Klarna Expands into UK Banking with New Products
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Klarna, the global digital bank, has launched a flexible debit card and digital wallet in the UK, marking its expansion into the UK banking sector. These new products aim to provide consumers with more control over their spending and enhance their financial management capabilities.
The Klarna Balance wallet allows users to hold funds, deposit or withdraw money, and earn cashback rewards on eligible purchases. Its Klarna Card, already active across Europe, is backed by Visa and integrates with Klarna’s mobile app for spending management and rewards. The card can be digitally linked to Apple or Google Wallet and offers both upfront and installment payment options.
This move signifies Klarna’s commitment to broadening its financial services offerings and directly competing with traditional banks in the UK market. The launch follows new FCA authorization for e-money services, enabling Klarna to offer these banking products legally in the UK.
While the products have been praised for their flexibility, experts warn that they may lead to overspending, especially during periods of high inflation. Consumers are advised to understand the risks and potential interest or late fees associated with credit usage. Unlike traditional credit cards, Klarna’s services aren’t yet covered by Section 75 protections, though new regulations may change this by July 2026.
