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Klarna has received authorisation from the UK's Financial Conduct Authority to operate as an Electronic Money Institution, enabling the Swedish fintech to launch balance and cashback services for its 11 million British customers later this year.
The regulatory approval for Klarna Financial Services UK opens the door for two key products already operating in the US and across 14 European markets. Klarna balance will allow UK consumers to hold and manage funds within a Klarna account, which they can top up from debit cards, use for shopping, receive refunds into, and earn cashback rewards.
The cashback feature promises returns of up to 10% on purchases made through the Klarna app, with rewards paid directly into users' Klarna balance accounts rather than through points-based systems. Customers can then spend these rewards anywhere Klarna is accepted.
Abby Vickers, Head of Klarna Financial Services UK
"This authorisation marks Klarna's next big step in the UK—moving beyond flexible payments into everyday financial management. While traditional banks are still playing catch-up, Klarna is giving consumers a smarter way to spend—and now, to manage their finances too. This is what modern money management looks like: manage, spend, and get rewarded—without the hassle," said Abby Vickers, Head of Klarna Financial Services UK.
The EMI licence was granted to Klarna Financial Services UK Limited, the company's dedicated British entity, building upon existing UK regulatory permissions. The authorisation positions Klarna to expand its product offering beyond buy-now-pay-later services as it seeks to challenge traditional retail banking.
Klarna is a global digital bank and flexible payments provider that has established a significant presence in the UK market since launching its services in the country.
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