Klarna's Charter Bid Tests the FinTech Banking Model

Klarna filed applications with Utah's banking regulator and the FDIC to establish Klarna Bank USA, a federally insured industrial bank. The Swedish buy now, pay later firm said Monday the charter would let it internalize banking functions it now handles through partners. Consumer deposits already account for more than 90% of Klarna's total funding, a spokesperson said.

An industrial bank, sometimes called an industrial loan company, operates like a standard bank–taking insured deposits, making loans, and accessing the federal payments system–but its parent company does not automatically become a bank holding company under the Bank Holding Company Act. That exemption has made the charter attractive to specialty finance firms and FinTechs for years. Square Financial Services, now part of Block, received one in 2020. Nelnet Bank followed that same year. Thrivent Bank got FDIC approval in 2024.

Getting the charter is neither quick nor automatic. Applicants need state approval before FDIC deposit insurance. Regulators assess capital, management, risk controls, business plans, cybersecurity, and long-term viability. Parent companies must agree to ongoing reporting and examinations under the FDIC's Part 354 framework. After approval, changes to strategy or senior management often require additional regulatory review.

For Klarna, the trade-off is clear. A charter replaces the commercial and operational constraints of sponsor-bank relationships with direct control over deposits, funding, and product development. It also brings the full weight of banking supervision–capital requirements, consumer protection rules, anti-money laundering compliance, and Community Reinvestment Act obligations. The flexibility of operating through partners gives way to a fixed regulatory structure.

Klarna already operates as a licensed bank in Europe. The U.S. application suggests the company sees the same long-term logic in America: owning the deposit base and payment rails reduces dependence on outside institutions and simplifies expansion into savings accounts, merchant services, and lending beyond BNPL installments.

The filing also lands at a time when de novo banking charters are getting a second look. The OCC issued guidance in June that aimed to clarify licensing standards, and federal regulators have signaled they are willing to evaluate new applications on their merits. GM Financial eventually secured an industrial bank charter after revising and refiling its application–a reminder that the process can take multiple rounds.

Klarna's application will test whether regulators are comfortable with a large European FinTech owning a federally insured U.S. bank. The policy questions are familiar: governance, supervision, and the boundary between banking and commerce. For Klarna, the answer is worth the added scrutiny.