Klarna Moves Into P2P Payments: Expanding Everyday Banking Across Europe

Swedish fintech giant Klarna has made a strategic move to broaden its financial services by launching instant peer-to-peer (P2P) payments in 13 European countries. Previously best known as a buy-now-pay-later (BNPL) pioneer, this latest expansion brings everyday money movement into the Klarna app, positioning the firm further into core banking territory and challenging traditional payment services offered by banks and mobile wallets.

The new P2P feature allows users of the Klarna app — which already supports deposit accounts and debit card usage — to send money to friends and family using familiar identifiers such as phone numbers, email addresses, or QR codes. The launch signals the company’s intent to become more than a specialist BNPL provider, transforming into a central hub for daily financial activities and digital money management.

Why P2P Matters: Everyday Payments Beyond BNPL

Klarna’s origins are rooted in buy-now-pay-later services, which revolutionised online shopping by letting consumers split purchases into interest-free instalments. Over time, the company has steadily added banking features, including Klarna Balance deposit accounts and a debit card that has attracted over 4 million sign-ups in just four months.

The addition of instant P2P payments is the latest step in this evolution. Traditionally dominated by banking apps and mobile wallets like Zelle in the United States or Swish and Vipps in Scandinavia, P2P transfers enable users to send cash quickly and conveniently — a capability increasingly expected by modern consumers. By integrating P2P payments, Klarna can now support broader everyday use cases, such as:

• Splitting bills among friends
• Sending gifts directly to contacts
• Reimbursing shared expenses
• Transferring cash to family members

At launch, transfers work between Klarna customers, with plans underway to extend functionality to non-Klarna users and support cross-border payments in the future.

How the Klarna P2P Feature Works

Klarna’s P2P payment system is designed to be user-friendly and integrated directly into the existing app interface. Customers can choose a recipient by:

• Selecting a phone number
• Entering an email address
• Scanning a QR code
• Selecting a saved contact

Once the sender confirms the amount to be transferred, Klarna conducts fraud and eligibility checks before processing the payment. This helps ensure secure transactions and protect users against misuse.

In addition, because the feature is built within the regulated structure of Klarna’s banking products, the payments carry the protections and oversight associated with a licensed institution, differentiating them from unregulated peer-to-peer solutions.

Competitive Landscape: Beyond Banking Giants and Mobile Wallets

Klarna’s entry into P2P payments places it in direct competition with established players across Europe. In Nordic markets — particularly in Sweden, Norway, Denmark, and Finland — app-based P2P solutions like Swish (Sweden) and Vipps (Norway) dominate everyday transfers. Klarna’s offering aims to leverage its existing user base and fintech innovation to capture a share of this market.

Furthermore, the firm’s move aligns with broader industry trends in which fintechs extend their services to encompass more traditional banking functions. These include:

• Digital wallets with deposit and payment features
• Contactless payments via debit cards and mobile interfaces
• Budgeting and financial management tools
• Instant transfers between users

Offering P2P payments helps Klarna retain users within its ecosystem for a wider variety of financial needs — reducing friction and boosting engagement across different payment scenarios.

Strategic Implications for Klarna

This latest development is more than a feature update — it fits into Klarna’s broader strategy to transition from a vertical BNPL specialist to a full-stack digital bank. Over recent years, the company has steadily built out its capabilities:

• Launch of Klarna Balance deposit accounts
• Introduction of a debit card accepted globally
• Expansion into contactless payments and tap-to-pay solutions
• Exploration of stablecoin-based payments for future rails

By adding P2P payments, Klarna not only enhances its financial product suite but also strengthens its position as a one-stop app for money movement and management. CEO Sebastian Siemiatkowski has emphasised that consumers are increasingly frustrated with the “friction and fees” associated with traditional banking, and products like P2P transfers help address this gap.

The potential to expand P2P features to non-Klarna users and introduce cross-border transfers in the future — possibly leveraging emerging technologies such as stablecoins — indicates that this is just the first phase of a long-term strategy.

Market Reaction and User Adoption Potential

Initial industry response to Klarna’s P2P rollout highlights significant interest in how the company will integrate these capabilities into everyday financial behaviours. Analysts note that:

• Klarna’s large existing user base gives it an advantage over new payments entrants
• P2P payments could drive greater engagement with the app
• Cross-selling opportunities may arise between payment features and other financial products

However, competition remains intense. Traditional banking apps often include P2P transfers as a core feature, while other fintechs and mobile wallets operate with established network effects within specific regions. Klarna’s success will depend on:

• Ease of use and reliability of the feature
• Speed of expansion beyond the initial 13 countries
• Security and fraud prevention measures
• Future product enhancements such as support for non-users and cross-border transfers

Nevertheless, offering P2P payments aligns with evolving user expectations — particularly among younger, digitally native consumers who prefer seamless, app-based money movement over traditional banking services.

Regulatory and Risk Considerations

As with any financial services expansion, P2P payments introduce regulatory scrutiny, particularly concerning fraud prevention, anti-money-laundering (AML) compliance, and cross-border transfer controls. Klarna’s approach involves eligibility checks and fraud screening within the app, but scaling these protections — especially if extended to non-Klarna users — will require continued investment in compliance infrastructure.

Additionally, as Klarna explores potential use of stablecoins or alternative settlement rails, regulatory clarity around digital assets will influence how far and how quickly such innovations can be integrated into core payment features.

Conclusion: A Strategic Move Toward Everyday Finance

Klarna’s launch of instant peer-to-peer payments marks a significant step in its evolution from a buy-now-pay-later service into a comprehensive digital finance platform. By enabling users in 13 European countries to send money with minimal friction, Klarna is responding to consumer demand for flexible, convenient, and cost-effective payment solutions.

While challenges remain — including competition with established banking and payments apps — the expansion of P2P features positions Klarna to capture a larger share of everyday financial interactions. With future plans to broaden access and explore cross-border and blockchain-based options, Klarna’s P2P payments could become a cornerstone of its larger strategy to redefine how consumers manage and move money.

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