The UK’s lending sector is in need of modernisation according to a new report from the paytech powering recurring commerce, Acquired.com.
Acquired.com has been examining those who have taken out a loan in the last 12 months and has now revealed consumer expectations outpace the lending industry’s traditional repayment models. The report revealed that 61 per cent of sub-prime borrowers, 64 per cent of near-prime borrowers and 68 per cent of prime borrowers said they have funds available elsewhere when a loan payment declines.
In many cases these funds can be used for repayments, however, many lenders continue to rely on rigid repayment systems that don’t accommodate today’s multi-account environment.
Unsurprisingly, lenders that offer multi-payment repayment strategies have seen significant benefits since their implementation. Zopa Bank has increased its recovery rate on failed payments by 10 per cent by integrating Acquired.com’s Payment Links capability into its recovery strategy. Zopa has recovered nearly £1million in collections through this method alone.
The report by Acquired.com also found that 75 per cent of near-prime borrowers and 70 per cent of sub-prime borrowers use two or more lenders concurrently, indicating that credit is increasingly treated as a flexible tool for managing day-to-day financial needs. However, lenders continue to rely on long-term relationships with borrowers to achieve returns.
Other insights from the report included:
- Stated preferences don’t always reflect repayment behaviour – 63 per cent of prime respondents prefer direct debit, compared to 41 per cent of sub-prime respondents, and older demographics have a stronger preference for direct debit. However, failed direct debit payments are not confirmed until two days after the charge date, slowing intervention time. Lenders need to implement intelligent payment options, like Pay by Bank, to increase visibility on delayed payments.
- Digital wallets are an untapped potential – Despite rapid adoption in e-commerce and retail, lenders have been slow to adopt digital wallets for repayments, with many still relying on traditional methods like direct debit and card payments that require borrowers to manually input their details.
Sweeping VRP solution
To address the growing innovation gap in the UK’s lending market, Acquired.com has launched a proprietary Sweeping VRP solution. VRPs offer a modern alternative to traditional repayment structures that combine the speed of card payments with the reliability and structure of Direct Debit. Acquired.com’s solution has been purpose-built to support lenders in delivering flexible, intelligent repayment journeys.
Greg Cox, CEO at Acquired.com, said: “The lending landscape is evolving, and so must the tools and strategies used to navigate it. There has been some progress across the industry, but there’s still significant ground to cover. The path forward is clear: lenders who orchestrate intelligent, responsive repayment experiences will collect more, spend less, and build stronger borrower relationships. Those who continue with rigid, single-channel approaches will fall further behind—in collections, costs, and compliance.”
