Klarna partners with Sparkassen to launch Variable Recurring Payments in Germany, a faster, safer open banking alternative to traditional direct debits.
Klarna, the Swedish financial technology company, has reached an agreement with Sparkassen, Germany’s largest banking group, to launch a new system for recurring payments. The initiative, known as Variable Recurring Payments (VRPs), is being heralded as the latest evolution of open banking technology and represents a direct competitive threat to traditional direct debit systems.
The partnership will allow Klarna customers who hold an external Sparkassen bank account to authorize Klarna to withdraw recurring funds without requiring a pre-specified, fixed value for each payment. This flexibility means payments for varying amounts—common with utility bills, subscriptions, and other regular services—can be settled without the customer needing to sign off on every individual transaction.
Advocates of the VRP technology emphasize its advantages over the decades-old direct debit model. VRPs offer greater customization, quicker settlement, and enhanced security, with transactions appearing instantly in accounts. The system is viewed as a key tool for Klarna as the company seeks to expand its market share against card processing giants like Visa and Mastercard.
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Nicole Defren, Klarna’s head of northern and central Europe, positioned the move as a significant modernization effort. “VRP sets a new benchmark for digital payments for millions of consumers,” Ms. Defren said. “With Variable Recurring Payments, Klarna offers a modern, account-based alternative to traditional direct debits—secure, fast, convenient, and fully transparent.”
The deal marks a significant step toward establishing VRPs as a widely accepted consumer payment method in a large European market, with the aim of integrating the service into a future-ready payments network in collaboration with the Sparkassen Finanzgruppe.
