Klarna has received regulatory approval to roll out its Klarna Balance and Klarna Account services in the UK, as the Swedish fintech continues its push to become a full-service payments provider.
Klarna Financial Services UK was granted an Electronic Money Institution (EMI) licence by the Financial Conduct Authority (FCA) on July 30. The approval paves the way for Klarna to launch a suite of financial products for its 11 million UK customers later this year.
Klarna Balance – a digital wallet integrated into the Klarna app – will allow users to hold and manage funds from their Klarna Account. Customers will be able to top up their Klarna Card, receive and send money, and earn cashback on everyday purchases.
According to Klarna, users can receive up to 10% cashback on transactions made through the app, with the rewards deposited directly into their Klarna Balance.
Already live in the US and 14 European markets, the Klarna Balance and Account services are part of the company’s broader ambition to become an all-in-one payments solution, extending beyond Buy Now, Pay Later (BNPL) into everyday retail banking and commerce.
“This authorisation marks Klarna’s next big step in the UK—moving beyond flexible payments into everyday financial management,” said Abby Vickers, Head of Klarna Financial Services UK.
“While traditional banks are still playing catch-up, Klarna is giving consumers a smarter way to spend—and now, to manage their finances too. This is what modern money management looks like: manage, spend, and get rewarded, without the hassle.”
Klarna efforts to step up in the retail banking space highlights the increasingly influential role digital challenger banks are playing in the UK and global sector, with Revolut, Monzo and Starling amassing large-scale customer bases by providing personalised banking services.
BNPL the next regulatory frontier
Now a regulated EMI, Klarna will need to ensure it is compliance with forthcoming BNPL regulations set to be implemented by UK regulators in 2026.
The FCA will oversee the country’s BNPL regulations which look to protect consumers from potential debt pitfalls as firms like Klarna will need to follow standards such as warnings related to instalment-based payments for goods and services.
Upfront checks will also be in order to ensure consumers can repay the full amount of the instalment payment. This will apply to Klarna’s popular ‘Pay in Three’ and ‘Pay in 30 days’ options.
Klarna is one of the most popular BNPL providers in the UK, contributing to the total 10 million users of the payment method this year. Klarna and its CEO, Sebastian Siematkowski, have championed regulation across the UK BNPL sector in recent years.
