Klarna has received approval to offer credit and payment products in the UK, just before a temporary arrangement established post-Brexit is set to expire.
The Financial Conduct Authority (FCA) has authorized the Swedish-based company to provide term loans and card products in the UK. Following Brexit, Klarna Bank, a fully licensed institution in Sweden, operated under the FCA’s Temporary Permissions Regime (TPR), which was due to end on December 31.
It is important to note that this authorization does not extend to Klarna’s primary buy now, pay later (BNPL) service, as it falls outside the scope of the Consumer Credit Act. Klarna has consistently advocated for regulation to safeguard consumers from potential bad actors while maintaining access to affordable credit.
Commenting on the approval, Abby Vickers, head of the newly established Klarna Financial Services UK, stated, “As well as enabling us to continue to provide our regulated products, the FCA approval places Klarna’s successful UK business on a secure regulatory footing ahead of the expected regulation of BNPL.”