Digital bank Zopa enters BNPL space with suite of regulated products

Digital bank Zopa has entered the BNPL space with a suite of fully regulated products that prioritise transparency and customer protection. Setting its sights on the UK’s £6 billion BNPL market, Zopa brings a simple and fair option for larger purchases (£250 - £30,000) that may take a customer months or years to save up for. The new offering combines the technology and innovation that enables instant decisions and fast consumer journeys of a fintech, alongside the consumer protection, credit checks and safeguards of a regulated bank[WC1] [LG2] [LG3] . Zopa bank will:

• Only offer affordable credit by running credit checks and affordability tests for all customers
• Share data with credit rating agencies (CRAs) to give other lenders a full picture of people’s debt positions
• Help customers to better consolidate, structure and pay down their debt using its proprietary tools
• Enable users to build their credit profiles and improve their financial positions

First announced at Money2020 Europe, Zopa bank will roll-out its BNPL offering using a staggered approach that carefully and closely aligns with the Treasury’s ongoing consultation in the UK. Zopa’s first product will offer BNPL retail finance for merchants; it will be deployed through B2BC partnerships (www.zopa.com/BNPL[LG4] ). In a second phase, once new regulation comes into place, Zopa will broaden its BNPL toolkit with a consumer offering.[EM5] Tim Waterman, Chief Commercial Officer at Zopa said: “Against a backdrop of global financial uncertainty Zopa is entering the buy-now-pay-later space to make instant, yet responsible lending decisions with products that are sustainable and fit for purpose. Zopa is ushering in the era of BNPL 2.0, an evolution of BNPL that is regulated. We combine the seamless customer journeys and best-in-class digital UX offered by traditional BNPL players alongside the ability to underwrite longer, larger loans in a way that fully meets regulatory requirements.” To date Zopa raised $500 million from the early investors of Slack, Uber, and Alibaba to build the UK’s best bank for saving and borrowing. Zopa hit profitability in March, just 21 months after acquiring its banking licence. Last year it appointed Monzo’s Graham Robinson as its Chief Risk Officer and Helen Beurier as its first Chief People Officer (ex M&S, PepsiCo). Since getting its banking license Zopa has attracted £1.2 billion in deposits, more than £1.5 billion of loans on balance sheet, issued 300,000 credit cards becoming a top 5 credit card issuer in the UK, and tripled (3x) revenue per customer. In May Zopa matched the best and boldest benefits of the UK’s largest employers and enabled employees to work from abroad for up to 120 days a year.