(and counting) saved on admin and resourcing costs.
payment success rate.
Opening up financial services
Plend’s mission is to give everyone in the UK who can afford to pay back a fair, low-cost loan the chance to access one – something traditional credit scoring is failing to provide.
The company was born from the experience of Co-Founder and CEO Rob Pasco, who ran into debt problems after arriving in the UK from New Zealand 11 years ago without the right kind of credit score.
“I had two very expensive credit cards and got to a point where I couldn't actually service them, even though my career and income were progressing,” said Rob. “I had to go to a debt charity and restructure things.”
In response, Rob set out to fix the broken credit scoring system using open banking transaction data, and instant and recurring payments from GoCardless. Plend recently closed a £40 million seed funding round and is now helping British consumers with the escalating cost of living crisis.
The PLEND Score®
Using open banking transaction data, Plend has created 'The PLEND Score®', an alternative system to credit scoring built around a personalised financial assessment.
“A lot of credit scoring is driven by demographic data and no one's really taking the time to actually understand who you are and what you can afford,” said Rob. “Open banking allows us to look into an applicant’s underlying ingoings and outgoings to base lending decisions on more powerful insights. We can instantly assess someone for a loan and we wouldn't have gotten here without the power of open banking.”
Plend relies completely on GoCardless to collect payments from customers. Once approved for a loan, they’re directed to a Plend-branded GoCardless portal to set up a direct bank payment mandate.
“GoCardless is the only provider we need to help customers make their payments,” said Plend’s Co-Founder and CTO, Jamie Pursaill. “Whether it's their automatic direct debits, or one-off payments to catch-up or to pay off the loan in full, GoCardless provides that whole suite of services, which is fantastic.”
Beyond this one-stop payments shop, GoCardless helps Plend maintain a strong cashflow built around a high payment success rate. And it also allows it to maintain a lean finance team even as the company grows.
“The payment success we've seen from GoCardless is a hundred percent,” said Rob. “But one of the best features we've found is the ability to check customers’ accounts before the payment gets taken, which saves our team tons of admin time. We don't need a full-time financial operations person at this stage, which for a lending start-up is pretty unheard of.”
This drives massive savings for Plend, and there’s more to come according to Rob:
Easing the cost of living
As the cost of living crisis intensifies, people are finding it harder to make savings in the usual areas like energy bills and groceries, but credit has emerged as one of the few obligations in which costs can be cut through refinancing. Open banking-enabled Instant Bank Pay from GoCardless allows Plend to offer some much needed flexibility to customers.
“We're seeing a rise in part-settlement payments with customers wanting to overpay to bring down their borrowing sooner,” said Rob. “Instant Bank Pay is a fantastic product that allows us to provide a very quick, easily authenticated payment link to the customer, which we can quickly reconcile on the other side.”
And there are more open banking developments in the pipeline, in the shape of Variable Recurring Payments (VRPs), that will enable Plend to be even more responsive to customers’ needs.
“VRPs will enable a more dynamic collection process — the ability to change the collection date or the amount based on the customer’s actual bank account data is a fantastic next step,” said Rob.
A payments partner that fits the bill
The recent funding injection has given Plend the opportunity to accelerate its growth plans and payments innovation is high on the agenda. For that, it needs a responsive partner that it can work closely with, and Jamie believes GoCardless fits the bill.
“All the best tech is almost invisible because of how well it slots into your existing systems and processes,” he said. “You don't have to think about GoCardless, it's intuitive and reliable. The GoCardless team are also a lovely bunch of people. We know that whenever we get in touch with them we’re talking to a bunch of fellow enthusiasts, who are always going to be excited about whatever our new idea is.”