Klarna Becomes Latest FinTech Entering Mobile Market

Payments company Klarna says it is getting into the mobile business.

The company on Wednesday (June 18) announced plans to launch an “unlimited” phone plan in the U.S. in the weeks ahead before bringing it to the U.K., Germany and other countries.

“Klarna has saved consumers time and money, and reduced financial worry for over 20 years,” Sebastian Siemiatkowski, CEO and co-founder of Klarna, said in a news release.

“With mobile plans we’re taking that one step further, as we continue to build our neobank offering. Consumers already know and love Klarna’s super smooth services and now, with one tap in the Klarna app, they’ll be up and running with their new phone plan — no hassle, no hidden fees, just great value.”

The company says its research finds that more than half of Americans think switching phone plans is too hard. Klarna says that users can switch to its plan by transferring their existing number (or getting a new one), and activating their phone plan from the company’s app, with no need for phone calls, paperwork or store visits.

Klarna’s mobile plans are powered by mobile service operating system Gigs, and come with uncapped, unlimited 5G data, talk and text for $40 per month, with coverage by AT&T.

“Klarna’s push into the mobile space marks the beginning of a new era for connectivity. Now, consumers can expect a seamlessly integrated mobile experience that bundles premium connectivity with financial tools, all through the apps they already know and love,” said Hermann Frank, CEO and co-founder of Gigs.

The launch makes Klarna the latest FinTech entering this space. Revolut introduced its mobile plan in April, while Latin American FinTech Nubank debuted a telecom service dubbed “Nucel” last year in Brazil.

These rollouts are happening at a moment when, as PYMNTS wrote in late March, the mobile phones’ penetration into global market is blurring the boundary between telecom and financial services.

It’s led to a situation, that report added, “where digital banks, and especially neobanks, are moving into communications and mobile payments, and telcos, in turn, are branching more fully into finance.”

Research from the PYMNTS Intelligence report “How the World Does Digital: A Global Benchmark of Consumer Digital Transformation,” found that the infrastructure for digital banking and telecom is pervasive, with most countries surveyed having access to and using mobile phones.

Meanwhile, the Global System for Mobile Communications Association estimates that 4.3 billion people own smartphones, meaning there is a significant greenfield opportunity, as 3.4 billion people remain untapped.