Klarna’s Bid Tests Whether FinTech Scale Needs a Charter

FinTechs are treating banking licenses as strategic infrastructure. Klarna’s decision to apply to establish Klarna Bank USA, a Utah-chartered industrial bank, illustrates that shift.

The Swedish company filed applications with both the Utah Department of Financial Institutions and the Federal Deposit Insurance Corp., seeking authority to operate a federally insured industrial bank in the United States.

The company said Monday (July 6) that the proposed institution would allow it to internalize banking functions that today are provided through partners while supporting payments, savings, lending and merchant services.

Klarna already operates as a licensed bank across Europe. Today, much of Klarna’s U.S. banking activity depends on partner institutions. A charter would allow it to assume greater responsibility for deposits, funding and payment operations while remaining subject to banking regulation.

Reached for comment Monday, a Klarna spokesperson referred PYMNTS back to the charter announcement and said, as detailed in the company’s latest earnings release, consumer deposits represented more than 90% of the firm’s total funding.

The Utah filing also arrives as interest in de novo banking charters has revived after several quiet years. Regulatory guidance from the Office of the Comptroller of the Currency issued in June attempted to provide applicants with greater clarity about licensing standards, while federal regulators have shown renewed willingness to evaluate new applications on their merits.

An Industrial Bank Opens Doors and Brings New Obligations

An industrial bank, also known as an industrial loan company, differs from a traditional commercial bank primarily because its parent company is exempt from becoming a bank holding company under the Bank Holding Company Act, provided statutory conditions continue to be met.

At the bank level, however, Utah industrial banks remain FDIC-insured depository institutions that may accept insured deposits, make loans, participate in the federal payments system and issue payment products while complying with capital, consumer protection, anti-money laundering and Community Reinvestment Act requirements.

The charter has long appealed to specialty finance companies and FinTechs. It allows a company to fund lending with insured deposits rather than relying exclusively on warehouse facilities or capital markets. It also permits greater control over payment processing, deposit accounts and product development.

Obtaining the authority is neither quick nor automatic.

Applicants must first receive state charter approval before securing FDIC deposit insurance. Regulators evaluate capital adequacy, management experience, governance, risk controls, business plans, liquidity, cybersecurity, compliance systems and long-term financial viability. Parent companies must also agree to ongoing reporting, examinations and commitments under the FDIC’s Part 354 framework governing industrial banks.

Those obligations continue after approval. Changes to business strategy, senior management and governance frequently require regulatory review, while ongoing examinations subject the institution to the same supervisory expectations that apply to other insured banks. The charter therefore offers greater operational control, but it also replaces much of the flexibility associated with operating through banking partners.

For Klarna, direct ownership of the banking infrastructure could improve funding stability, simplify product expansion and reduce dependence on outside institutions as the company broadens beyond buy now, pay later.

A charter could also give Klarna greater latitude to combine deposit accounts, payments, lending and merchant services within a single regulated institution rather than distributing those functions across multiple banking relationships.

Klarna would not be entering unexplored territory.

Square Financial Services, now part of Block, received approval for its Utah industrial bank in 2020 and uses the institution to support business banking, commercial lending and payment services for sellers. Nelnet Bank also received approval in 2020 and operates primarily in education finance and consumer deposits. Thrivent Bank received FDIC approval in 2024 and began operations in 2025 as an online bank serving a broader customer base beyond its former credit union structure.

Other companies continue to view the charter as attractive. GM Financial ultimately secured approval for its industrial bank after revising and refiling its application, demonstrating that the regulatory process can require multiple rounds of review before regulators are satisfied.

For regulators, each application raises familiar policy questions about governance, supervision and the relationship between banking and commercial enterprises. For applicants, the decision reflects something more practical. Sponsor-bank relationships remain valuable, but they also impose commercial, operational and strategic constraints.

Klarna’s application suggests that for some large FinTechs, owning the banking infrastructure has become worth the additional regulation.