In the recent scenario, the digitisation in the world of finance has changed how the traditional banks used to operate. According to current figures from the Deutsche Bundesbank, the number of bank branches has fallen back to the level of the 1950s. A study by Bitkom from 2019 shows that 7 out of 10 German citizens do their banking on the internet. This is where Klarna is now looking to scale.
In a recent development, the Sweden-based fintech startup that provides e-commerce payment solutions to merchants and shoppers, has announced that it is launching consumer bank accounts in Germany to provide them with further control of their finances.
What does it offer?
Currently available only for a limited number of customers, the fintech will provide them with a Visa debit card and a bank account with a German IBAN, to help them set up direct debits and deposits.
In the Klarna app, customers will be able to track their spending and upcoming payments, with budgeting tools set to be rolled out in the coming months.
Sebastian Siemiatkowski, CEO of Klarna says, “Our focus is to provide a superior shopping experience to our consumers at the intersection of retail and banking. And we know that there’s still massive room for improvement to the way many people bank and save their money today. Users are demanding more seamless, intuitive, and transparent services to meet their daily needs, but many banks still do not cater for this.”
He further added, “We are very excited to introduce Klarna Banking today, bundling shopping and banking in one app and allowing our consumers to bank in the same seamless way as they shop with Klarna.”
In the future, German consumers will also be able to set savings goals and benefit from Klarna’s savings accounts product in the Klarna app, which was launched earlier this year in Sweden.
The company was founded in 2005 in Stockholm by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson. Klarna is an e-commerce payment solutions platform for merchants and shoppers. It enables customers to choose how and when to pay.
The fintech also offers direct payments, pay after delivery options, and instalment plans. Klarna is a regulated bank known for its “buy now, pay later” model that offers shoppers interest-free financing on retail purchases over a period of instalments.
The company has over 200,000 retail partners including giants such as H&M, IKEA, Expedia Group, Samsung, ASOS, Peloton, Abercrombie & Fitch, Nike, and AliExpress. The company claims to be one of the most highly valued private fintechs globally with a valuation of $10.65B (approx €8.66B).
With over 3,500 employees in 17 countries, Klarna’s investors include Sequoia Capital since 2010 and more recently, Dragoneer, Bestseller Group, Permira, Visa, Atomico, Ant Group and Silver Lake, HMI Capital, TCV amongst others.