Nordic Fintech Trends: Tap to Pay, Pay by Bank & VC Investments

The global financial technology landscape is in a constant state of evolution, driven by innovation and strategic investments. This week, the spotlight shines brightly on Sweden, a nation consistently at the forefront of fintech advancements. From pioneering new payment methods to facilitating seamless investment experiences and attracting significant venture capital, Swedish fintechs are setting new benchmarks and influencing the industry worldwide. This analysis delves into the latest developments from key players like Klarna and Tink, alongside insights into the robust investment climate fostering this dynamic growth.

Klarna's Vision: Seamless Payments for a Connected World

Swedish digital banking and payment powerhouse, Klarna, has significantly advanced its mission to simplify shopping with the introduction of "Tap to Pay" across 14 key European markets. This innovative feature seamlessly integrates flexible payment options into the traditional brick-and-mortar retail environment, effectively transforming the Klarna application into a comprehensive contactless wallet ready for daily transactions. This move is particularly impactful given that physical stores still account for approximately 80% of all shopping activity in Europe, bridging the convenience of online commerce with the tangibility of in-person retail.

David Fock, Klarna's Chief Product & Design Officer, articulated the strategic importance of this expansion, stating that "Tap to Pay brings us closer to our vision of Klarna being everywhere for everything." This initiative offers consumers unparalleled flexibility at checkout, allowing them to establish payment plans and execute payments within seconds directly from the Klarna app. The service is now accessible to Klarna users in Germany, Italy, Spain, France, the Netherlands, Finland, Belgium, Austria, Ireland, Portugal, Norway, Poland, Denmark, and Sweden.

Beyond this retail-focused expansion, Klarna is also making ambitious strides into the digital asset space. Following the November introduction of its stablecoin, KlarnaUSD, the company is poised to become the first bank to launch a stablecoin on Tempo, an independent blockchain platform specifically designed for payments. Currently undergoing testing on Tempo's testnet, KlarnaUSD is slated for a mainnet launch in 2026. Sebastian Siemiatkowski, Klarna Co-Founder and CEO, underscored the transformative potential of this venture, highlighting Klarna's substantial customer base and annual transaction volume as key factors in its ability to revolutionize global payments. This strategic foray into cryptocurrency, in collaboration with industry giants like Stripe and Paradigm, positions Klarna to challenge established payment networks, promising faster and more cost-effective transactions for a global user base. Klarna, a long-standing Finovate alum since 2012, continues to innovate from its headquarters in Stockholm, Sweden.

Tink's Open Banking: Empowering Financial Accessibility

In another significant development within the Swedish fintech ecosystem, Tink, a leading open banking platform, has forged a strategic partnership with Fidelity International. As previously reported, this collaboration will enable Fidelity to integrate "Pay by Bank" top-up functionalities, significantly streamlining the process for investors to fund various accounts, including ISAs, SIPPs, cash management, and general investment accounts. This enhancement underscores the growing adoption of open banking solutions to simplify complex financial operations.

Tink, recognized as a two-time Finovate Best of Show winner and acquired by Visa in 2021, plays a pivotal role in enabling financial institutions, fintechs, and merchants to harness the power of aggregated financial data. Through its single API, Tink empowers clients to create personalized financial management tools, develop intelligent financial services encompassing risk insights and account verification, and build robust personal finance management applications. This robust infrastructure supports over 3,000 connections to major European banks, processing more than 10 billion transactions annually and serving a developer community of 10,000.

"Pay by Bank" stands out as one of the fastest-growing applications of open banking technology. Projections indicate a substantial surge in global open banking users, expected to reach over 645 million by 2029, a 3.5-fold increase from 183 million users in 2025. This anticipated growth highlights the increasing demand for secure, efficient, and low-friction payment alternatives. Ian Morrin, Tink's Head of Payments, expressed enthusiasm for leading institutions like Fidelity embracing open banking to enhance payment experiences, making investment account funding more seamless and user-friendly. Daniel Kjellén, Co-Founder and CEO, leads Tink from its base in Stockholm, Sweden, since its inception in 2012.

