Credit reporting information will be used to perform affordability checks on customers and promote responsible lending.
As a BNPL lender, Zilch already uses CRA data, open banking data, and proprietary behavioural data to make its consumer lending decisions. This partnership will add reciprocal reporting of payment plans to the fintech’s decision-making process.
“This partnership is one of many technology alignments that we are leveraging as we scale in order to create the most comprehensive view of a customer's affordability all while ensuring performance is fed back to partners allowing others in the space to take responsible decisions too,” said Philip Belamant, co-founder and CEO of Zilch.
This news comes amid growing pressure on the BNPL industry to increase affordability checks and prioritise customers’ financial health ahead of impending FCA regulation over the sector. Rising concerns around spiralling consumer behaviours have shone a spotlight on BNPL companies and their focus on responsible lending.
“Zilch was built with financial health at its core, which is why we were one of the first BNPL [firms] to work with the FCA to secure a consumer credit licence,” Belamant continued. “Today, by partnering with Experian, we are continuing to transform the way affordability is assessed which is the key to us delivering financial inclusion to all.”
“By using Experian’s affordability technology, Zilch [can] access a much richer and deeper level of insight into someone’s financial situation enabling them to provide a better and more informed lending decision,” added Paul Speirs, managing director of digital consumer information at Experian. “This is absolutely vital given the backdrop of rising inflation and the strain of rising living costs.”
Founded in July 2018, Zilch shot to unicorn status within just a few years. The company differentiated itself from the many players crowding the BNPL sector by its ‘over-the-top’ platform which removes the need to rely on merchant partnerships, meaning customers can use its services in any online UK store.