Buy now, pay later giant Klarna has scored an Electronic Money Institution licence from the UK's Financial Conduct Authority, paving the way for a full-frontal assault on the retail banking market.
The licence, issued to Klarna Financial Services UK (KFSUK), unlocks the launch of new account and cashback features for the company's 11 million UK users.
Already live in the US and across 14 European markets, Klarna balance enables people to hold and manage funds in a Klarna account. Customers will be able to top it up from their debit card, use it to shop with Klarna, receive refunds directly into it, and earn cashback when they shop.
Klarna Cashback will give consumers up to 10% back on purchases made through the Klarna app to spend anywhere Klarna is accepted.
Abby Vickers, head of Klarna Financial Services UK, says: "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 save too. This is what modern money management looks like: save, spend, and get rewarded—without the hassle.”