Klarna, the Swedish fintech giant, has introduced two new products aimed at enhancing its buy now, pay later services.
One of the new offerings is the ability for consumers in the U.S. and 11 European countries to deposit money into a Klarna “balance” account directly from their bank accounts. This balance can be used to make full payments or cover installments when utilizing Klarna’s BNPL service.
While Klarna’s marketing slogan for this feature is “save now, pay later,” it’s worth noting that the money is essentially parked in the account without accruing interest like a traditional savings account.
Additionally, Klarna is allowing consumers to earn cash back on purchases made through the Klarna app at participating retailers. The cash-back amount, which can go up to 10%, will be stored in the Klarna balance account and is funded by the merchants, not Klarna.
Looking ahead, Klarna hinted at potential future benefits that these cash-storing accounts may offer to consumers.
This move marks an interesting shift for Klarna, as it adds banking elements to its initial buy now, pay later model. Klarna introduced a Klarna card in 2019, which was recently made available to consumers in the U.S., offering cash back rewards on selected merchants.
These new products position Klarna to compete in the U.S. credit card landscape against players like Apple, Robinhood, and Affirm. While it may not directly rival digital banks like Revolut just yet, Klarna’s expansion hints at its future direction in the financial services sector.
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