Latest news with #consumercredit
Finextra
11 hours ago
- Business
- Finextra
ClarityPay achieves profitability, raises growth capital
ClarityPay, a provider of configurable pay over time plans that help merchants convert shoppers into customers, announced today the closing of an equity round led by TTV Capital with participation from Vesey Ventures. 0 As part of the round, Gardiner Garrard, Co Founder and Managing Partner at TTV Capital, and Lindsay Fitzgerald, Co-Founder and General Partner at Vesey Ventures, will join ClarityPay's Board of Directors, bringing decades of fintech investment and scaling expertise to support the company's next stage of growth. They will join the existing board which includes CEO & Founder Houman Motaharian and previous investors, Neuberger's Outpost Ventures fund, represented by Peter Sterling and Zhengyuan Lu. The equity financing follows the announcement of a $1 billion capital purchase program with funds managed by Neuberger Specialty Finance group in February. Now profitable, ClarityPay operates a proven, scalable platform that modernizes how merchants leverage consumer credit to drive sales. ClarityPay solves longstanding challenges in aligning consumer financing with merchants' complex and highly segmented growth strategies. Their modular approach enables personalized credit offers across acquisition channels, at the right economics, to help merchants convert more customers and grow profitably. ClarityPay enables merchants to: • Approve more customers across the full credit spectrum—from super to subprime—with full approvals that match total order values • Offer flexible payment plans, from 4-week installments to 84-month revolving terms • Establish dedicated credit lines tied to their brand, driving repeat purchases and long-term customer loyalty • Maintain full control of customer experience and data—with no competitive cross-sell 'From day one, we've been focused on delivering measurable value to merchants—creating a scalable, configurable credit solution that helps them acquire and retain more customers,' said Houman Motaharian, CEO and Founder of ClarityPay. 'With this additional capital and achieving profitability, we are uniquely positioned to give merchants more credit controls and greater flexibility to drive long-term loyalty. This next chapter is about scaling that impact by staying focused on a merchant-first approach, with major national merchants already operating at scale on our platform and additional partners to be announced soon.' ClarityPay supports merchants in industries such as retail, elective health, wellness, travel, home improvement, and auto services. Integration is available via API or through major commerce and lending platforms—enabling seamless financing across in-store, online, and telesales channels. 'We've been investing in fintech infrastructure for over two decades, and ClarityPay is one of the most compelling companies we've seen,' said Gardiner Garrard, Co-Founder and Managing Partner at TTV Capital. 'Houman and his team bring a rare mix of operational discipline and market insight, with a product that solves real pain points in point-of-sale credit. The opportunity to modernize merchant-aligned lending—across categories and credit tiers—is massive, and ClarityPay is uniquely positioned to lead it.' 'ClarityPay is tackling one of the most stubborn gaps in embedded finance: how to make credit work for merchants, not just adjacent to them,' said Lindsay Fitzgerald, Co-Founder and General Partner at Vesey Ventures. 'The team has deep credit expertise, commercial rigor, and the urgency to execute in a market that's changing fast. What they've built—profitable growth, strong unit economics, real merchant traction—is incredibly rare. We're excited to support them as they scale a solution that creates real alignment between lenders, merchants, and consumers.' The new equity funding will support operational scale, product development, and continued hiring across technology, partnerships, client success, and customer service.
Yahoo
21-07-2025
- Business
- Yahoo
FCA plans to regulate BNPL-industry reaction
The FCA has long been calling for BNPL to be regulated-and finally there is light at the tunnel. According to the FCA, BNPL lending has grown in the UK from £60m in 2017 to more than £13bn in 2024. FCA research on unregulated BNPL found 1-in-5 (20%) UK adults (10.9 million) had used it at least once in the 12 months to May 2024, up from 17% (8.8 million) in 2022. Despite not yet having regulatory oversight of BNPL firms, the FCA has already secured changes to unfair contract terms and warned firms about misleading advertising. BNPL regulation-industry reaction A Clearpay spokesperson commented: 'With the FCA publishing its proposed rules to regulate Buy Now, Pay Later (BNPL), the 12-month countdown is now on. We will support the FCA as it consults on and finalises its specific rules for the sector. Coming into force on 15 July 2026, regulation will establish a consistent operating environment and clear compliance standards for all providers. Clearpay has always called for fit-for-purpose regulation that ensures consumer protection, provides much-needed innovation in consumer credit and supports the UK's thriving FinTech sector. 'Clearpay research highlighted that nearly half of UK adults (48%) are more likely to use BNPL once regulation is passed, and with 71% believing that it is important for BNPL to be subject to UK financial legislation, today's announcement will help foster trust among consumers. It will also create a more sustainable foundation for the future of BNPL as it continues to grow as an everyday payment option for consumers.' Hyder Jumabhoy, Partner at international law firm White & Case LLP and Global Co-head of its Financial Institutions Industry Group The FCA's tightening of regulations around the BNPL sector in the UK will subject lenders to more robust consumer protection and tougher credit check requirements. Alongside the rise in interest rates pushing up the cost of capital to providers, compliance with these changes is likely to increase operating costs and squeeze margins further for many BNPL providers. This will create pressure on BNPL firms to scale-up their compliance functions, but it could also drive a wave of consolidation in the market, especially among smaller providers. Challenger banks could be particularly active in this space, seeking to enhance their consumer lending propositions by acquiring BNPL platforms with established merchant networks and user bases. Sarah Pritchard, deputy chief executive, FCA We have long called for BNPL products to be brought into our remit, so people can benefit from BNPL while being protected. Our regulation will help consumers navigate their financial lives, with checks on whether they can afford to repay, support when things go wrong and access to the right information to make informed decisions. We're mainly relying on existing requirements, including the Consumer Duty, rather than proposing to make lots of new rules, supporting growth and allowing firms to