Klarna brings gambling block to open banking payments
Klarna is enabling banks to extend voluntary gambling blocks to open banking-driven payments through its subsidiary, Sofort, using public code developed by Monzo and TrueLayer.
Monzo, was the first bank to introduce a gambling block in 2018, following demand from customers who wanted help controlling their use of gambling sites. Since then most UK banks have followed Monzo’s lead.
However, while gambling blocks are effective for payments made by card, open banking powered payments are often not covered.
Klarna first entered the open banking space when it acquired Sofort, a direct bank-to-bank payment service in Germany, in 2014. Sofort provides immediate, bank-to-bank payments services to a range of merchants, including online gambling sites.
Now it has become the first provider to integrate the UK’s first open banking powered gambling block, developed by Monzo and Truelayer last year, who made the update code public. This will allow Monzo to extend their gambling block to all Klarna-powered, immediate bank-to-bank payments. Currently 400,000 Monzo customers have activated the gambling block.
With the update, all banks connected to Sofort will also be able to identify a payment request from a gambling or gaming company and, if there is a gambling block in place, block that payment.
Alex Marsh, head of Klarna UK comments, “We’re calling on banks and other open banking infrastructure providers to make this relatively small update which could help protect hundreds of thousands of UK consumers. Open banking has huge potential to increase competition and reduce costs and as adoption grows the industry must move quickly to make changes which can further improve the lives of UK consumers."