Key Priorities for 2025:

• Champion fintech innovation: Deliver transparent, user-friendly financial solutions that empower consumers and small businesses.
• Support bank-fintech partnerships: Leverage dual compliance for safe, transparent, and accessible financial services. Strengthen fintech-bank collaborations that uphold regulatory standards like FDIC insurance, ensuring consumer funds are safe and accessible.
• Advocate for Proportionate Regulation: Push for regulations tailored to specific fintech products, like BNPL, to ensure appropriate safeguards without stifling innovation or creating unnecessary consumer complexity.

Fintech has become a driving force in the U.S. economy, helping both consumers and small businesses alike. Whether you're looking for interest-free payment options or a small business owner seeking accessible credit, fintech companies like Klarna are leading the charge toward fairer, clearer, and more flexible financial products. 

As leaders in Washington start to formulate their policy priorities, supporting innovative, and allowing consumer friendly fintech services for the American people to thrive should be a top priority. 

Americans Demand Transparency

The gap left by traditional financial institutions—often bogged down by complex terms and hidden fees—has paved the way for fintech’s meteoric rise. Klarna’s consumer-friendly offerings, such as interest-free BNPL (buy-now-pay-later) services, empower people to manage their financial commitments with clarity and confidence.

In 2023, a survey conducted by Klarna found 96% of users preferred interest-free options over traditional credit cards, signaling a major shift away from complicated, fee-heavy legacy financial systems. Consumers are demanding transparency, and fintech is answering the call.

Dual Compliance of Bank-Fintech Partnerships 

Bank-fintech partnerships seamlessly blend fintech innovation with the regulatory rigor of traditional banking, ensuring dual compliance across key areas like data protection, anti-money laundering, and capital requirements. These collaborations not only enhance safety and transparency but also deliver personalized, efficient services to consumers—offering faster transactions, improved access to credit, and tailored financial solutions. By combining the best of both worlds, these partnerships drive innovation while protecting consumers, fostering trust, and broadening access to essential financial services. It's a win-win for consumers and the economy alike.

Consumers should always know that their money is safe, regardless of whether they are in a relationship directly with a bank or through a partnership. The FDIC has taken steps to provide clarity on the record keeping required by banks to ensure it is clear that a customer’s funds will be insured in the event of a bankruptcy. Klarna supports reasonable steps to ensure that consumers understand the intricacies of FDIC insurance and Klarna will work to ensure customers are protected when working with partner banks. 

Proportionate Safeguards 

While regulation of fintech is necessary to protect consumers, it must be proportionate. Outdated, one-size-fits-all regulation will only slow progress. Instead, we need product-specific, modern regulations that address fintech’s unique risks while fostering innovation. 

For BNPL, we have long advocated for proportionate regulation. Regarding the recent CFPB BNPL Interpretive Rule, as laid out in our comment letter, we think it’s important for regulators to recognize the differences between credit cards and BNPL and regulate appropriately. 

And, as we said in early 2024, these regulations make sense for BNPL: 

• Clearly define BNPL as short-term, interest free credit where total purchase price is repaid in four or fewer installments 
• BNPL providers must provide transparent terms and conditions written in plain english
• BNPL providers must disclose repayment and fee disclosures detailing the total cost of purchase, each payment amount, payment schedules, and potential fees 
• BNPL providers must pause consumer accounts for delinquent payments to prevent loans stacking

The Stakes are High : Policymakers must get this right

Policymakers and regulators must avoid the temptation to force fintech products into outdated regulatory frameworks that don't even work for the industries they were designed for. With U.S. credit card debt now exceeding $1 trillion, it's clear these regulations have failed to protect consumers. 

Simply copying and pasting those rules for fintechs risks creating confusing, overly complex experiences, burdening consumers with unnecessary disclosures and payment terms understood only by lawyers. Such an approach does little to improve consumer outcomes and may actually harm those it seeks to protect.

There's too much at stake to regulate fintechs this way. 

As we look ahead to 2025, we hope leadership in Washington recognizes the transformative potential of fintech in creating a more inclusive, transparent, and resilient economy and designs regulations fit for those products and services.