Klarna Shakes Up UK Payments With Debit Card and Digital Wallet

Digital bank and flexible payments provider Klarna debuted its debit card and digital wallet in the United Kingdom, according to a Thursday (Oct. 16) press release .

The products are focused on everyday spending, signaling a push by Klarna to disrupt U.K. retail banking and become a daily spending partner for consumers. The move follows Klarna securing eMoney authorization from the Financial Conduct Authority (FCA) in July, per the release.

The Klarna Card , first launched in the United States July 4, is categorized as a debit-first card, the release said. While transactions default to debit, consumers retain the option to apply for a spending plan for purchases when they determine credit is appropriate. The card is powered by Visa ’s Flexible Credential technology, which allows a single card to facilitate multiple payment experiences, including debit, credit and installments.

The card is accepted at more than 150 million Visa merchant locations worldwide and permits foreign currency purchases without incurring foreign exchange fees, according to the release. Debit functionality is available to all customers instantly upon sign-up, although credit options are granted on a case-by-case basis following a credit check.

Globally, the company’s card portfolio accounts for 10% of global transactions, per the release. After its U.S. launch, the Klarna Card reached 1 million sign-ups in 11 weeks.

Klarna Chief Marketing Officer David Sandström described the Klarna Card in the release as offering “the simplicity of debit with the flexibility of credit.”

Klarna balance, meanwhile, acts as a digital wallet, allowing customers to store eMoney, the release said. Users can add and withdraw money, get refunds and earn cash back rewards tied to certain Klarna purchases. The balance can also be used to settle other Klarna payments. A free Klarna balance account is automatically issued to anyone who signs up for the Klarna Card.

In other markets, Klarna balance has helped drive global deposits from $9.5 billion in December 2024 to $14 billion in June, according to the release.

When Klarna announced July 30 that it had received permission to expand financial services in the U.K., it said it planned to grow outside its pay-later roots in the region.

“This authorization marks Klarna’s next big step in the U.K.—moving beyond flexible payments into everyday financial management,” Abby Vickers , head of Klarna Financial Services U.K., said in a press release at the time.