Buy Now Pay Later (BNPL) provider Zilch has partnered with challenger credit reference agency and Open Banking provider Credit Kudos to better assess the affordability of its customers.

Zilch says that the COVID-19 outbreak has brought affordability into sharp focus and BNPL providers are under increased pressure to protect potential borrowers – in particular young adults – and ensure responsible lending practices by carrying out proper affordability checks – whilst providing a seamless and fast customer experience.

Traditional bureau data does not provide lenders with enough information to assess affordability and creditworthiness. Using consumer-consented Open Banking data, lenders can now access a consumer’s up-to-date financial information, without having to perform invasive hard credit checks – ensuring thorough affordability checks whilst avoiding unnecessary delays for customers.

Philip Belamant, Founder and CEO of Zilch, said “Traditional credit checks feel a bit like driving a car whilst looking in the rearview mirror; however, thanks to Open Banking we are able to provide greater cash convenience, using rich affordability insights to ensure we are protecting vulnerable customers. Credit Kudos’ Open Banking empowered technology has been instrumental in helping us lead the charge in the sector as one of the first major BNPL players doing so, ensuring proper affordability checks and responsible lending to our customer base.”

Freddy Kelly, Co-founder and CEO at Credit Kudos, said “Individuals can now help lenders better understand their circumstances by securely sharing their financial information with their selected provider. Now more than ever, real-time Open Banking insights are crucial in helping lenders lend responsibly, providing fairer credit for all. Our partnership with Zilch will be an important step in ensuring the BNPL sector has the tools it needs to continue to provide flexible financial products to customers, whilst maintaining responsible lending practices.”