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<p>Klarpay AG,
a deposit-taking financial institution authorized by the Swiss Financial Market
Supervisory Authority (<a href="https://www.financemagnates.com/tag/finma/" target="_blank" rel="follow">FINMA</a>), announced on Tuesday that it achieved
profitability in the first year of its market operations. </p><p>Klarpay Ends 2023 in Profit</p><p>Although
the company did not provide hard numbers, it revealed that the first profitable
period was reached six months after the commencement of market activities. The
Swiss <a href="https://www.financemagnates.com/tag/fintech/" target="_blank" rel="follow">fintech </a>company was able to sustain the profitability metrics until the
end of 2022 and close it with a "substantial annual profit."</p><p>"We
are thrilled to have reached this important milestone. Our focus on a
sustainable business model sets us apart from many of our peers in the <a href="https://www.financemagnates.com/terms/f/fintech/" class="terms__main-term" id="891edcf3-475e-45f3-a8b8-3ba2e7d37339" target="_blank">fintech</a>
industry who struggle to achieve profitability, especially so early in a
company's lifecycle. We are excited to continue building on this success in the
coming year," Martynas Bieliauskas, the CEO and Co-Founder of Klarpay,
commented.</p><p>Klarpay is
set to focus on its organic operating model and product efficiency in 2023. The
company's proprietary software fills a market gap and is committed to
delivering innovative solutions that meet evolving customer and partner needs,
as demonstrated by its recent expansion of international payment offerings with
13 new foreign currency accounts. </p><p>Hard Times for Fintech Companies</p><p>Klarpay's
profitability achieved in its first year of operation is an interesting topic
as it comes at a time when the fintech industry cannot count on investor favor
and easy macroeconomic conditions. </p><p><a href="https://www.financemagnates.com/fintech/fintech-funding-slashed-by-almost-half-in-2022-will-2023-be-any-better/" target="_blank" rel="follow">According
to CB Insights' 2022 State of Fintech Report</a>, funding for fintech companies
shrank by almost 50% in 2022, to $75.2 billion. During the last quarter, the
industry generated its lowest performance since 2018, raising less than $11
billion in external funding. In contrast, the total number of deals concluded
did not fall significantly, contracting by only 8% to 5,048.</p><p>Funding in
the payments sector, where Klarna operates, was cut by 49% to $20.8 billion, which is down from the $40.5 billion reported a year earlier. To add, the banking
industry was hit the hardest, with funding falling to $9.4 billion, which is also down 63%.</p><p>Watch the recent FMLS22 panel on cultivating female leadership in fintech.</p><p>Swiss Fintech Klarpay
Becomes Visa Network Member</p><p>In July
2022, the deposit-taking company <a href="https://www.financemagnates.com/fintech/swiss-fintech-klarpay-gains-visa-principal-membership/" target="_blank" rel="follow">announced it became a Principal Member of the
Visa Network</a>. Firms that become Principal Members are able to issue cards,
disburse cash, acquire merchants and hold settlement risks, among other
capabilities.</p><p>"Direct
membership in the Visa network offers Klarpay's merchant clients a fast,
simple, and integrated way to manage their funds and conduct their day-to-day
cross-border transactions," Klarpay explained in the statement.</p><p>Klarpay
announced that its Level 1 Payment Card Industry Data Security Standard (PCI
DSS) Certification will be bolstered by the addition of Visa Principal
Membership. To maintain a secure environment for credit card information, the PCI
DSS prescribes a series of <a href="https://www.financemagnates.com/terms/c/compliance/" class="terms__secondary-term" id="569f58ee-534c-44f0-a7cd-f55b0f9a2b2a" target="_blank">compliance</a> standards for all companies involved in
processing, storing, or transmitting such data.</p>

This article was written by Damian Chmiel at www.financemagnates.com.