Klarna prepares for SEPA instant payments with Form3 partnership
Buy now, pay later (BNPL) firm Klarna has tapped UK paytech Form3 for payment connectivity across the Single Euro Payment Area (SEPA).
Klarna partners Form3 for instant payment connectivity
Following the finalisation of new rules this month to legislate instant payments across Europe, the Swedish BNPL firm is using Form3’s cloud-based, single API account-to-account platform to gain technical access to STEP2, an automated clearing house for mass payments, and the gross settlement payment system RT1, which used for instant credit transfers (SCT Inst).
Both mechanisms are operated by the European Central Bank (ECB) and are integral to Europe’s realisation of instant payments.
Connecting to STEP2 and RT1 will enable Klarna to process payments directly, without the middleman of third party banks. Some of the manual processes performed by these banks, including refunds, returns and recalls, will also be automated by the Form3 platform.
The agreement aligns with Klarna’s strategic plan to “bolster” its European offering and position within the international market, which might also soon include a billion-dollar stock market floatation.
Felix Würtenberger, Klarna’s head of banking, says the partnership “holds the potential” for efficiency gains, cost savings and an enhanced user experience, while Form3 CEO Mike Walters, who describes its new partner as “one of the biggest, most technically-advanced fintechs in the world”, recognises how it answers an “ongoing trend” in Europe.
“This partnership reinforces the ongoing trend in Europe for more organisations to connect directly to payment schemes to improve resilience and their end customers’ experience.”
