Last year, Visa stunned the European fintech industry by announcing its acquisition of Tink for €1.8 billion ($2.15 billion at the time of the deal). Klarna now wants to compete directly with Tink with a new business unit under its own brand, Klarna Kosma.
Like Tink, Klarna provides an open banking application programming interface (API) with Kosma. Tink and Klarna are headquartered in Stockholm, Sweden. There are other open banking API companies like TrueLayer and Plaid. And it was a competitive space, as Visa also tried to acquire Plaid, but the deal fell through.
With this new strategy, Klarna is essentially saying she is open to business. If you are building a financial product and need to interact with bank accounts, you have another option.
Klarna Kosma is an API that other companies can integrate into their applications and services. These companies can use the Klarna API to access account information, initiate payments, obtain bank details, and update that information on a regular basis.
Klarna is better known for its “Buy Now, Pay Later” products. In some countries, Klarna allows you to connect to your bank account to track your spending and establish a credit score before customers buy in bulk. With today’s move, Klarna is opening up its product to other customers.
“Through Kosma, we are opening the power of our own open banking platform and technology to banks, merchants and fintech companies that share our dream of a world where consumers own their data and banks deliver value to customers, not through data. capture,” Yaron Shair, CTO of Klarna, said in a statement.
In Europe, banks and financial institutions are required to offer open banking interfaces in accordance with the EU Payment Services Directive PSD2. But there is no single standard. The Open Banking API will do all the hard work for you.
Klarna claims to have 15,000 banks in 24 countries. The API is currently focused primarily on European banks, but plans to expand to other markets such as the US, Australia, Canada, and New Zealand are coming soon.
In addition to the Account Information Service (AIS), Klarna Kosma customers can also programmatically initiate payments with compatible banks. This has always been the long-term promise of open banking. If the payment initiation is successful, it can replace card payments or e-wallets such as PayPal. We haven’t reached that point yet, but Klarna definitely wants to have the product when we get there.