International Crypto Delivery System Expands Further
Just about everyone’s heard of Bitcoin – but relatively few know how to buy and hold it. Hot and cold wallets, forks, and coin exchanges… It’s all a far cry from calling up a financial adviser and placing an order for a mainstream financial product. The process of change, ie of increasing normalisation, does however seem inevitable.
Buy-now-pay-later giant Klarna has made its first foray into crypto by teaming up with Swedish cryptocurrency broker Safello.
Through the new partnership, Safello will use Klarna’s open banking infrastructure, giving the brokerage access to over 5,000 banks in 18 countries across Europe.
Safello’s 180,000 customers will now use Klarna’s open banking-powered payment system to buy cryptocurrencies without needing to leave Safello’s platform.
Frank Schuil, CEO of Safello, said: “This is a match made in heaven. Klarna shares our vision of offering a superior user experience without compromising security and compliance.”
“Besides, open banking is an exceptionally exciting area that will play a key role in our future plans.”
The move marks Klarna’s first foray into the world of cryptocurrencies as it works to create a financial ‘super app’.
Philippe Rousseau, senior commercial manager at Klarna, added: “For over 15 years, Klarna has developed a mature and secure financial ecosystem that opens up a range of opportunities for increased innovation and competition.”s
“Safello is a textbook example of consumer-centric innovators who can leverage the strength of our developer-friendly open banking infrastructure and we are very much looking forward to the partnership.”
Just last week, Klarna launched bank accounts for a limited number of its German customers as it moves closer to becoming a one-stop-shop for all its users’ financial seeds.
Klarna already holds a full Swedish banking licence that it was granted back in 2017, ss has been gearing up for this new deposit-taking product for some time now.
The launch of the Klarna bank account comes just over six months after the fintech launched its first savings accounts in Germany, in partnership with fellow fintech Raisin, taking its first tentative steps into the world of digital banking.
Raisin’s German customers could access Klarna’s attractive savings rates through Raisin WeltSparen, with Klarna’s 1-year rate seven times higher than the average savings account in Germany at the time of its launch.
It has also been rumoured that the fintech is in the process of closing another massive $500m funding round, seeing its valuation skyrocket to anywhere between $25-30bn.
Historical Performance And IFISA Process Guide
- Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee).
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
- Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
- Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
- Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
- Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.