Klarna has announced the launch of instant peer-to-peer payments in 13 European countries, including the UK.

The new feature lets Klarna's customers send money to friends or family directly from its app.

To send money, users choose a recipient using a phone number, email address, QR code, or a saved contact.

After confirming the amount, Klarna runs fraud and eligibility checks before proceeding with the payment.

While transfers will initially only work between Klarna users, the company plans to expand to those without an account, as well as cross-border payments. The company is also exploring stablecoin-based payments to run alongside traditional currencies.

As well as the UK, the new service is available in Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Poland, Portugal, Spain, and Sweden,

The company said the move marks the next step in its evolution as a digital bank.

In October last year, Klarna launched a a flexible debit card and digital wallet in the UK after receiving e-money authorisation from the Financial Conduct Authority (FCA).

At the time, the business said that the authorisation represented a significant step in its plans to “disrupt retail banking” and become an everyday spending option for UK consumers.

According to Klarna, the company's new debit card has received over four million sign-ups four months after launch.

The Swedish FinTech's digital wallet “Klarna balance” also enables customers to store e-money in an account where they can add and withdraw funds, receive refunds and cashback rewards for certain purchases.

Since the introduction of Klarna Balance across 12 countries in Europe and the US in August 2024, global deposits have almost doubled, from $9.5 billion to $14 billion by September last year.

Speaking about the company's new peer-to-peer payments offering, Sebastian Siemiatkowski, co-founder and chief executive of Klarna said: “Customers are sick of the friction and fees of traditional banking, which is why millions signed up to Klarna Card within a few months of launch. With peer-to-peer payments we’re making it even easier to manage all of your payments through Klarna, now including small transfers, making managing your money quicker, easier, and cheaper.”

In November last year, Klarna partnered with Sparkassen-Finanzgruppe, Germany’s largest financial services network of public sector banks, to launch variable recurring payments (VRPs).

The move means that all Klarna users with current accounts at participating savings banks will have access to recurring payments directly from their bank accounts.

VRPs are an Open Banking-powered payment method that lets customers connect authorised payments providers to their bank account to make payments on their behalf in line with agreed limits, providing an alternative to direct debits.

Through the new partnerships, customers will be able to set up monthly payment budgets from which recurring payments – such as for streaming services, memberships, or regular online purchases – are automatically executed.

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