Open banking platform Yapily and payments technology company Zilch have agreed a groundbreaking partnership that will provide millions of people with better access to 0% interest swift repayment credit.
The partnership marks the first time Yapily has teamed up with a provider of consumer credit via Buy Now Pay Later (BNPL) and will see Zilch leverage Yapily’s innovative open banking platform and expertise to deliver an even more accelerated and superior credit decisioning process, responsibly, at a time when it is most needed in the lending industry.
Recent research from Yapily, which surveyed 2,000 full time professionals in the UK, found 59% of people have used credit cards to supplement their income over the past 12 months. Meanwhile, 34% have used overdrafts, 21% have turned towards personal loans, and 9% have taken out payday loans.
The interest rates, fees, and charges associated with high-cost or short-term credit options are leaving vulnerable individuals in negative debt cycles. The study also revealed that those earning £15,000 or less were the highest users of personal loans over the past 12 months - with 26% of respondents in that salary bracket having used them. With the cost of living a significant concern for 95% of those polled, there is a growing need for affordable and accessible credit solutions. Data from Zilch’s own research shows that interest on credit cards alone is costing the British public an estimated £15 billion a year. Broken down that works out to be £41 million a day.
Furthermore, figures released by The Money Charity recently reveal that credit card balances have increased by half a billion pounds per month over the last 12 months in the UK, rising from £55 billion in January 2022 to almost £64 billion in January 2023.
By partnering together, Yapily will enable Zilch to access an individual’s risk and affordability profile more accurately than is currently exercised by traditional assessments. This makes it easier to provide Zilch’s 3 million customers with credit options that are tailored to their specific financial situation. This approach will empower individuals to manage their finances better.
Philip Belamant, CEO and Co-Founder of Zilch, commented: “I believe we are probably at the early stage of seeing the greatest consumer shift in payments in a quarter century - since PayPal was founded. In the context of the cost of living crisis, it’s never been more critical for people to have access to 0% interest responsible credit when managing cashflow. That’s what this new partnership with Yapily embraces - helping Zilch to achieve by maximising the consumer benefits of open banking technology. The traditional consumer credit scoring systems have prevented smarter decisioning with ultimately credit-worthy borrowers. Blocking consumers from timely accessing both prime and affordable finance. Creating a trap for the most vulnerable in society. With Yapily and open banking, we are able to advance how we provide our millions of British customers all the trust, protections, and benefits they ordinarily expect from traditional high street banks, but avoid all the costs.”
Stefano Vaccino, CEO and Founder of Yapily, added: “Over five million people in the UK have little to no credit history, greatly reducing their access to mainstream financial services. In times like these, it's important that everyone has access to the credit they need, when they need it most. But critically, this must be based on what they can actually afford at risk of falling on even harder times. It’s great to see more lenders like Zilch turn to open banking to meet the needs of individual borrowers. I look forward to watching our partnership grow and enabling Zilch to deliver fairer credit to millions of people now and in the future.”
The announcement follows the news that providers of credit via BNPL will now be regulated by the Financial Conduct Authority (FCA). This move is welcomed by Zilch, which has been regulated by the FCA since April 2020, before the organisation launched in September later the same year.
In January of this year, the company announced it would be sharing information with all prime UK Credit Referencing Agencies (CRAs) in a deal that will see customers be able to build and influence their credit scores.
Zilch also recently announced a collaboration with leading UK debt charity StepChange to become the first provider of credit via BNPL to fully integrate StepChange Direct into its platform. The partnership will see Zilch provide innovation that will better advance the user experience and help customers at what is usually a vulnerable time by creating a smoother and quicker process when being referred for support.