The Hidden Cost of Aggregators – How Price Comparison Sites Are Destroying the Lending Industry

by John Downie, CEO & Founder at SteadyPay

They’re a tried and tested sales funnel, promising high traffic and good return. However, I’ve watched promising fintech lenders crash and burn after betting big on price comparison sites. Having built SteadyPay from the ground up, and with sustainability in mind, I’ve seen the damage these aggregators can inflict on your unit economics firsthand. If you’re a founder considering this route to market, here’s my unvarnished take on why you might want to reconsider – and what to do instead.

The economics of aggregator partnerships

Numbers matter, so let’s use those to highlight the problem. Say you’re a fintech offering a typical £1,000 loan. You’re immediately paying the aggregator around £100. Your gross profit? About £250. After you’ve covered sales costs and impairment, you’re left with low three-figure margins before even accounting for staff and other overheads. Suddenly that cost of acquisition doesn’t look so good when stacked up as a percentage-based profit margin.

The bigger problem is customer retention – or lack thereof. These customers aren’t really yours. They’ll likely go back to the comparison site for their next loan because that’s what these platforms actively encourage. This creates an endless cycle of acquisition costs that eats away at profitability. Look at iwoca – they started in 2012 but didn’t turn a profit until 2022, and they’re considered a success story. Meanwhile, I’ve watched smaller lenders like Koyo either shut down or sell off after struggling to make the aggregator model work. The harsh truth is that around 70% of lenders primarily using aggregators never build truly profitable, cash-generating businesses.

The hidden pressures on lending standards

While it might sting a bit, there’s something even more concerning than the immediate financial hit. When you rely on aggregators, you’ll feel increasing pressure to relax your lending standards. While default rates don’t necessarily change based on where customers come from (an approval is an approval), there’s constant pressure to increase approval rates to meet aggregator targets.

It can feel a bit like boiler room tactics, and you risk being deprioritised or even delisted entirely if you don’t buy into this philosophy of “just lend more”. This creates a dangerous situation where responsible lending takes a backseat to maintaining visibility. I’ve seen too many lenders start compromising on risk assessments just to keep their comparison site partnerships alive. Before you know it, you’re not just dealing with high acquisition costs, but a substantially weaker loan book too, which is full of borrowers who may never pay you back. And once you’re on this treadmill, it’s extraordinarily difficult to step off without tanking your growth numbers.

Building alternative distribution channels

As with anything in business, it makes sense to diversify. At SteadyPay, we’ve found direct distribution infinitely more sustainable. Yes, many lenders struggle with the economics of paid advertising, but we’ve discovered that targeted messaging with precise context can deliver manageable customer acquisition costs. The key difference? You own the relationship from day one.

When evaluating distribution channels, treat aggregators as just one option in your toolkit – and a potentially toxic one at that. Track everything religiously: customer acquisition costs, conversion rates, and the all-important lifetime value by acquisition source. We’ve consistently found that direct channels might cost more upfront but deliver substantially better economics over time. Why? Because when customers come directly to you, they’re more likely to return directly to you. That repeat business is where the real profit lives.

I’m not saying comparison sites can never work. They definitely can. What I am saying is that it should be one of many channels and you should be entirely aware of the cost of doing business there. Approach with caution. The most successful lending businesses – e.g. the ones that are surviving and profitable – diversify distribution and prioritise direct customer relationships. Don’t sacrifice tomorrow’s profits for today’s growth numbers. Build something that can actually last.