London-based buy now, pay later (BNPL) fintech startup Zilch has received consumer lending license from the UK Financial Conduct Authority (FCA).
It is one of the first BNPL service provider in the UK to secure a consumer credit authorisation.
Zilch is also the only firm in the industry to use open banking data, in partnership with challenger credit reference agency Credit Kudos.
It also uses soft credit checks to assess each customer’s creditworthiness.
Joining FCA’s Regulatory Sandbox Programme, Zilch will work with the regulator on its consumer focused BNPL services.
Its over-the-top solution enables customers to pay over-time and interest-free wherever Mastercard is accepted.
In addition to instalment payments, Zilch also offers discounts and deals to customers.
Zilch founder and CEO Philip Belamant said: “Having secured our consumer credit authorisation with the FCA is another step towards improving consumer financial wellness and removing credit related anxiety for our customers.
“The Sandbox programme allowed us to seek advice from the FCA, get their oversight and guidance on our initial testing and ultimately ensure we were building a model that is not only profitable for our business but, importantly, one that works for our customers too.
“We welcome and fully support this approach and believe lenders should always do their best to ensure they are at no point becoming a burden on the customer.”
Earlier this month, the FCA made few changes to the open banking identification requirements in view of Brexit.