Klarna is making a bold move into the UK retail banking sector with the launch of two new products designed to transform everyday spending. The Swedish fintech giant, known for its buy-now-pay-later services, is positioning itself as a comprehensive banking alternative with the introduction of Klarna Balance and the Klarna Card.
Two Products, One Vision
The launch encompasses two complementary offerings that work together to provide a complete spending solution:
Klarna Balance functions as an e-money account where customers can store funds, add and withdraw money, and receive refunds and cashback rewards for certain Klarna purchases. This digital wallet component serves as the foundation for Klarna's expanded banking services.
Klarna Card represents a new approach to payment cards – a flexible debit-first card that allows consumers to make purchases using their balance by default, while offering the option to apply for a spending plan when credit makes more sense for specific purchases. Powered by Visa Flexible Credential technology, the card is accepted at over 150 million Visa merchant locations worldwide, both online and in physical stores.
Taking On Traditional Banks
David Sandström, Chief Marketing Officer of Klarna, didn't mince words about the company's ambitions: "Traditional banks have taken the trust out of banking. We're here to change that and our new Klarna Card puts you in control: the simplicity of debit with the flexibility of credit, all wrapped in a beautifully simple experience."
This launch marks a significant step in Klarna's mission to disrupt retail banking and become an everyday spending partner to UK consumers, moving beyond its core buy-now-pay-later offering into the domain traditionally dominated by high street banks.
Regulatory Green Light and Global Success
The UK product launches follow Klarna's receipt of e-money authorization from the Financial Conduct Authority (FCA) in July 2025, providing the regulatory foundation needed to operate these banking-style services in the British market.
Klarna isn't entering this space untested. The company has already successfully rolled out the card and balance products in other markets worldwide, with impressive results:
- Following the U.S. pilot launch in July, the Klarna Card achieved one million sign-ups in just 11 weeks
- Klarna's card portfolio now drives 10% of the company's global transactions
- Global deposits in Klarna's balance product surged from $9.5 billion in December 2024 to $14 billion by June 2025
What This Means for UK Consumers
The launch represents a convergence of payment methods that could appeal to consumers looking for more control over their finances. By combining the security and straightforwardness of debit payments with the flexibility to choose credit when needed, Klarna is offering an alternative to carrying multiple cards or juggling different apps and accounts.
For UK consumers increasingly comfortable with digital-first financial services, Klarna's entry into everyday banking could intensify competition in a sector that has already seen significant disruption from challenger banks and fintech companies in recent years.
As Klarna continues its evolution from payment facilitator to full-service digital bank, the UK market will be watching closely to see whether its approach to "putting customers in control" can indeed rebuild the trust that traditional banking institutions have struggled to maintain.