other fintechs like Square and Goldman Sachs. Utah is known for its business-friendly banking rules. An industrial bank can take deposits and make loans but has fewer restrictions than a full commercial bank.
Still, approval is not guaranteed. UK Yahoo Finance reported that the applications must clear both state and federal review. The FDIC has historically been cautious about approving industrial bank charters for large tech and fintech firms. Klarna's application is likely to face careful scrutiny before any decision is made.
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