Buy now, pay later "hottest trend" in lending, says TransUnion exec, who underscores importance of trust

Buy now, pay later is “the hottest” trend in lending, according to Shail Deep,TransUnion’s chief product officer, who today ( Wednesday) underscored the importance of trust between consumers and financial services providers.

Deep gave the opening keynote speech at the AltFi Festival of Finance, examining the importance of trust in driving post-pandemic growth and also looking at changing consumer habits.

Deep pointed to research highlighting the popularity of the likes of Klarna and AfterPay showing that more than one-third of people in the UK were engaging with buy now, pay later

She said data showed that there was “a clear preference that consumers have towards buy now, pay later when it comes to making payments”.

Deep said the credit bureau had worked “extensively” with buy now, pay later providers, regulators and consumers to understand the consumer preference for buy now, pay later.

Most consumers said the main advantage of buy now, pay later was allowing them to spread payments over time; followed by interest-free payments; followed by ease of use which buy now, pay later afforded them.

In February this year, TransUnion announced it was incorporating buy now, pay later to its UK consumer credit files, a move that it claims is a UK-first.

Starting from the summer of this year, TransUnion will begin displaying the data on consumer data reports, and introducing it across its range of products.

Deep also touched on the increased presence of open banking in the banking landscape, saying that there had been “increased adoption” in recent years.

Deep highlighted the importance of trust when it came to consumers embracing open banking.

She said: “We need to establish trust with the consumers for them to be comfortable about linking their financial accounts.

"And once that trust is established the next critical factor is providing the compelling value proposition to them so that they can give you that trade-off decision of providing the consent."