Last Week in Lending: Tuesday, 4 June 2024

There’s been impressive innovation in the credit space recently with Plaid’s launch of its new Consumer Report product coming in at the top of my favorite reads this week!

1. Plaid launches Consumer Report product through Plaid Check (CRA)

I couldn’t be more excited to see this new product from Plaid come to life! With Consumer Report, lenders can now embed cash flow data and credit risk insights directly into their underwriting and verification workflows with a single API. This includes gaining access to default risk predictions that can estimate the likelihood of repayment.

This product significantly democratizes access to instant, real-time open banking insights. And ultimately, it will help lenders boost the accuracy and speed of their underwriting decisions by removing the burden of complex raw data analysis.?

I’m already super excited to see how customers on Taktile will leverage this new product to take their underwriting decisions to the next level ??

Check out the full announcement below??

2. Visa opens the door for new contenders to join the race to win the digital wallet

With the introduction of Visa Flexible Credentials, card issuers might get a real shot at entering the race to win consumer’s digital wallets.?

Visa introduced the idea of a single card as an interface that consumers can use for tap-style payments, creating an agreement to pay a merchant and payment rail selector. Under the hood, those can be credit cards, pay by bank, or BNPL options—all with their own pros and cons for any given transaction. This also introduces the potential to recommend ideal options as a new value-add at the wallet level.

Check out the full announcement??

3. Wallets evolve to become dynamic “reward advisors”

Continuing on the theme above, we are also seeing players create new solutions for wallet recommendations. Google has just shared that the Google Pay checkout will begin to show reward benefits to allow users to pick the optimal card for any given transaction. And Kudos, a free AI-powered wallet, has taken this idea another step further as it automatically calculates credit card rewards and benefits . I’m very curious to follow this space and see how reward optimization and card recommendations will become part of the digital wallet functionality.

4. CFPB says BNPL deserves consumer protection similar to credit cards

For those who haven’t seen the news yet, the CFPB has recently announced that they now consider buy-now–pay-later purchases in the United States to require a similar degree of consumer protection as credit card products. With the aim of providing consumers with more transparency around how to dispute charges and obtain refunds, the CFPB has issued an interpretive rule that applies the Truth in Lending Act to BNPL purchases in line with credit cards.?

Check out the full story ??

5. Revolut’s approach to address consumer scamming made my day

Revolut took an interesting and creative approach to protect consumers from themselves: They recently started asking them to take identifiable photos with handwritten papers stating that they are likely falling for a scam by completing the money transfer they are about to complete.

See an example here??