- Buy Now Pay Later (BNPL) provider Zilch selects challenger credit reference agency Credit Kudos to use their Open Banking affordability platform and promote responsible lending to more customers
- BNPL is already used by over 6m UK consumers*, especially younger adults, with consumer habits as well as income patterns changing due to COVID-19
- Lenders can ensure they are lending responsibly at scale through rich affordability insights – Open Banking has helped Zilch take the lead in the sector, applying rigorous affordability and creditworthiness checks whilst maintaining a fast, simple on-boarding process
15 October 2020 – Buy Now Pay Later (BNPL) provider Zilch has partnered with challenger credit reference agency and Open Banking provider Credit Kudos to better assess affordability of its customers.
BNPL, an alternative credit form which allows consumers to spread the cost of a purchase over a certain number of installments, has become an increasingly popular way to use credit – especially among younger people – with the UK sector growing by 39% a year.* BNPL is expected to gain even more traction with many looking for finance products that offer them greater flexibility, especially given greater uncertainty in their income due to the pandemic.
The COVID-19 outbreak has brought affordability into sharp focus and BNPL providers are under increased pressure to protect potential borrowers – in particular young adults – and ensure responsible lending practices by carrying out proper affordability checks – whilst providing a seamless and fast customer experience.
Traditional bureau data does not provide lenders with enough information to assess affordability and creditworthiness. Using consumer-consented Open Banking data, lenders can now access a consumer’s up-to-date financial information, without having to perform invasive hard credit checks – ensuring thorough affordability checks whilst avoiding unnecessary delays for customers.
Zilch offers the first BNPL Mastercard that enables its customers to shop at any online retailer, spreading their payments over a number of instalments. As millions of individuals continue to struggle financially as a result of the pandemic, the company focuses strongly on affordability to ensure that their customers can afford to repay their deferred purchases. It does so by using Credit Kudos’ Open Banking powered real-time insights, providing a breakdown of a customer’s expenditure, a comprehensive view of their financial situation as well as predicted and historical spending analysis.
Philip Belamant, Founder and CEO of Zilch, comments: “Traditional credit checks feel a bit like driving a car whilst looking in the rearview mirror; however, thanks to Open Banking we are able to provide greater cash convenience, using rich affordability insights to ensure we are protecting vulnerable customers. Credit Kudos’ Open Banking empowered technology has been instrumental in helping us lead the charge in the sector as one of the first major BNPL players doing so, ensuring proper affordability checks and responsible lending to our customer base.”
Freddy Kelly, Co-founder and CEO at Credit Kudos, adds: “Individuals can now help lenders better understand their circumstances by securely sharing their financial information with their selected provider. Now more than ever, real-time Open Banking insights are crucial in helping lenders lend responsibly, providing fairer credit for all. Our partnership with Zilch will be an important step in ensuring the BNPL sector has the tools it needs to continue to provide flexible financial products to customers, whilst maintaining responsible lending practices.”
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About Credit Kudos:
Credit Kudos is an FCA-authorised challenger Credit Reference Agency and Open Banking Account Information Service Provider (AISP) that uses financial behaviour to measure creditworthiness. Through direct connections to the UK’s largest banks, Credit Kudos aggregates and interprets transaction data for use by lenders, brokers, and financial institutions. Credit Kudos goes beyond traditional scoring, providing a comprehensive view of a borrower’s creditworthiness. We transform complex sets of information in our easy-to-use, digital first tools to help everyone make better lending decisions. Since co-founding Credit Kudos, Freddy and Matt have been the driving force behind its core accomplishments; achieving full FCA authorisation as the first of its kind Credit Reference Agency, and most recently winning ‘FinTech Innovator of the Year’ by Techworld – Techies 2019, and Best Machine Learning in Credit and Collections Solution – Credit & Collection Awards 2019. Credit Kudos co-founder, Freddy, was also named in London’s Most Influential People 2019: Fintech and Banking.
Zilch is redefining the Buy Now, Pay Later (BNPL) market by enabling customers to pay overtime anywhere, instantly. While traditional BNPL products rely on various third parties, Zilch’s unique patent-pending model doesn’t require integrations and provides instant accessibility. While most credit cards have costly interest rates and late fees, Zilch is completely interest-free. The system works by using open banking and AI to calculate each customer’s affordability, and Zilch only funds low-value discretionary purchases to protect shoppers against over-borrowing.
Learn more about Zilch’s ground-breaking payment solution atwww.payzilch.com.