Klarna Obtains Authorization to Provide Regulated Payments and Credit Services in UK

Buy now, pay later (BNPL) giant Klarna announced Thursday (November 23) that it has been authorized by the UK’s Financial Conduct Authority (FCA) to provide regulated payments and credit services in the UK. 

Following Brexit, Klarna Bank AB, a fully licensed Swedish Bank, continued to provide regulated services in the UK under the FCA’s Temporary Permissions Regime (TPR). As the TPR will expire on 31 December this year, Klarna has established a new, UK-based entity, Klarna Financial Services UK which will provide all consumer-facing services in the UK. 

“Klarna has always operated under the oversight of the FCA, delivering our regulated products to a very high standard of customer care. As well as enabling us to continue to provide our regulated products, the FCA approval puts Klarna’s successful UK business on a secure regulatory footing ahead of the expected regulation of BNPL,” said Abby Vickers, Head of Klarna Financial Services UK.     

Stated in the company's latest press release, the FCA authorization applies to Klarna’s regulated credit and payment products. Klarna’s short-term interest-free BNPL products remain outside the scope of the Consumer Credit Act, but Klarna has long argued that they should be regulated to protect consumers from bad actors, while continuing to have access to low-cost credit.