What prompted the idea for Qlarifi?

Alex: We saw an opportunity to enable lenders to make better informed underwriting decisions by utilising the rich and growing dataset of BNPL transactions, and to help consumers build a positive credit history through the responsible use of BNPL. The most insightful historical data for any lending decision is the previous usage of like-for-like products. When we worked for BNPLs and encountered roadblocks in seeking out this information, we decided to build a platform to aggregate it ourselves.

Loïc: Qlarifi is the data provider I wish I had in my previous role at a BNPL lender; precise and fit for purpose credit consumer data, provided by a modern data infrastructure to enable secure and real time data exchanges. Traditional credit reporting technology isn’t dynamic or in real time, and it is laborious to use, so we built a platform that makes it easy and helps BNPL providers and consumers alike.

The idea to create a BNPL-specific credit reporting platform seems obvious - why hasn’t it been created yet?

Alex: The existing reporting technologies and standards do not fit the specific features of BNPL-type products, which makes the lenders sceptical about whether reporting would really bring value to their business. 

At the core, you have a clash between innovative lending products and traditional credit reporting frameworks geared toward traditional longer term revolving credit. Now that BNPL has become so popular - and can even be used by consumers with thin credit files - questions naturally arise about how it can be used to build a consumer’s creditworthiness, and how vulnerable consumers are protected. 

So how do you see the product benefiting consumers?

Alex: There are numerous consumer benefits which we’re proud of. Firstly, enabling BNPL lenders to see a consumer's entire BNPL lending history enables more informed decisions on responsible consumers - which can mean lending to a consumer who would otherwise be excluded on traditional credit score metrics. Secondly, BNPL loans are inherently less risky than revolving loans, but vulnerable consumers can still get into trouble without a clear and complete picture of their exposure. Qlarifi provides a critical piece of infrastructure to ensure that the BNPL lenders can mitigate behaviours such as loan stacking and over extension. 

Qlarifi Reports, like any credit report, will be available to the consumer and enable consumers to track their historic and future BNPL repayments in one place, giving them more visibility and thus control over their finances. Lastly, consumers that are able to demonstrate responsible BNPL usage will be able to leverage this data to improve their access to all types of responsible credit - a huge consumer benefit that goes beyond the BNPL industry.

What about concerns regarding data security and how consumers’ data is used?

Loïc: We take this extremely seriously. We have the advantage of building a product that incorporates data protection by default and design. The platform meets specific data protection goals: it doesn’t require a lot of consumers’ personal information in the first place, we shield consumer identities through advanced encryption protocols and we segregate information into dedicated, encrypted databases to prevent intermingling of data. Our position as a start-up allows us to meet exacting privacy demands, because we can build tech specifically for those demands.

What do you see as the key benefits of using Qlarifi for individual BNPL providers?

Alex: “Through using the Qlarifi platform, we want to give BNPLs the opportunity to enhance their underwriting, which will lead to numerous subsequent benefits like offering BNPL to more consumers, adjusting loan amounts with more precision, and better risk management. They can draw upon clean, structured, BNPL-specific data in a report that includes a depth of detail about repayment behaviour not currently available. More predictive risk assessment makes for drastically improved unit economics, further enhancing the sustainability of these types of consumer friendly lending types and letting them innovate. Those that aren’t enhancing their risk decisions with the best available data will be left behind. 

Loïc: “We wanted to build a solution that works for BNPLs on a practical level. This means low cost integration and customisable, easy-to-use reporting. Qlarifi makes sense because it is nimble and adaptable, and enables reporting that matches the characteristics of modern, short term lending products. In doing so, it also improves BNPL providers’ ability to detect fraud. 

What do you see as the key benefits for the BNPL industry as a whole?

Alex: We think that there are huge unrealised benefits to come from using the Qlarifi platform and creating a transparent reporting ecosystem, benefits that will contribute to the sustainability and continued growth of the BNPL industry - that, importantly, help BNPL providers and consumers alike.

In the short term, the ability for BNPLs to identify loan stacking in their customers is transformative, and sends a clear signal to regulators and policy makers that BNPLs take their roles as responsible lenders seriously. It will give BNPLs a non-intrusive way to identify customers who might be overstretched and ensure that lending only occurs where it is responsible. 

And in the longer term? What do you think the impact of Qlarifi will be on the BNPL market?

Loic: Qlarifi will bring the credit reporting industry forward and help grow the legitimacy of BNPL. We’re aiming to bridge the divide between the old world and the new. Consumers’ will be able to increasingly rely on BNPL as a responsible lending product, in a way that makes sense in a data-driven world. BNPLs will also have greater trust in their reporting systems, which makes for a more reliable, reciprocal ecosystem that encourages good behaviour from all participants. 

We believe in a future of sustainable growth in the BNPL market, and see our product as a path forward to that growth.

How does Qlarifi align with the regulatory aims for BNPL that we hear out of regulatory agencies around the world?

Loïc: We think we are perfectly aligned. We have taken every step on our development journey with the guiding principles of improving consumer outcomes and making the BNPL industry as robust on security as it possibly can be. We like to say that data protection is in our DNA.

Alex: We hear a lot of the regulatory concerns about transparency and consumer vulnerability. We consider our platform is an ideal way to solve them, because it is designed for the BNPL lender to have visibility over their customer’s total BNPL exposure, but without compromising that customer’s personal information in any way. We also wanted to innovate in our report by designing it so that it meets the requirements of today’s exacting antitrust standards, by not sharing any information between providers that could be used in an anti-competitive way. 

Our team has deep experience working with regulators and we have made it a priority to smooth that path for the BNPLs, so that their engagements with regulators are as productive as can be.