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Swedish fintech firm Klarna has begun a pilot launch of its first debit card in the United States, aiming to compete more directly with traditional banks as it expands beyond its buy now, pay later (BNPL) roots.
The card, built in partnership with Visa and issued through Utah-based WebBank, gives users the option to either pay for purchases immediately or spread payments over time with Klarna’s interest-free installment plans. It will work for both online and in-store transactions.
The company, which boasts more than 100 million active users globally, is testing the debit card in the U.S. ahead of a broader rollout later this year across both the American and European markets.
While banks remain the main providers of debit cards in the U.S., Klarna is betting that its hybrid model—offering both traditional debit and flexible BNPL options—can win over younger consumers and those looking to avoid credit card debt. Unlike credit cards, debit cards allow users to spend only what they have, avoiding interest charges altogether.
Since Klarna does not hold a U.S. banking license, the balance account and the debit card are being managed through WebBank.
The physical cards will come in three color options—aubergine, black, and bright green—and Klarna plans to offer one free tier and two paid options that provide varying levels of discounts and cashback perks.
The pilot comes just weeks after Klarna paused its U.S. IPO plans for the second time in recent years. The delay came amid rising market volatility triggered by President Donald Trump’s sweeping new tariffs, which have unsettled global investors.
Klarna, once one of Europe’s most valuable fintech unicorns, has been steadily repositioning itself as a broader payments and banking platform after facing growing competition in the BNPL space.
At its peak, Klarna was valued at $45.6 billion — that figure later dropped to $6.7 billion in a 2022 funding round. Now, it’s expected to return with a valuation north of $15 billion, a source familiar with the plans told Reuters, with pricing likely in early April.
The U.S. represents Klarna’s largest market in terms of revenue, boasting over 37 million customers. CEO Sebastian Siemiatkowski hinted at the likelihood of a U.S. IPO occurring “quite soon”, especially after the company reported its first profitable quarter overall after nearly four years of losses, including four consecutive profitable quarters in the U.S.
Established in 2005, Klarna provides credit to 150 million global shoppers, facilitating the spread of online purchase costs over several weeks. The company processes about 2 million transactions daily across 45 countries.
