Open Banking platform Yapily has teamed up with credit card startup Yonder to provide credit to consumers without the need for a credit score, using Open Banking.
With customer consent, Yapily Data will enable Yonder to fetch individual bank account information and analyse income and expenses information, with the aim of building up a “more holistic” credit profile.
Through the partnership, Yonder and Yapily want to create access to finance for millions of “credit invisibles”, citing immigrants who struggle to rent a property and younger generations who have yet to establish a credit record as examples.
In addition, Yonder customers will not be charged currency exchange fees when spending abroad and will be able to build their credit score by making monthly payments on time.
Yonder customers will also be able to use an instant and more secure account-to-account Open Banking payment method when paying off their credit balance, powered by Yapily Payments.
Tim Chong, co-founder CEO of Yonder, said that unfair credit scoring methods, legacy app experiences, and vague pricing techniques “are a thing of the past”.
“With Open Banking, we’re bringing back fairness and equality to the credit industry. Yapily’s technology and Open Banking expertise are helping to make that vision a reality,” he said.
Yapily founder and CEO Stefano Vaccino, added: “This is yet another excellent example of how Open Banking is helping to serve the underbanked population, providing access to financial products to those who may not have been able to before.
“It’s great to see how innovative companies, like Yonder, are challenging traditional credit systems and joining us on our mission to create better and fairer financial services for everyone.”
According to recent research by Experian, more than 5 million people in the UK have little or no credit history, which equates to 9% of the total adult population.