Sean Craig

Wed, Jun 4, 2025, 3:30 AM3 min read

A debit card that lets you take out a line of credit … isn’t that just a credit card? Not in 2025, apparently.

Swedish fintech Klarna is piloting its own Visa debit card in the United States, the company announced Tuesday. Unremarkably, it will allow consumers to pay for purchases with their own funds, just like any other debit card. But they’ll also have the option of choosing a short-term buy now, pay later (BNPL) loan to be paid back in small installments.

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Stockholm-based Klarna grew its revenue to $2.8 billion last year from $2.3 billion in 2023 as BNPL adoption widened, powered by younger consumers and others more averse to traditional credit with interest charges. This year, Klarna has continued to boost its profile in the consumer economy. In March, it bested rival Affirm to take exclusive control of BNPL at Walmart, America’s largest retailer.

The same month, CEO Sebastian Siemiatkowski defended a deal to bring Klarna’s lightning-fast access to credit to food delivery service DoorDash after critics joked about the idea of $15 burritos on loan as “the 2008 housing crisis, but for food” and “collateralized DoorDash obligations.” Those jokes were rooted in real concerns, as BNPL loans have come back to bite some consumers. In an April survey by LendingTree, 41% of BNPL users reported making late payments on a loan in the past year, up from 34% in 2023. A quarter of BNPL users reported taking out loans to pay for groceries, up from 14% a year earlier.

Meanwhile, Klarna reported its consumer credit losses rising to $136 million in the first quarter, up 17% year-over-year. The company, which saw its number of active customers cross 100 million in April, has pointed to the much less dramatic growth in the percentage of unpaid loans, which rose to 0.54% in the first quarter from 0.51% a year earlier. And now, of course, those loans will be accessible for cardholders far and wide via Visa:

• Klarna said it plans a wider rollout of the debit card, which already has a 5 million-person waiting list, in the US and Europe later this year. The card will offer one free tier and two paid tiers that include discounts and better cashback rates.

• Because Klarna is not a licensed bank in the US, the debit card and its associated account will be issued by Utah-based WebBank. Not to be outdone, rival payments firm PayPal announced its own Mastercard on Tuesday, issued by Connecticut bank Synchrony, which can tap into its BNPL offering, PayPal Credit.