Incore Invest: Fueling European Fintech Growth

The vibrant investment climate in Sweden continues to bolster the fintech and SaaS sectors. Incore Invest, a Stockholm-based investment firm, recently completed a successful second closing for its Incore Invest II fund, raising an additional €15 million. This latest capital injection brings the fund's total to €40 million, dedicated to fostering the growth of promising SaaS and fintech companies across Europe.

Nicolai Chamizo, Founder and CEO of Incore Invest, reiterated the firm's strategic focus on backing proven technology companies with substantial growth potential. The continued confidence from investors in Incore Invest is a testament to its successful investment thesis, ensuring the fund is well-equipped to support the next generation of category-defining technology innovators. This fundraising achievement is particularly noteworthy amidst a broader trend where several European venture capital firms, especially those targeting growth-stage and early-stage technology companies, are actively securing or closing new funds. Recent examples include over €300 million collectively raised by four funds alone: Backed VC, Notion Capital, Armilar Venture Partners, and henQ.

Incore Invest's portfolio boasts an impressive array of innovative fintechs. These include Brite, a Swedish payments platform leveraging open banking for instant payment processing; Mynt, another Swedish fintech simplifying expense management through smart company cards; and Froda, a Swedish fintech specializing in embedded finance solutions. These investments exemplify Incore Invest's commitment to nurturing cutting-edge financial technology that reshapes industry standards.

Global Fintech Spotlight: Innovations Beyond Nordic Borders

While Sweden shines bright, fintech innovation is a truly global phenomenon, with significant advancements being made across various continents:

Sub-Saharan Africa

• Kenyan fintech Jahazii secured $400,000 in pre-seed funding to provide earned wage access and payroll infrastructure for Africa's informal economy.
• Wise received conditional regulatory approval to commence operations in South Africa.
• Nigeria's FairMoney Microfinance Bank expanded its services beyond digital lending to become a full-service bank, enhancing financial inclusion.

Central and Eastern Europe

• YouLend, an embedded finance infrastructure company, partnered with Qonto to expand its embedded finance offerings into the German market.
• Salt Edge collaborated with Romanian financial management platform Finlayer to introduce open banking solutions for small businesses.
• Former Polish President Andrzej Duda joined the board of fintech firm ZEN.COM, as the company targets expansion into Asia.

Middle East and Northern Africa

• UAE-based fintech platform Huru, in partnership with Mawarid Finance, launched "Quick Cash," a microfinance solution for the region's underbanked population.
• Egypt's Money Fellows surpassed $1.5 billion in transactions, marking significant growth.
• Israeli fintech Melio, led by CEO Matan Bar, was profiled by Haaretz, highlighting the success of the Israeli fintech sector.

Central and Southern Asia

• Financial Times interviewed Amrish Rau, CEO of Pine Labs, on the rapid rise of Indian fintech.
• The Express Tribune provided an overview of the flourishing fintech innovation landscape in Pakistan.
• India's Paytm launched "Paytm Checkin," a new AI-powered travel application, expanding its services.

Latin America and the Caribbean

• Episode Six formed a strategic partnership with Mexico's Xepelin to accelerate the development of digital financial products in the country.
• São Paulo-based fintech Cumbuca launched, facilitating fast-track payment initiation and access to Brazil's burgeoning financial services market for international companies.
• Colombian fintech Movii entered the Peruvian market, operating as a neo-acquirer and marking the beginning of its regional expansion.

Asia-Pacific

• Vietnamese neobank Circle Asia Technologies launched its AI-powered "PayLater" card, in collaboration with Pismo and Visa.
• South Korea's NH NongHyup Bank successfully piloted a blockchain-based cross-border payments project.
• Thunes secured In-Principle Approval (IPA) for a variation on its Major Payment Institution license (MPI) from the Monetary Authority of Singapore.