100M people have used a BNPL service in the US and 1 in 4 US adults used it in 2023 alone. This is because BNPL is usually interest free, easy to use and transparent. However, there is a lack of BNPL specific reporting infrastructure available which restricts the ability for consumers to leverage the benefits of BNPL beyond the BNPL ecosystem. One key feature missing in the ecosystem is real-time reporting.

What is real-time reporting?

Real-time reporting is where a consumer's credit file would be updated immediately upon relevant activity. For example, when a consumer makes a purchase using a BNPL provider, with real-time reporting this activity will be reflected immediately on their credit report. If 10 minutes later, the same consumer attempts a purchase using a different BNPL provider, that provider would be able to see the previous BNPL purchase via Qlarifi’s real-time report.

As of today, the majority of credit activity (not including BNPL) is furnished to a consumer reporting agency (CRA) on a monthly basis. Monthly reporting makes sense for mortgages or car loans, but BNPL requires real-time updates since BNPL consumers can make multiple BNPL purchases in a given day. It shouldn't be up to BNPL to adapt to a reporting infrastructure that is not fit for modern fintech products; the data reporting and credit report refresh frequency should match the lending product used by consumers.

Why does this matter?

Consumer Protection

For consumer protection, it is critical to have reliable, real-time data to ensure that lenders have the data and tools available to protect vulnerable consumers - namely identify and mitigate loan stacking.  Without real-time reporting, there is no feasible method to prevent consumers from extending their credit with multiple providers in short succession, which can lead to overextension, and to both consumer and lender detriment. This is a key concern that regulators would like to see the industry take steps to resolve.

Enhanced underwriting by lenders

In addition to protecting vulnerable consumers, another tangible benefit is to improve underwriting decisions, enabling lenders to extend the right credit products at the right time to the right consumers. Lenders will also be better positioned to identify suspicious activity and potentially fraudulent transactions.

Consumer financial health

Although BNPL is a form of credit, it is also widely used as a cashflow management tool. For the same reasons that a consumer would expect accurate and up to date information in their banking apps to understand their cash position clearly, real-time reporting is essential for consumers to understand their overall financial position: transactions made, outstanding balances and upcoming repayment dates. 

Financial Inclusion

Importantly, real-time reporting can also contribute to financial inclusion as it makes it easier for BNPL consumers to demonstrate their creditworthiness. For individuals who are new to credit or have limited credit histories, the ability to show a record of responsible borrowing and repayment in real-time could be critical. An accurate and up to date repayments record can help underserved individuals gain access to broader financial services and opportunities that might have otherwise been unavailable.

Qlarifi Real-Time Reporting

Thankfully, real-time data streaming is not a new concept and is prevalent in all aspects of our lives already today (eg social media, trading and streaming). Qlarifi has leveraged the best technology available to build the first fit for purpose, real time BNPL credit bureau - enabling consumers to leverage the real time impact that this can have on their financial lives.