Klarna has partnered with Form3 to provide instant payment connectivity across the Single Euro Payment Area (SEPA).

The Buy Now, Pay Later (BNPL) provider will use Form3’s cloud-based API to gain direct technical access to STEP3, an automated clearing house for mass payments, and RT1 which is used for credit transfers.

This will allow Klarna to process payments itself rather than relying on other banks or third parties.

Form3’s platform will process and manage all of Klarna’s inbound and outbound SEPA payments across these schemes and fully automate some of the manual payment processes such as returns, recalls and refunds.

Form3 claims this will result in significant cost savings and comply with regulatory changes such as the Digital Operational Resilience Act (DORA).

“This partnership holds the potential to drive efficiency gains, cost savings, and ultimately improve the overall experience for our customers and merchants in Europe,” said Felix Würtenberger, head of banking at Klarna. “We enthusiastically embark on this transformative journey with Form3, exploring the immense benefits it brings.”

---