Buy Now, Pay Later (BNPL) firm Klarna has been given the go-ahead for an Electronic Money Institution (EMI) licence by the Financial Conduct Authority (FCA).

The move means that the FinTech’s 11 million UK customers can now hold and manage funds in a Klarna account.

They will also be able to top up the account from their debit card, use it to shop with Klarna, receive refunds directly into it, and earn cashback when shopping.

Klarna balance and Klarna cashback are already live in the US and cross 14 European countries.

"This authorisation marks Klarna’s next big step in the UK—moving beyond flexible payments into everyday financial management," said Abby Vickers, head of Klarna Financial Services UK, the company's British subsidiary. "While traditional banks are still playing catch-up, Klarna is giving consumers a smarter way to spend—and now, to save too.

"This is what modern money management looks like: save, spend, and get rewarded—without the hassle.”

The company said the authorisation will lay the foundation for further product expansion, adding that it would strengthen its wider ambition to "disrupt traditional retail banking".

In May, the Buy Now, Pay Later giant announced it had reached over 11 million active customers in the UK.

The business has also doubled its merchant base in a year to 60,000.

Argos, eBay, Eurostar, and John Lewis are amongst the companies that have joined Klarna’s commerce network.

Klarna, which launched in the UK 10 years ago, says it is now its third-largest market globally, with revenue up by 30 per cent last year.

The business currently serves 93 million active consumers around the world and over 675,000 merchants.

It offers a range of services including flexible payments, delivery tracking and spending insights.

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