Klarna Bank AB

Klarna Bank AB (publ) is a Swedish bank and payments company founded in 2005 and supervised by Finansinspektionen, offering buy now, pay later instalments (such as pay in 30 days or split payments), longer-term financing, a shopping app with virtual one-time cards, a branded card in selected markets, and merchant checkout, risk, and settlement services. It operates across the European Economic Area, the United Kingdom, the United States, and other regions, partnering with a large network of online and in-store merchants. Short-term BNPL plans are typically interest-free; longer tenors and revolving products may carry interest and fees, and late charges can apply depending on jurisdiction and product terms. Klarna conducts credit and affordability assessments that can involve soft or hard inquiries based on locale and product type, and it may report performance to credit bureaus where applicable. As a licensed bank, it offers deposit products in certain countries; eligible deposits with Klarna Bank AB are generally covered by the Swedish deposit guarantee scheme up to the statutory limit, but availability and terms depend on market and product. Merchant pricing is typically a per-transaction fee with settlement timelines and chargeback rules that vary by country and integration method. Security controls include PSD2 strong customer authentication in the EU, encryption, and fraud monitoring, with data processing subject to GDPR in the EU and local privacy laws elsewhere. Financial performance has varied in recent years amid credit losses and cost adjustments, with the company reporting improved profitability trends after 2022. Regulatory treatment differs by market, and BNPL oversight continues to evolve in jurisdictions such as the UK and the US. Key risks include consumer overextension, fees and potential credit impact from missed payments, and for merchants, chargeback exposure and reliance on Klarna’s underwriting and platform operations. Klarna is privately held and headquartered in Stockholm, operating through branches and subsidiaries to meet local regulatory requirements.