Klarna launches peer-to-peer payments across Europe

Klarna, the Swedish fintech giant, has launched a peer-to-peer payment service across 13 European countries, marking a significant step in its transition towards becoming a digital bank. This move allows Klarna customers to send money to each other directly through the app, broadening the platform's functionality beyond its established Buy Now, Pay Later (BNPL) services. The initiative aims to provide a more convenient and cost-effective method for users to manage their finances. The new feature enables Klarna users to transfer funds to other registered Klarna customers using a phone number, email, QR code, or saved contact. Once a recipient is selected and the payment amount confirmed, Klarna performs fraud and eligibility checks before processing the transaction. This service requires users to have sufficient funds in their Klarna wallet, and the company plans to expand it to include non-Klarna customers and cross-border payments. This expansion affects Klarna's over 100 million global users, offering them a streamlined way to split bills, send gifts, or transfer money among friends and family. The launch is a key part of Klarna's efforts to evolve from a BNPL provider to a broader financial services platform. Klarna's moves are also in contrast to the US market where such services are already popular. Klarna's CEO, Sebastian Siemiatkowski, highlights the company's commitment to simplifying financial management. With the rapid adoption of its debit card, which garnered four million sign-ups in four months, Klarna is challenging traditional banking models by offering a more user-friendly and potentially cheaper alternative.