Klarna Bank picks Amazon for expanded cloud services
In a move to aid faster expansion and provide more security and regulatory compliance tools, Klarna Bank in Sweden is strengthening its longtime relationship with Amazon Web Services by making it the bank's preferred cloud provider.
Klarna says it will leverage the AWS global infrastructure to support its scale, now at 60 million customers across 170,000 merchants in 17 countries. AWS would also aid Klarna innovation, as it seeks to add services onto its recently launched platform that allows consumers to purchase items from any merchant and pay later in four equal installments with zero interest and fees.
The AWS commitment comes six months after Klarna raised $460 million in equity funding, pushing the company's valuation to $5.5 billion and expanding its Shop Now, Pay Later point-of-sale, online, instant short-term loan feature.
Klarna has built its core banking platform on AWS and plans to develop more on-demand products through the cloud. Klarna's network of more than 4,300 financial institutions will also be available to the bank's online merchants.
“Together with AWS we share a relentless focus on providing choices to consumers, so they no longer have to settle for the status quo,” Koen Koppen, Klarna's chief technology officer, said in a Monday press release. “Our collaboration with AWS has helped us to rapidly innovate and create new services and applications that customers want, in a secure and seamless way."
Klarna launched in 2005 as a way to simplify online retail shopping and provide installment payments, and it began expanding quickly two years ago when global investment firm Permira acquired an equity stake.
At that same time, Visa made a strategic investment in the company as a way to aid its online and mobile reach in Europe and slow alternative third-party payment networks from cutting into the Visa market with financing options linked to pay buttons.
Klarna obtained its banking license from the Swedish government in 2017 and changed its named to Klarna Bank at that time.
"We have worked with Klarna for over a decade and it has been inspiring to see them grow from a Swedish startup to a global financial services powerhouse, using the secure and proven infrastructure of AWS," Andy Isherwood, managing director of AWS in Europe and the Middle East, said in the release.