Yapily and Zilch partner for affordable access to credit solutions

This is the first time Yapily has collaborated with a supplier of consumer credit via Buy Now, Pay Later (BNPL). Zilch will use Yapily's Open Banking platform and expertise to responsibly offer a better credit decisioning process.

By collaborating, Yapily will enable Zilch to access an individual's risk and affordability profile more accurately than standard assessments presently do. This makes it easy to give financing choices customised to Zilch's three million consumers' particular financial conditions. This technique will assist individuals in better managing their funds.

The statement follows the confirmation that BNPL credit providers are now going to be regulated by the Financial Conduct Authority (FCA). This action is welcomed by Zilch, which has been regulated by the FCA since April 2020, before the organisation debuted later that year in September.

In January 2023, the firm stated that it will share information with all major UK credit reference agencies (CRAs), allowing clients to develop and influence their credit ratings.

The need for affordable credit solutions

According to a recent Yapily poll of 2,000 full-time professionals in the UK, 59% of people used credit cards to augment their income in the previous 12 months. In the meanwhile, 34% have used overdrafts, 21% have utilised personal loans, and 9% have used payday loans.

The interest rates, fees, and charges connected with high-cost or short-term credit alternatives trap vulnerable people in a cycle of debt. According to the report, people earning GBP 15,000 or less were the most frequent users of personal loans in the previous 12 months, with 26% of respondents in that pay category having used them. With 95% of those questioned citing the cost of living as a major worry, there is a rising demand for inexpensive and accessible credit alternatives. According to Zilch's analysis, interest in credit cards alone costs the British people an estimated GBP 15 billion every year. It comes up to GBP 41 million per day when broken down.

The BNPL model

The old BNPL model has proven the enormous customer appetite for novel payment methods, particularly zero-cost credit. Yet, the direct-to-consumer method pioneered by younger entrants into the payments market has the greatest potential to produce value for investors and merchants while also changing the lives of millions of customers searching for the most rewarding ways to pay. The supplier controls the connection with the consumer in the 'DTC' model, also known as BNPL 2.0. It is one that is developed prior to any particular purchase choice.

Recently, Zilch established a partnership with the UK debt charity StepChange to become the first supplier of loans via BNPL to completely incorporate StepChange Direct into its platform. The collaboration will see Zilch bring innovation that will improve the user experience and assist consumers during what is typically a vulnerable moment by enabling a smoother and faster procedure when being referred for support.