Klarna introduces open banking settlements in the UK
By Gloria Methri
Klarna, the AI-powered payments network and shopping assistant, has begun to roll out open banking-powered settlements in the UK.
The launch follows that consumers can pay Klarna directly from their bank account instead of using a debit card, bypassing card networks.
Klarna has already launched open banking settlements for its Pay Now instant payment option, and ‘Pay in 30’ and ‘Pay in 3’ are scheduled for later in 2024.
The launch of Klarna’s 18 million UK customers gives open banking a significant boost in the UK, where approximately 5 million Brits use open banking payments each month.
For consumers, open banking settlements are simple, secure, and instant. There is no need to enter payment details into an unknown retailer’s website. To make the payment, a consumer clicks on ‘Pay by bank,’ which takes them to their mobile banking app, where they complete the payment quickly and securely.
Consumers who link their bank account to Klarna can access additional budgeting tools and get insights into all their spending within the Klarna app. Sharing bank data can also help Klarna lend money more wisely, using the consumer’s real spending habits to ensure that Klarna’s lending decisions are an exact fit with the consumer’s budget.
“Open banking offers a huge opportunity for Klarna to reduce the cost of payments to society by cutting out the established card payment networks and using up-to-date bank account data to make ever-better lending decisions. This new launch builds on the success we have seen in 10 countries across Europe and will give UK open banking a major boost,” said Wilko Klaassen, VP of Open Banking at Klarna.
Outside the UK, Pay Now by Bank is available in 10 countries around the world and is regularly used by over 20 million consumers each month.
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July 19, 2024
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