AI-powered payments network and shopping assistant Klarna has been authorised by the FCA to provide credit services and regulated payments in the region of the UK. Klarna established a new UK-based entity entitled Klarna Financial Services UK, which is expected to provide all customer-facing services and solutions in the region.

The authorisation provided by the Financial Conduct Authority applied to Klarna’s regulated credit and payment products, such as the Klarna Term Loan and Klarna Card, which are regulated credit tools. In addition, Klarna Card, One-time card, Instore card, and Open Banking-based payment services also represent regulated payment solutions. The company’s short-term interest-free BNPL products and tools will remain outside the scope of the Consumer Credit Act.

The company will continue to focus on its strategy of protecting clients and customers from bad actors and fraud, while also offering them access to low-cost credit. Klarna’s recent strategy of development Sweden-based payment group Klarna had several partnerships and product launches in the last couple of months, covering multiple different geographic areas around the world. In November 2023, the UK-based cloud payment technology provider Form3 announced its assistance in Klarna’s European payment capabilities, along with SEPA connectivity.

Following this agreement, Form3 was expected to provide Klarna with direct technical access to STEP2 and RT1 through its cloud-based, single API account-to-account (A2A) platform. This was set to enable the company with the possibility to process payments directly instead of depending on other third-party banks or financial institutions. By including SEPA Instant as a payment flow, Klarna was allowed to receive additional payment use cases, while also ensuring that the firm was prepared for the incoming mandate.

The strategic deal solidified the trend that took place in Europe, regarding the large number of organisations that connected directly to payment schemes in order to optimise resilience and their overall end customers’ experience. Earlier in October 2023, Walmart Canada announced its collaboration with Klarna in order to introduce flexible BNPL payment methods for clients from the region who made their purchases online. Throughout this partnership, users and customers from Canada were given the possibility to benefit from interest-free But Now, Pay Later (BNPL) offerings powered by Klarna.

According to the press release published at the time, the solution was set to be made available at checkout on Walmart.ca and through the Walmart Canada and Klarna mobile applications. The companies focused on delivering users more payment choices and flexibility, as well as the capability to save money and manage their overall funds in a more secure and efficient manner. For more information about Klarna, please check out their detailed profile in our dedicated, industry-specific Company Database.

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