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Well, Klarna is branching out the AI-powered global payments network adding new retail banking services. Coming, noting this is a significant step forward in its mission to disrupt retail banking. Joining us now to discuss is Klarna co-founder and CEO, Sebastian Siemiatkowski. Uh, Sebastian, thanks for being here. It's always good to see you and it's late in Stockholm. So, we appreciate uh, you joining us. Um, so as we look at these new products, um, how do they fit into this disruption strategy that you're talking about that sort of came from buy now, pay later, but now has branched out into products that are a lot broader than that?

Yeah, I think it's, I'm really excited about this. I mean, if you think about it, to me, it goes back to my early days at Burger King. Back in the days when you used to use a card from a bank, you would press one for debit and two for credit. And then banks stopped doing that because people weren't building as big balances and weren't revolving as much and that meant lower revenue and profit for banks, but it's a healthier credit product, it's a healthier product to choose on a transactional basis whether to use debit and credit. And so now, using having also availability to Klarna balance where you can use that money to spend online is an important part of the debit side of our business. It's actually already, it's not as known in the US, but we are a fully licensed bank in Europe and 30% of our 100 billion dollar volume per year is already debit. So this is a key step in that, but also to your point on the long-term ambition of disrupting the big banks because there is so much to do, especially in the US where payment fees are still substantially higher than what we're used to in Europe.

Um, and Sebastian, as you do get into more of these products that are bank-like, more traditional bank-like products, how do you also continue to differentiate yourself from a traditional bank? Kind of like, what is that value proposition and your sales pitch to a consumer to say, well, you should do this with us and not with a traditional bank?

Well, I think like, you know, already actually this, this strategy started in 15 for us where we sat down and said, where is consumer retail banking going? And we said at some point of time, you'll have this digital financial assistant that will kind of analyze all your spending habits and say things like, hey, I looked into this and I realized that, you know, I can renegotiate your mortgage for you and save you $100 a month, and I'll do all the paperwork, you just have to say yes, right? And when you realize that's where we're heading and with ChatGPT and everything going on, you realize that's going to come further than sooner. Uh, um, then, you know, the conclusion of that is obviously that, that means a much more competitive banking market because a lot of the excess profits we see in banking are due to switching costs. So we want to bring back services that really serve the customer to save them time, save them money. And the information the customer shares with their banks is very extensive. In addition, Klarna also has SKU level data on all transactions. We mean, not only that you spend $100 on Macy's, we know exactly the product and items that you purchase and that information that customers are trusting us with allows us to provide very, very relevant advice and insights to help them do that. So I think that, that's the future of banking very different to the kind of more predatory lending practices that we saw in the 90s. Uh, so I'm very, I'm very optimistic about it, but it will take a few more years to fully accomplish it.

Um, Sebastian, uh, I want to, last time we talked, we asked a little bit about consumer spending and what you guys were seeing. Um, here in the US, we're very focused today on retail sales and on Walmart. And so I'm curious what you're seeing in your customer base in terms of the flow of consumer spending. If you've been seeing any changes since the last time we talked a few months ago.

No, so I, I think like, I was actually more nervous around Christmas when I, in my opinion, some of the pretty good Christmas sales we saw almost nine months ago were mostly discount driven by the retailers. And, and since then, to your point, a lot of, some other retailers are reporting slightly weaker spending, but we are actually seeing now the opposite. We're seeing a very strong trend in the, in, in the spending habits of our customers and considering we have over 35 million users in the US across like top, you know, we, we cover more than 50 of the top 100 US retailers. I think it's pretty, pretty valuable information and it's pretty positive actually.

And Sebastian, of course, I can't let you go without asking you an IPO question. It's you've come to expect it from me, especially since um, today there was a report on Bloomberg that you guys were close to um, hiring Goldman to help lead your US IPO. Any kind of update you want to give us on what we can expect? Can you confirm it's Goldman? Can you tell us when it might happen? What do you think?

I'd love to share with you more when I know, when I know more and more is to be confirmed. But again, look, we, we um, to us, it's always been critical that we want, we want to be a global retail banking. We think there's going to be three or four large global retail banks in the future that are going to, you know, disrupt all the incumbents. We want to be one of them. US was one of the key, uh, important aspects of that. We're now, you know, profitable in the US, we're above a billion dollars in revenue soon in the US. And you know, we, so a lot of the prerequisites have been accomplished that we thought were important for an IPO, and in addition to that, we still have so much opportunity to grow because like, I mean, retail banking is like a trillion dollar market opportunity, right? So there's like just there's like unlimited opportunity to disrupt this industry.

Okay. We'll be in touch, Sebastian. Thanks a lot. Good to talk to you as always.

Same as always. Thank you.

Thanks.