Klarna has rolled out a Visa-powered debit card in the United States, the clearest signal yet that the buy now, pay later (BNPL) pioneer intends to be valued as a neobank — not a lender.

The launch matters less for the plastic than for the positioning. Having tracked the BNPL-to-banking migration since 2022, the pattern is now unmistakable: the lenders that defined point-of-sale credit are converging on the everyday-spending, deposit-led model that neobanks built — and they are using card-network “flexible credential” rails to get there. Klarna’s US debit card, powered by Visa Flexible Credential, defaults to debit but lets users toggle to Pay in 4 or Pay in 30, sitting on top of a Federal Deposit Insurance Corporation (FDIC)-insured wallet with access to more than 150 million merchants.

The strategic logic is a bet on economics. BNPL unit economics are thin and funding-cost-sensitive; deposits and interchange are stickier and rerate a company toward a banking multiple. Klarna, fresh from its public listing, is effectively asking US consumers — and investors — to re-file it from “lender” to “bank”. “We are basically a neobank to a large degree, but people associate us still strongly with buy now, pay later,” Chief Executive Sebastian Siemiatkowski told CNBC. (CNBC)

What launched

The Klarna Card is built on Visa Flexible Credential, the technology that lets a single card draw from multiple funding sources — debit, credit, or instalments — chosen at or after the point of sale. The product is a debit card by default, a deliberate distancing from the BNPL label, with the pay-over-time options pushed to a toggle rather than the headline. The pitch is consumer frustration with incumbents. “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,” Siemiatkowski said. (Entrepreneur)

How rivals are responding

Klarna is not alone in the pivot, and the competitive read is the real story. Riverty, the Bertelsmann-owned BNPL business, has just secured a Luxembourg bank licence to push deeper into embedded finance — the European mirror of Klarna’s US move. Affirm has expanded its own debit-plus-instalment card in the US, and Block’s Cash App continues to bolt banking features onto a payments base, a shift away from pure BNPL playing out across the cohort. The direction of travel is the same across all of them: own the deposit relationship, monetise interchange, and treat BNPL as one feature inside a wallet rather than the whole business.

Traditional banks are the counter-party being targeted, and so far the response has been product, not panic — incumbents are leaning on rewards and overdraft-free accounts to defend primary-account status. Card networks, meanwhile, are the quiet winners: Visa’s Flexible Credential turns the BNPL-versus-bank fight into incremental card volume regardless of who wins the customer. That is the cross-vertical synthesis competitors are missing — the neobank land-grab is, underneath, a Visa and Mastercard rails story.

Why it matters

For the fintech sector, Klarna’s repositioning is a test of whether a BNPL brand can credibly become a primary banking relationship in a market dominated by Chime, Cash App, and the megabanks. The prize is the deposit and interchange economics that underpin neobank valuations; the risk is that US consumers keep filing Klarna under “pay later” no matter what the card says. Klarna’s own framing — millions of cardholders within months — suggests early traction, but primary-account displacement is a multi-year contest, not a launch-week metric. For bank product teams and payments executives, the signal is that the BNPL cohort is now competing for the current account, not just the checkout.

The same convergence is visible across the neobank field, from KOHO’s push toward a Canadian bank licence to Wise’s expanding cross-border volumes — fintechs racing to own more of the financial stack rather than a single product slice.

What happens next

Expect Klarna to widen the US rollout and lean on the neobank framing into its first earnings cycles as a public company, where deposit growth and interchange revenue — not BNPL gross merchandise value — will be the numbers it wants investors watching. Watch for Visa and Mastercard to sign more BNPL issuers onto flexible-credential programmes, and for at least one large US bank to answer with its own instalment-at-debit feature before year-end. The plastic is a debit card; the strategy is a balance-sheet reclassification.

This article is informational analysis only and is not financial, investment, or trading advice. Company valuations and funding figures are sourced as cited and may change. Do your own research before making any business or investment decision.

Rick Steves

Rick Steves has seen business and economics through many lenses. He joined the financial services industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Steves' work has appeared in a variety of online publications including FX Street, NewsBTC, FinanceFeeds, and The Industry Spread. Rick has great interest in the dynamics of the trading industry. The never-ending clash between technology, economics, regulation, and more importantly, the people.