Klarna wants a bank charter. The company that built its brand on not being a bank now wants to be a bank. You can't make this up except they already did.
The fintech firm spent years convincing millennials that credit cards were for boomers and that splitting a $40 purchase into four payments was financial innovation. Revolutionary stuff. Now they're filling out the same paperwork as every other institution they claimed to be destroying. The disruption lasted exactly as long as it took for them to realize banks have something fintechs don't: deposit insurance and access to the Federal Reserve's discount window.
Joining a wave of fintech and crypto firms seeking entry to the traditional banking system. That's the phrase. A wave. Like lemmings but with venture capital. These companies raised billions by promising to demolish the old guard and now they're begging that same old guard for permission to join the club. The revolution will be regulated.
Klarna's CEO probably calls this strategic evolution. The rest of us call it what happens when the business model stops working. Buy now pay later sounded great until people started not paying later. Turns out lending money to people who can't afford things has been tried before. Banks even have a term for it. They call it subprime lending and it worked out fantastic in 2008.
Retail traders who bought into the fintech dream at the peak are now holding bags while the company pivots to cosplaying as JPMorgan. They thought they were investing in the future of finance. They were actually funding a very expensive detour back to 1864 when the National Bank Act was passed.
The bank charter application sits on someone's desk in Washington right now. Some regulator has to read Klarna's explanation for why the company that let people finance sunglasses deserves the same privileges as Wells Fargo. That person drinks.
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