Following this announcement, the collaboration will leverage Equifax’s Open Banking solutions in order to provide Tymit with the possibility to improve the accuracy of affordability decisions with the use of real-time insights and more granular transaction data.
In addition, the strategic deal is expected to offer direct benefits to Tymit clients, as well as optimise the manner in which customers with a `thin` credit history demonstrate their financial resilience. Users will also be enabled to unlock access to finance while improving the overall security of vulnerable customers from unaffordable debts.
Tymit is set to continue to provide customers with Buy Now, Pay Later (BNPL) functionalities, as well as to report borrowing data to all three major credit reference agencies in the region of the United Kingdom. This action will be supported by the partnership with Equifax, in order to improve the way customers are protected from problem debt, as well as to optimise the overall financial inclusion.
According to Equiax’s BNPL Barometer solution, 48% of UK adults are currently using BNPL, while the average monthly payments have reportedly surged by almost half (representing 46%) in the last two years. Despite the overall rise of Buy Now, Pay Later solutions, regulatory uncertainty still persists with the government of the United Kingdom, as the 2021 announcement of implementing and impending BNPL regulation is yet to be translated into concrete action.
As the need and demands for stricter regulations grow, Equifax and Tymit’s partnership is expected to deliver an optimise and proactive approach to the manner in which businesses address industry concerns, as well as promote responsibly and secure BNPL practices. The strategic deal represents a step towards improved credit decision transparency, aligning with the UK’s new Consumer Duty framework. This new law came into force in 2023 and it required financial services providers to actively promote good outcomes for clients and users.
By leveraging Open Banking, the companies will focus on providing new benefits for both customers and lenders, allowing them to access a more accurate assessment of users’ ability to meet credit payments, optimising and increasing financial inclusion, as well as preventing the overall problem debt.
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