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Klara’s journey into the open banking space began back in 2014 when it acquired Sofort, a German direct bank to bank payment service.
Swedish fintech firm Klarna has created an open banking subdivision and business unit via an open banking application programming interface (API) with Klarna Kosma. The buy now, pay later giant seeks to help connect firms building a financial product to a network of thousands of banks across Europe and the United States.
Klarna Kosma will provide financial institutions, fintech, and merchants the connectivity they need to build FS products and services as well as gain access to 15,000 banks in 24 countries through a single API. These financial institutions can use Klarna’s API to access account statements, make payments, get banking information, and have that data refreshed on a regular basis.
Third parties such as Finom, an Amsterdam-based start-up that provides financial management, business banking, and billing services to SMEs and freelancers in France, Germany, and Italy, are already using the platform.
Wilko Klaassen, the VP of Klarna Kosma, speaking after the latest announcement stated that:
“Over the past year, the demand for Open Banking services from financial institutions and fintech start-ups, has reached a tipping point, which is why we have built a dedicated business unit which brings together engineering, product management, sales, and marketing all together in the same team to focus on this $15bn, fast-growing market.”
Klara’s journey into the open banking space began back in 2014 when it acquired Sofort, a German direct bank to bank payment service. Klarna has since refined its service, expanding it to over 20 countries across Europe and the U.S all while experimenting with open banking to power additional in-house services.
Klarna is however well known for its buy now, pay later services. The Swedish firm allows users to connect their bank accounts in some countries to provide spending data and establish a credit score before allowing clients to buy goods in installments. Klarna’s latest development will see it make its in-house product available to other clients today.
Customers of Klarna Kosma can also programmatically initiate payments with compatible banks in addition to using the Account Information Service (AIS).
“With Kosma, we are opening 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,” Yaron Shaer, the CTO of Klarna, stated.
The CTO added that, if payment initiation takes off, it could replace card payments or e-wallets like PayPal. “We’re not there yet, but Klarna definitely wants to have a product ready if we get there,” he said.
Klarna currently covers 15,000 banks across 24 countries. Its API currently has its focus on European and American banks, but it plans to expand to other markets soon, including Canada, Australia, and New Zealand.