‘Buy Now, Pay Later’ fintech platform Klarna has launched a new open banking business service aimed to help companies connect globally.
Named Klarna Kosma, it is set up to allow financial tech startups to seamlessly connect with bank operators via the use of Klarna’s single API.
Having pre-established relationships with a network of banks across the globe, Klarna is aiming to provide a simple and secure venture for fintechs and merchants so that banks become accessible to many financial institutions.
“Over the past year, the demand for open banking services from financial institutions and fintech start-ups has reached a tipping point,” said Wilko Klaassen, VP of Klarna Kosma.
“Which is why we have built a dedicated business unit which brings together engineering, product management, sales and marketing all together in the same team to focus on this $15bn, fast-growing market.”
This move by the Swedish firm mirrors Visa’s acquisition last June, buying fellow Swede open banking platform Tink. The acquisition, totalling at €1.8 billion ($2.15B), was a move seen at the time of Visa moving firmly into the European open banking space.
Under European law, the Payment Services Directive (PSD2) mandates that bank operators must enable access to third-party providers with the consent of the consumer. This has created a wave for open banking operators to flourish in the European market, affording customers to dictate how their financial data should be handled.
As opposed to acquiring the sale of a prominent open banking firm like Visa, Klarna has launched their sub-company Klarna Kosma as it’s inhouse open banking operator.
Yaron Shaer, CTO of Klarna commented: “With Kosma we are opening up the power of our proprietary open banking platform and technology to banks, merchants and fintechs who share our dream of a world where consumers own their data and banks compete for customers by delivering value, not by locking in data.”
Klarna Kosmo is already being used as a third-party operator in countries such as France, Germany and Italy.