Klarna Expands Debit Card to Anchor US Payments Strategy

As consumers lean on the simplicity and control of debit payments, FinTechs are weaving these cards into their platforms, not just as payment tools, but as vital threads that stitch together expanding ecosystems.

Recent PYMNTS Intelligence research shows the widening embrace of debit: We found, for example, that consumers were 67% more likely to use debit than credit when buying groceries.

And as PYMNTS CEO Karen Webster noted in a recent column, “The most important credential that has emerged for enabling payment and purchase flexibility is not a new type of credit card. It’s the debit card. And it’s not rewards that drive consumer use and adoption of those alternatives. It’s targeted offers and deals that put real money in the pockets of consumers every time they buy, embedded into the apps that those alternative credit providers provide.”

Earnings Spotlight Debit

The latest batch of Q2 2025 results make it clear: Debit cards are no longer optional add-ons, they are central to how FinTech platforms lock users into an expanding bouquet of services, offering a tie-in to lending and banking tools to branded checkout experiences.

Block

Block’s Q2 2025 earnings presentation noted Cash App’s gross profit rose 16% year over year, driven in large part by Cash App Card, alongside Borrow and BNPL initiatives. Their shareholder letter further emphasizes accelerating user engagement and gross profit per transacting active, up 15%, with 26 million Cash App Card actives.

During the earnings call, CFO Amrita Ahuja remarked that “consumer engagement is picking up” and noted Cash App’s banking features, including debit card spending, are key drivers of transactions. The company has indicated that, as detailed in the latest shareholder letter, debit is holding appeal for younger consumers, as active customers “under the age of 25 have higher Paycheck Deposit attach rates and a 40% higher Cash App Card attach rate compared to the rest of our customer base. … In July, we started making Offers on Cash App Card more personalized to help people save at the places they’re already shopping. We’re also focused on enabling customers to unlock higher value rewards as they spend more on Cash App.”

Affirm

Affirm’s Q2 earnings supplement confirms growth in the relatively new Affirm Card, a Visa-issued debit card, with transactions routed via the card versus typical checkout flows. Affirm Card active cardholders surged 97%. Card gross merchandise volume (GMV) grew 132% to $1.2 billion. In-store spending on those cards grew 187% year over year.

As CEO Max Levichin noted on the call with analysts, “The ambitious version of the card future is 10 million cardholders active and something along the lines of $7,500 plus transaction GMV per year.”

Klarna

Klarna’s F-1 report confirms enhancements to the Klarna Card, including real-time transfers and deposits, as part of its U.S. rollout, enhancing the “smarter wallet experience.” As PYMNTS reported in June, Marqeta’s card issuing platform powers the Klarna Card debit card that will allow Klarna customers in the U.S. to use the same card to pay immediately or pay later.

The F-1 stated that Klarna Balance, introduced last year, “allows consumers to Pay in Full or make Pay Later payments without connecting a bank account or a credit or debit card and facilitates the growth of cashback.”

PayPal

PayPal’s results indicated that debit card total payment volume across PayPal and Venmo expanded over 60%, and monthly active debit accounts jumped over 65%, reflecting robust adoption as the company added 2 million first-time debit card users in the U.S.

During the conference call with analysts, CFO Jamie Miller said, “Branded experiences TPV [total payments volume], which includes online checkout, PayPal and Venmo debit, as well as Tap to Pay, posted another quarter of 8% growth. While debit and Tap to Pay spend represent a smaller amount of volume in branded experiences today, they are growing rapidly and are up more than 60% year over year.”

CEO Alex Chriss told analysts, “The best way to think about it is we just want to meet our customers where they are. The more they think about it, they are not delineating between online, offline or agentic commerce. They just think about buying.”

LendingClub

LendingClub’s Q2 earnings report highlighted the launch of its LevelUp Checking account, while offering deposit and debit-like capabilities that enhance its lending ecosystem.

CEO Scott Sanborn explained that adding checking functionality helps embed LendingClub deeper into consumer financial lives, supporting ecosystem expansion. PYMNTS reported when the latest results were announced that Sanborn said the LevelUp Checking has increased the number of checking accounts opened each day by six times since its launch in June.

LevelUp Checking offers customers 2% cash back for on-time loan payments made from this checking account and 1% cash back when using the associated debit card for qualifying purchases, according to company materials.

“We’re rewarding borrowers for their financial discipline while allowing us to benefit from a stickier relationship,” Sanborn said during the call. “While it’s still early, the initial results are encouraging.”