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Klarna Launches Its Own Visa (V) Debit Card

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Klarna is introducing its own Visa debit card in order to expand beyond short-term credit.

Klarna Launches Its Own Visa (V) Debit Card

Klarna, the Swedish fintech company known for its “buy now, pay later” (BNPL) services, is introducing its own Visa (V) debit card in order to expand beyond short-term credit. Called the Klarna Card, it is currently being tested with some U.S. customers before a nationwide launch, with plans to bring it to Europe later this year. This move is part of Klarna’s strategy to rebrand itself as more than just a BNPL company as it prepares for a possible stock market IPO.

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Indeed, Klarna CEO Sebastian Siemiatkowski said that the company wants Americans to think of Klarna as a PayPal-style digital wallet and a neobank, not just as a BNPL provider. The Klarna Card will come with an account that holds FDIC-insured deposits and allows withdrawals, similar to traditional checking accounts. The card also uses Visa’s Flexible Credential technology, which lets users choose how to pay: by debit, credit, or one of Klarna’s pay-later options like “Pay in 4” or “Pay in 30 Days.”

It is worth noting that Klarna is entering a competitive market that includes big banks like JPMorgan Chase (JPM) and Bank of America (BAC), along with fintech firms like Chime. And while Klarna has a full banking license in Europe, it doesn’t have one in the U.S. As a result, it partnered with WebBank, a small bank in Utah, to offer FDIC-insured accounts, which allows Klarna to provide banking-like services in the U.S. even without its own license.

Is Visa a Good Stock to Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on Visa stock based on 23 Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Visa price target of $387.40 per share implies 6.4% upside potential.

See more Visa analyst ratings

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