• Klarna has applied for a U.S. industrial bank charter with federal and Utah regulators
• The charter would allow the fintech to provide more banking services directly to customers
• CEO Sebastian Siemiatkowski said the move will increase competition, innovation and consumer choice
• The U.S. has become Klarna's largest market by revenue, driving its banking ambitions
• Klarna joins PayPal and Affirm in seeking banking licenses to reduce reliance on partner banks

Klarna has taken another significant step in its U.S. expansion strategy by applying for an industrial bank charter, signaling its ambition to evolve beyond buy now, pay later lending into a broader provider of banking services.

The Swedish fintech confirmed that it submitted applications on Monday to the Federal Deposit Insurance Corporation and Utah's Department of Financial Institutions seeking permission to establish an industrial loan company, or ILC.

If approved, the charter would allow Klarna to provide a wider range of financial products directly to U.S. customers while reducing its reliance on partner banks.

The move represents a strategic shift for a company that has operated as a licensed bank across Europe since 2017 but has depended on banking partners in the United States, including WebBank, to support many of its consumer finance offerings.

Chief Executive Sebastian Siemiatkowski described the application as a natural progression in Klarna's development.

"Our own banking license is the natural next step, giving customers tools to borrow responsibly and build financial confidence, while bringing greater competition, innovation, and choice to consumers and merchants alike," he said.

Klarna said bringing banking capabilities in-house would enable it to exercise greater control over its products while accelerating the introduction of additional financial services.

Although the company declined to identify all of its current U.S. banking partners, it acknowledged that partnerships have played a central role in supporting its American operations to date.

The application comes as the United States becomes increasingly important to Klarna's long-term growth ambitions.

The company said the U.S. is now its largest market by revenue and is home to most of its investors, reflecting a strategic shift toward North America even though the business remains headquartered in Stockholm.

The decision also places Klarna among a growing group of financial technology companies seeking industrial bank charters.

Earlier this year, PayPal and fellow buy now, pay later provider Affirm submitted similar applications as fintech firms look to expand their product offerings while gaining greater operational flexibility and reducing dependence on third-party banking relationships.

Industrial bank charters have become an increasingly attractive option for technology-led financial firms because they permit companies to offer banking services without becoming traditional bank holding companies, although applicants remain subject to extensive prudential supervision and capital requirements.

Industry analysts say obtaining a banking charter could strengthen Klarna's competitive position as the buy now, pay later sector matures.

While instalment lending remains the company's best-known product, investors have increasingly focused on its ability to diversify revenues through savings products, payments, debit services and other consumer banking offerings.

The application also arrives as competition intensifies across consumer finance. Traditional banks have expanded their own instalment payment options, while digital payment providers continue to broaden their financial ecosystems through lending, deposits and wealth management services.

Against that backdrop, direct access to banking infrastructure is increasingly viewed as a strategic advantage.

Klarna's pursuit of an industrial bank charter follows a turbulent period for the fintech sector.

After listing publicly last year, the company's share price has fallen significantly alongside broader declines across listed fintech businesses as investors reassessed growth expectations and profitability across the sector.

Even so, Klarna continues to position itself as a challenger to traditional banking. Since its founding in 2005, the company has built its business around providing alternatives to conventional credit cards and consumer lending.

A successful banking charter would enable it to deepen that challenge by offering a broader suite of financial products under its own regulatory authorization.

Approval is far from guaranteed, however. Industrial bank charter applications typically undergo extensive scrutiny from both state and federal regulators, with close examination of governance, capital planning, risk management and consumer protection frameworks before any final decision is reached.