UK credit provider, NewDay, has launched what it claims is the UK’s first completely cardless consumer credit proposition.
Branded as Bip, it is available via the App Store and Google Play and can be added to users’ mobile digital wallets.
It can be used anywhere Mastercard is accepted when making contactless or online payments.
If eligible, users can be up and running “in minutes”, with no need to wait for a card and PIN to be despatched by post.
It is paperless (and plastic-less) apart from regulatory required communications such as letters regarding changes to credit limit. It includes secure access to CVV via the app.
Bip comes with a single interest rate of typically 29.9% APR (so no annual, FX or late payment fees).
Customers can set two kinds of spending caps to give them control, including a warning and a freeze cap within the app. They can also set spending alerts.
A Payment Calculator allows them to see how much they could save on interest by increasing repayments. There is also a chat function to help customers service their account.
NewDay says it has involved its customers in the design of Bip from the start. It has recruited a waiting list of over 30,000 customers through the development and testing of the new offering.
Bip will see a full consumer launch including mass market advertising later this year.
Sharvan Selvam, commercial director at NewDay, says: “It is a proposition designed to make credit easy to access, simple to use and, importantly, puts the customer in full control.”
NewDay offers credit to a broad spectrum of UK customers, providing credit to nearly 5 million consumers, including underserved sections of the market.
The provider has seen digital wallet and contactless use of its other products more than double in the past year, from around 8% in August 2020 to 20% in June 2021 across customer retail spending.
This is in line with wider trends, with 13.7 million people in the UK leading a “cashless life” in 2020 according to UK Finance.
Ian Corfield, chief commercial officer at NewDay, adds: “We have seen a huge shift in the number of consumers who are swapping their physical wallet for a digital one.
“Consequently, we believe Bip will have a wide appeal, from early adopters and tech savvy individuals through to more mainstream consumers who are now more comfortable using their digital wallets for payment.
“This is even more relevant today as changes in spending habits have been dramatically accelerated by the coronavirus pandemic, with cash use falling dramatically from 60% to just 15% of transactions, highlighting our acceleration towards becoming a cashless society.”