Klarna, a leading global payments and shopping solutions provider, has recently introduced open banking-powered settlements in the UK. This innovative move allows consumers to pay directly from their bank accounts, bypassing the need for debit cards.
By leveraging open banking technology, Klarna aims to create a future-oriented payments network that not only streamlines and secures transactions but also provides valuable insights into consumer spending habits. With over 150 million active users worldwide and 2.5 million transactions processed daily, Klarna is well-positioned to drive the adoption of open banking settlements in the UK.
Initially launched for Klarna’s Pay Now instant payment option, the company plans to extend this feature to Pay in 30 and Pay in 3 later in 2024. This expansion is expected to significantly boost open banking usage in the UK, where approximately five million Britons already utilize open banking payments monthly.
The ‘Pay by bank’ feature allows consumers to easily complete transactions by redirecting them to their mobile banking app for a quick and secure payment process. By connecting their bank account to Klarna, consumers can access spending insights and budgeting tools within the app. Moreover, sharing bank data enables Klarna to make more informed lending decisions based on the consumer’s actual spending patterns, ensuring a personalized fit with their budget.
Wilko Klaassen, VP of open banking at Klarna, emphasized the potential of open banking to lower payment costs and improve lending decisions. He stated, “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. This new launch builds on our success in 10 countries across Europe and will give UK open banking a major boost.”
