Experian targets surge in buy now pay later market

Experian is jumping aboard the buy now pay later (BNPL) market – dominated by Klarna and Clearpay – with the launch of the BNPL Bureau, which the firm claims will protect consumer credit scores from negative impact.

The bureau, which the company insists is a “first-of-its kind” operation, is expected to launch this spring, and follows Experian’s assertion that it had seen a significant rise in demand for BNPL services.

The company said: “The BNPL Bureau will allow BNPL providers to furnish data on all types of point-of-sale products – enabling a comprehensive view of consumer payments, including the number of outstanding BNPL loans, total BNPL loan amounts and BNPL payment status.

“To protect consumer credit scores from immediate negative impact, detailed information related to each BNPL transaction will be stored separately from Experian’s core credit bureau data.

“By gaining a more complete view of consumer’s BNPL repayment behaviours, lenders can provide thin-file or subprime consumers who would otherwise be denied credit with first or second chances.

Experian said the bureau lets lenders access the insights they need to carry out “responsible and inclusive lending”, while still guarding consumer credit scores. It will also help consumers access financial services that are fair and affordable, the firm claims.

Experian Consumer Information Services vice president and chief product officer Greg Wright commented: “Our mission is to drive financial inclusion while ensuring responsible lending and we believe the reporting of BNPL payments plays a critical role in achieving this.

“At the same time, we are committed to giving BNPL providers the confidence they can report information to us without negatively impacting consumer credit scores.

“We are confident we have found a solution with The Buy Now Pay Later Bureau that will help protect consumer credit scores while bringing more transparency to the industry.”