At Klarna, Revolut, Careful What You Wish For: Paul J. Davies

Life is going well again for fintechs, judging by the flow of headlines about two of Europe’s leading finance apps. After the startup crash of 2022-2023, both Klarna Bank AB and Revolut Ltd. seem back on pathways toward potential listings at eyepopping valuations.

What sets such young companies apart from incumbent banks in the minds of investors is their fast growth and lack of old-fashioned, burdensome technology or bureaucracy — and the promise of bigger future profit margins. I’m more skeptical about those ideas, especially in the longer term.

But first the good news. Klarna, an original darling of the Buy Now Pay Later phenomenon, is expanding ...