Swedish fintech Klarna is set to enter the mobile market and follow in the footsteps of fellow fintechs moving into the space in an attempt to diversify its revenue streams.
Founded in 2005 by Sebastian Siemiatkowski, Klarna made its name by mainstreaming its flagship buy now, pay later (BNPL) product, which allows shoppers to delay or split payments.
The company is now accelerating its ambitions to expand beyond BNPL by pushing into services offered by neobank competitors such as Revolut and N26, both of which announced plans to enter the telecoms market last month.
Klarna’s mobile plans will initially only be available to US customers before rolling out to the UK and Germany. Klarna mobile phone customers will be able to switch to the service within its app and will pay $40 per month for unlimited data, calls and text. The typical cost for unlimited phone plans in the US varies but generally ranges from $50 to $80 for a single line.
Siemiatkowski said the new product is part of a wider push into building Klarna’s “neobank offerings”.
Klarna’s mobile offering will run on the AT&T network through a partnership with telecoms-as-a-service company Gigs. Much like Revolut and N26, Klarna will enter the telecoms industry as a mobile virtual network operator (MVNOs), third-party companies which can lease or buy access to calls, data and texts from established mobile network operators.
In the US, Klarna’s mobile plans will go toe-to-toe with the country’s biggest telecom providers, which include Verizon, T-Mobile US and AT&T.
For Klarna, it’s another way to diversify its revenue streams following the launch of a debit card product earlier this month.
The company currently makes a large portion of its revenue from merchant fees, which brought in $2.1bn in revenue last year (equivalent to 75% of its transaction and services revenue).
