Fintech startup Klarna launches personal accounts and cashback offering to take on banks ahead of IPO

Klarna, the fintech startup known for its buy now, pay later (BNPL) loans, is expanding its services with the launch of a personal account offering deposits and cashback rewards in the U.S. and Europe. This move comes as Klarna prepares for a potential IPO and aims to challenge traditional banks.

As Europe’s most valuable tech startup, Klarna has made a name for itself by allowing consumers to split their purchases into interest-free installments. The new cashback feature will be available to users shopping through Klarna’s app as an additional incentive for customers to shift more of their financial activity onto the platform.

“These products simplify managing multiple payments, encouraging customers to use Klarna for more frequent purchases, which drives loyalty,” said Sebastian Siemiatkowski, Klarna’s CEO and founder.

Siemiatkowski emphasized that Klarna’s goal is to support everyday spending by allowing users to earn money while they shop and manage it within a Klarna account.

According to a report from CNBC, the new offerings, rolling out in 12 markets across the U.S. and Europe, include features labeled as “balance” and “cashback” within the Klarna app. The balance feature acts like a personal account, allowing users to store money, make instant purchases, and pay off BNPL loans. Refunds for returned items can also be directed to this account.

The cashback feature lets customers earn up to 10% back on purchases made at participating retailers, with rewards automatically deposited into their balance account.

This isn’t Klarna’s first step into traditional banking; the company has provided checking accounts and savings products in Germany since 2021. Now, it’s broadening these services to other markets. In the EU, where Klarna holds a bank license, customers can earn up to 3.58% interest on deposits. U.S. customers, however, won’t have access to interest-bearing accounts.

This expansion highlights Klarna’s growing product range as it inches closer to its U.S. IPO. Although the company hasn’t set a firm date for the listing, Siemiatkowski hinted earlier this year that it could happen soon, stating that an IPO in 2024 is “not impossible.”

Founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson, Klarna was created to simplify online shopping with its BNPL model. With over 12 million active users each month and 55,000 daily downloads, Klarna has quickly become a leading provider in the BNPL space.

Last November, Klarna filed the paperwork for its anticipated IPO, and the company also restructured to establish a new holding entity in the U.K. as it prepares for the next chapter in its growth.

Klarna Founders