Klarna UK Secures EMI License

Klarna Financial Services UK, the British arm of the global BNPL and fintech leader, has obtained an Electronic Money Institution (EMI) license from the UK Financial Conduct Authority (FCA), reports PaySpace Magazine. This key regulatory step empowers Klarna to go beyond its core lending and payments offerings by providing full-spectrum e-money services, including digital wallets, real-time money transfers, and reward programs.

The license enables Klarna to store user funds, issue physical and virtual debit cards, and facilitate peer-to-peer payments and account top-ups. The company plans to launch two new services—Klarna Balance and Klarna Cashback—in the UK later in 2025.

Klarna Balance, already live in the US and much of Europe, acts as a digital wallet where users can add funds, pay for purchases, receive refunds, and manage spending. Klarna Cashback allows customers to earn up to 10% back on eligible purchases, credited directly to their Klarna Balance.

This strategic move also opens the door for a broader UK rollout of Klarna’s innovative card products, currently in limited release in the US. These developments mark Klarna’s evolution into a more comprehensive fintech platform, positioning it to compete with UK neobanks like Monzo and Revolut.