6
votes
Sweden's Klarna becomes biggest fintech firm in Europe – operator valued at $5.5bn after fresh round of investor funding
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- Authors
- Kalyeena Makortoff
- Published
- Aug 6 2019
- Word count
- 401 words
Whenever I've used Klarna, they sent me an electronic invoice which I paid manually. It required no further trust than any other invoice I've ever received.
WTF!? Do Swedish/European banks not support any APIs for securely linking bank accounts to third-party payment processors (and then verifying ownership of that account via random deposit amount confirmation), like the NA ones do?
If not, madness indeed. There is no way in hell I would trust a third-party payment processor with knowing anything more than just my account #.
We do. A secure connection is made for most online payment methods via an independent API that requires your private national ID number (twelve digits) alongside a six digit pin code.
Ah, so this is just these fintech companies being particularly shady/lazy/stupid then?
I'm surprised a third-party processor requiring a user's banking login/password is even legal, TBH, especially in this day & age of regularly occurring large scale data breaches.
I can only vouch for Klarna and Swish here in Sweden that utilise the BankID system to transfer money. All seem reasonably secure (to my limited knowledge in the field) and are pretty widely used here.
I suppose I don't really know nearly enough to comment on whether or not that is secure either. However at least all the payment processors I have linked to my bank accounts (e.g. paypal) have only ever required my bank transfer, institution & account # (all visible on a cheque anyways), and then I verified my ownership of the account via confirming the random amount they deposited. And perhaps I am overly paranoid, but there is absolutely no way I would ever trust a third-party payment processor with my actual banking login & password, as handing those over to someone seems insane to me.
My knowledge in this area is purely limited to being a user, as opposed to anything technical. BankID is used in most online interactions here in Sweden, it isn't purely your bank account number and sort code stored. It is heavily integrated with your government ID and is used when dealing with taxes, unemployment benefit etc online. It is pretty much your legal online ID. You can optionally tie it to your bank account and gain the security it provides to authorise online payments. I'd love if a more technical minded Swede could jump in here and take the baton. I feel a little out of my depth as a layman. :P
Ditto. So I too would love it if someone working in banking and/or datasec could comment on this. :P
Probably they want to get more data (i.e. everything you do with your bank account). It would be interesting to read their privacy policy.
When I last looked into Klarna (admittedly a while ago), they would only negatively report to credit agencies in the US, so you received no potential credit score benefit from accepting and paying off their financing but your score could still take a hit for failing to pay. That felt one-sided to me. Also, a lot of their "buy now, pay later" marketing feels similar to predatory loan companies. I don't know a whole lot about them and haven't used them personally, but they seem a little sketchy to me.
Some of their services are basically consumer loans disguised as regular payments. But they also offer delayed, interest-free payments, which are very useful. For instance, when you order something off Wish and it takes a month to arrive from China, it's nice that the payment's not due until 45 days, and it's nice to be able to deal with a Western company in your own language if the product doesn't show up.