Klarna is taking another major step beyond its buy now pay later roots with the launch of a new peer to peer payments feature across 13 European markets, including the United Kingdom. The Swedish fintech giant, long associated with flexible checkout financing, is steadily reshaping itself into a broader digital banking platform. The latest move brings Klarna customers the ability to send money to one another directly through the Klarna app, a capability traditionally associated with mobile banks rather than BNPL providers.
Klarna Steps Into Everyday Money Movement
The new feature allows users to transfer money between Klarna accounts with only a few taps. Customers can pick a recipient by using their phone number, email address, QR code or saved contact list. Once the sender confirms the amount, Klarna performs fraud and eligibility checks before completing the transfer. The funds must already be available in the sender’s Klarna wallet.
For Klarna, the feature is designed to fit into everyday use cases such as splitting a restaurant bill, reimbursing a friend or gifting money. With over 100 million global users, the company sees the service as a natural extension of its growing financial ecosystem.
A Bigger Strategy: Klarna Wants to Be a Bank
The introduction of peer to peer payments is the latest milestone in Klarna’s shift toward becoming a full service digital banking alternative. Over the past year, the company has rolled out a debit card that quickly amassed four million sign ups in only four months. Klarna has also secured an Electronic Money Licence in the United Kingdom, giving it new regulatory footing to build banking style services.
CEO and co founder Sebastian Siemiatkowski says these moves respond to a widespread frustration with legacy banks. According to him, customers are increasingly dissatisfied with the fees, complexity and slow interfaces that define traditional financial institutions. Klarna aims to offer a smoother, low friction alternative that consolidates payments, budgeting and transfers within a single customer friendly app.
Building a Multi Layered Financial Platform
Klarna’s wallet now includes budgeting tools, purchase management, loyalty rewards, an expanding network of merchant integrations and its fast growing debit card product. Adding peer to peer payments makes the platform more complete, allowing users to manage personal transactions in addition to their shopping and spending activity.
The fintech says that while the new feature currently functions only between Klarna users inside participating countries, it plans to expand the service to non Klarna customers and enable cross border money transfers. Such an expansion would further cement Klarna’s ambition to compete directly with digital banks and global fintech players.
Responding to Consumer Shifts and Market Pressure
Klarna’s transformation comes amid a broader change in how consumers think about financial services. Younger users, in particular, expect mobile first products, instant transactions and transparent pricing. Klarna believes its new suite of tools aligns with this shift, offering a single hub where people can spend, track and now send money.
The company is also navigating increasing global scrutiny over credit card fees and consumer interest rates. Speaking to Bloomberg, Siemiatkowski criticised the United States credit card market, arguing that Americans are burdened by excessive fees. His comments followed calls by President Trump for a cap on credit card interest rates, highlighting growing global debate over how consumers pay for and manage credit.
Preparing for the Next Phase of Growth
With peer to peer payments now live, Klarna positions itself more clearly as a challenger to traditional banks, digital wallets and mobile payment platforms. The move strengthens its role in everyday financial interactions and brings Klarna closer to functioning as a full scale financial hub rather than a single purpose BNPL provider.
As Klarna continues launching new products and expanding regulatory approvals, its shift toward a holistic digital banking experience appears to be accelerating, with the peer to peer feature marking a significant milestone in its evolution.