Klarna Bypassing Visa and Mastercard

The real prize in open banking is not faster checkout, it is moving Klarna from renting payment rails to owning more of the transaction economics. In a card payment, Klarna still pays network and processing fees as money moves over Visa and Mastercard. In a bank to bank flow, the shopper authorizes payment from their bank account and funds move straight to the merchant, which lets Klarna keep more of the merchant fee as margin.

• Klarna had already built the pipes for this through Sofort, which it bought in 2014, then expanded with its open banking platform and bank connectivity across Europe. That matters because pay by bank is only useful if one integration reaches thousands of banks and works inside the same checkout merchants already use.
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• The savings are simple. Card payments include interchange, scheme fees, and processor costs. With PSD2 payment initiation, a provider can start a payment from the customer’s bank account on the merchant’s site, bypassing card rails. Even a roughly 1 point reduction in processing cost would mostly flow through as better transaction margin.
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• This is also why card networks moved into open banking themselves. Visa bought Tink and launched pay by bank in Europe, which shows account to account payments are credible enough that the incumbents would rather participate than be disintermediated. Klarna is not inventing a side feature here, it is attacking a core cost pool in payments.
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The next phase is Klarna turning pay by bank from a niche option into a default funding source inside its checkout and banking products. If adoption rises, Klarna gets a structurally better margin profile and more direct control over how money moves, which makes the business look less like a BNPL reseller on top of card networks and more like a payments network in its own right.