March 28, 2019

Klarna announces Open Banking Platform, making it easier to capitalise on PSD2

By Luke Christou

Financial services provider Klarna has announced its new Open Banking Platform, which will provide fintechs with easy access to thousands of banks across Europe.

Open banking refers to the concept of banks allowing third parties access to their data through application programming interfaces (APIs). The European Union’s Revised Payment Service Directive (PSD2) recently made open banking a must for financial providers. The directive forces European banks to allow businesses and customers to manage their finances through a third-party provider.


Read more: What is open banking and why does it matter to business?


According to the European Banking Federation, there were 6,250 banks operating in the European market in December 2017. Klarna’s platform will provide access to more than 4,300 of these institutions through a single API, allowing third parties to reach 99% of customers in 14 European markets.

Delivering PSD2 through the Klarna Open Banking Platform

The platform hopes to allow financial institutions, both established providers and startups, to cover the entirety of the European market with personalised offerings, helping to provide consumers with the choice, control and clarity that PSD2 set out to offer.

The platform will provide access to developer-friendly tools and solutions designed to aid providers in delivering a user-friendly experience that complies with the various data protection laws. For providers, this will mean reduced spending on open banking technology, while for consumers it will mean a shorter wait for new, innovative solutions to reach the market.

Klarna’s Open Banking Platform will run on its Access to Account API (XS2A), which has been developed and refined over the past 15 years through Sofort, a payment service provider that is part of the Klarna Group. This will allow access to account information services and payment initiation services.

“At Klarna, we have an unparalleled depth of experience and capabilities in XS2A, and for over 15 years, we have succeeded in the midst of huge complexity,” said Koen Koppen, Chief Technology Officer at Klarna.

“Now in the midst of further change and transformation from the PSD2 legislation and steps towards European Open Banking, we can enable other fintechs, banks and others to develop, test and bring new services and products to the market at a faster pace, through our Platform and by integrating with our single API.”


Read more: Adapt to survive: What’s next for open banking?