Klarna reveals HUGE change for shoppers as it looks to rival online banks

KLARNA has revealed a huge change from today which means customers will be able to send each other cash through the app.

The buy now, pay later (BNPL) firm will enable customers to send money to their friends and family if they are registered Klarna customers, including letting them split bills or simply gift them cash.

They will be able to send the money directly from the Klarna app, and the money will be protected like money sent from a regular bank account.

It will not be in the form credit, but rather customers will need to have money in their Klarna wallet.

To send money, customers need to choose who to send it to using their phone number, email address, a QR code, or by selecting a ‘saved contact’.

After confirming the amount, Klarna will run fraud and eligibility checks before proceeding with the payment. 

Initially, Klarna customers will only be able to send the money to other customers, but the firm said it has plans to soon expand to non-Klarna customers and also to allow payments overseas.

Klarna said the move forms part of a shift towards offering ‘everyday banking’ services, and it is understood that long-term Klarna wants to rival other high street banks, offering a ‘one stop shop’ for customers to manage their money.

The new feature follows the launch of the Klarna flexible debit card, launched last October, with over four million customers already signed up to the card, the firm said. Card payments now make up 15% of Klarna’s total payment volumes.

Sebastian Siemiatkowski, co-founder and CEO of Klarna said: “Customers are sick of the friction and fees of traditional banking, which is why millions signed up to Klarna Card within a few months of launch. 

“With peer-to-peer payments, we’re making it even easier to manage all of your payments through Klarna, now including small transfers, making managing your money quicker, easier, and cheaper.”

While the new lending feature will initially run through traditional banking methods, the company said it is exploring using Stablecoins to increase the speed, reach, and efficiency of its payments.

All change

Last November, Klarna also launched a cash back feature where customers can earn up to 10% back on purchases made at a range of retailers.

The BNPL provider launched a feature where customers can arrange to split payments for purchases they make in-stores such as Primark and JD Sports.

To use the feature, you will need to download the Klarna app and register for the service if you have not done so before.

Recently, the Buy Now Pay Later (BNPL) also began offering a flexible Visa debit card for UK shoppers, which can be converted into a credit card.

The card is linked to your Google or Apple Wallet, so you may need a smartphone to use the service.

Klarna’s payment options are interest-free, but customers can still be charged if they fall behind on payments.

Missing a payment does not trigger interest charges – instead, a late fee may apply which is capped at £5 or 25% of the order value, whichever is the lower amount.

Is Klarna right for you?

It is also worth noting that unlike using a credit card, ‘buy now, pay later’ does not currently give consumer Section 75 protection.

However, this is set to change in July 2026 when new regulations are due to take effect.

Under Section 75 of the Consumer Credit Act, a credit card company can be held jointly liable for a purchase that turns out to be shoddy or does not materialise.

This means a shopper can potentially get a refund from the credit card company if they cannot recover their costs from a retailer.

Those using a debit card or credit card for purchases can also potentially get their money back via the chargeback scheme.

Consumers can take complaints relating to the debit card functionality and Klarna balance to the Financial Ombudsman Service (FOS).

However, its Pay in 3 interest-free instalment plans accessible through the card are currently not regulated under the Consumer Credit Act.

Klarna said it has set up an internal adjudicator which is designed to fulfil a similar role before regulation comes into place.