The pivot to a digital bank

The new tariffs on Chinese goods coming into the US has been bad news for Chinese ecommerce businesses Temu and Shein, but also for businesses such as Klarna, whose buy now pay later offerings have helped fund those purchases. Klarna is now repositioning itself from a BNPL player to a digital bank, by launching a debit card, as investors worried about the BNPL business model. But there's few standalone debit cards, and the sturdy old debit card offering looks a lot better when wrapped up with instant payments and a function-packed app. While Germany is one of Klarna's core markets, a new German offering from BBVA shows where the competition is. BBVA is set to compete with Klarna by offering a new digital only bank in Germany, where its core offering will be a fee-free current account supplemented by instalment pay offers on debit card purchases and a three percent interest rate on savings. "Germany marks the second all-digital market entry for BBVA, following its 2021launch in Italy, where it now has more than 700,000 customers," says Finextra. BBVA's brand is built in part around its reputation for a good digital banking experience, but it's notable too the extent to which its offerings follow in the footsteps of Revolut.