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Klarna is taking aim at the UK’s retail banking sector with the launch of a digital wallet and debit card — its most direct challenge yet to traditional banks’ dominance of everyday consumer spending.
The two new products, Klarna Balance and the Klarna Card, mark the company’s evolution from flexible payments provider to full-spectrum financial services player.
Klarna Balance acts as a digital wallet allowing customers to store e-money, add and withdraw funds, and earn cashback rewards on eligible purchases.
Meanwhile, the Klarna Card — backed by Visa and powered by its Flexible Credential technology — offers a “debit-first” experience with the option to spread payments via Klarna’s credit features such as Pay in 3.
“Traditional banks have taken the trust out of banking,” said David Sandström, Klarna’s Chief Marketing Officer.
“We’re here to change that. Our new Klarna Card puts consumers in control — the simplicity of debit with the flexibility of credit, all wrapped in a beautifully simple experience.”
The launch follows its FCA authorisation to provide e-money services in July and builds on the success of its card and balance products in other major markets.
In the US, their card attracted 1million sign-ups within 11 weeks of launch earlier this year.
Globally, the companies deposit base has grown from $9.5 billion in December 2024 to $14 billion by June 2025, reflecting surging customer engagement with its banking products.
The Klarna Card is already available in several European countries and the US, and is now rolling out across the UK, Denmark, Germany, Norway, and Poland.
It promises no foreign exchange fees, instant availability, and access to Klarna’s popular budgeting and spending tools within the app.
By positioning itself as an everyday spending partner, Klarna is not just expanding its footprint but encroaching on banks’ core territory — current accounts and debit card usage.
For the UK’s incumbents, this represents a fresh competitive threat from a fintech that has already rewritten the rules of consumer credit — and now appears intent on reshaping daily banking itself.
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