Last year, Visa surprised the European fintech industry as it announced that it would acquire Tink for over two billion dollars. A new business unit that has its own brand is what Klarna wants to compete with Tink.
Like Tink, Klarna offers an open banking application programming interface. Both Tink and Klarna are based in Sweden. TrueLayer and Plaid are open banking companies. Visa tried to acquire Plaid but the deal fell through.
With this new strategy, Klarna is saying that it's open for business. If you're building a financial product and need to interact with bank accounts, you have one more option.
Other companies can integrate the Klarna Kosma into their services. The companies can use the Klarna's API to access account statements, initiate payments, and fetch banking information.
Buy now, pay later is what Klarna is known for. In some countries, you can connect to your bank account to get spending insights and establish a credit score before you allow customers to buy something in multiple installments. With today's move, Klarna is opening up its in-house product to other customers.
Kosma opens up the power of our proprietary Open Banking platform and technology to banks, merchants and fintechs who share our dream of a world where consumers own their data and banks compete for customers by delivering value, not by locking in data.
The EU's Payment Services Directive PSD2 requires banks and financial institutions to offer an open banking interface. There is no single standard. You can use open banking APIs.
It covers 15,000 banks in 24 countries. Europe and American banks are the focus of the API so far, but it plans to expand to other markets in the future.
Klarna Kosma customers can use the Account Information Service to initiate payments. The long-term promise of open banking has always been there. It could replace card payments if payment initiation takes off. We are not there yet, but Klarna wants to have a product ready if we get there.
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