innovate. Samuel Riordan, Executive Director of banking & payments, Capco The new BNPL protections prioritise stronger affordability checks and complaint options for consumers if something goes wrong. The challenge will be ensuring this doesn't erode the core experience that has driven BNPL's popularity. Many BNPL firms will already have plans underway: developing more robust and exhaustive affordability checks, enhancing refunds and dispute management processes, and embedding new expertise for complaints submitted to the Financial Ombudsman. This is a big step towards enhancing consumer protections for a fast-growing product, that has attracted millions of consumers across the UK due to its seamless checkout experience and customer centric flexibility. The balance will need to be struck between strengthening the regulators controls over a new part of the market and ensuring customers' choice and experience remains at the heart of these innovators business models. Richard Pinch, Senior Director of Risk, Broadstone. As the FCA moves to tighten regulations around the Buy Now Pay Later (BNPL) sector, providers will be under increasing pressure to enhance creditworthiness and affordability assessments and also demonstrate robust consumer protections. This marks a significant shift away from the relatively light-touch model BNPL firms have operated under, and places greater emphasis on affordability checks, credit reporting and fair treatment of borrowers. In addition, the extension of Section 75 protections for consumers will mean firms will be jointly responsible with retailers for faulty or undelivered goods placing even more responsibility on risk and compliance teams to oversee merchant partners. All this in combination will pose a challenge to BNPL lenders, particularly those at the smaller end of the market, as those firms will need stronger data capabilities, credit risk assessment and monitoring tools to meet the FCA's expectations. It is likely that these pressures could trigger consolidation within the market as smaller players are absorbed by those with greater capacity and finances to meet these new demands. "FCA plans to regulate BNPL-industry reaction" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. 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Yahoo
15-07-2025
- Business
- Yahoo
Pagaya Technologies (PGY): A Bull Case Theory
We came across a bullish thesis on Pagaya Technologies on MVC Investing's Substack by M. V. Cunha. As of 14ᵗʰ July, Pagaya Technologies's share was trading at $23.69. PGY's forward P/E was 47.38 according to Yahoo Finance. A businessman holding a check approving a loan while standing in front of a bank's lobby. Pagaya Technologies operates a B2B2C fintech platform leveraging AI to underwrite consumer credit at scale. The company's core business revolves around using proprietary AI models to assess credit applications, enable seamless loan origination through banking partners, and monetize the process via fee income tied to both underwriting and capital markets activities. Pagaya's model is asset-light, fee-driven, and data-centric, positioning it as a 'technology-first enabler' in the lending ecosystem. The company has built a differentiated, scalable, and capital-efficient model to serve the next generation of consumer credit. By combining AI decision-making with capital markets execution, Pagaya monetizes the full underwriting to funding lifecycle while avoiding the credit risk burden of a traditional lender. Pagaya's business model is becoming both more profitable and more resilient as it matures, with a shift toward more capital-efficient structures and a greater reliance on embedded partnerships with banks and fintechs. Pagaya's Q1 2025 results represent a decisive inflection point, with the company emerging as a self-funded, highly efficient operating model with strong earnings momentum. The company's financial performance, including a record $290M in revenue and $80M in adjusted EBITDA, underscores a powerful narrative of monetizing loan volume more efficiently, with FRLPC margins hitting all-time highs, operating leverage expanding, and GAAP profitability arriving ahead of schedule. Previously, we covered a bullish thesis on Pagaya Technologies by Unconventional Value on February 12, 2025, which highlighted the company's potential to transform the U.S. consumer credit markets using AI. The stock has appreciated by 109.46% since our coverage, as the thesis played out with the company originating over $26 billion in loans and capturing about 70% of the personal loan ABS market. M. V. Cunha shares a similar view, emphasizing Pagaya's scalable and capital-efficient model, which has led to a record $290M in revenue and $80M in adjusted EBITDA in Q1 2025. Pagaya Technologies is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held PGY at the end of first quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of PGY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to Blackrock. Disclosure: None.
Reuters
11-07-2025
- Business
- Reuters
Chinese banks stumble on Beijing's consumer lending push
BEIJING, July 11 (Reuters) - Chinese banks are struggling to comply with new Beijing guidelines to boost consumer credit as they reel from a surge of defaults on personal loans and have a hard time finding households in good financial shape that want to borrow. Since March, financial regulators have issued multiple directives urging banks to offer more, and cheaper, loans to spur consumption, as part of broader efforts to counter the impact of the trade war with the United States. This prompted banks to market personal loans at record low interest rates below 3% initially, before raising them back amid concerns over shrinking profit margins. Loan managers and bank executives told Reuters they are struggling to raise consumer lending, citing subdued demand, as well as concerns over an already rapidly growing pile of bad household debt and uncertainty over their clients' incomes. Recent wage cuts in the financial industry, manufacturing and the state sector have further dented households' financial health while higher U.S. tariffs are fuelling concerns over jobs and income stability. "It's very difficult to find borrowers for consumer loans," said a branch head at a state-owned bank, requesting anonymity due to the sensitivity of the topic. "Banks are caught between meeting lending targets and controlling bad loans." "If defaults rise, branch officers face penalties. Many loan officers borrow from each other's banks to meet lending quotas." The People's Bank of China and the National Financial Regulatory Administration did not immediately respond to requests for comment. Consumer loans grew 6.1% in the first quarter, slower than the 8.7% in the same period of 2024 and the 11% in January-March 2023, according to the central bank. Data for the second quarter is expected in coming weeks. The overall NPL ratio of China's commercial banks was 1.51% as of the end of March, remaining steady compared to 1.50% at the end of 2024, official data showed. Smaller rural commercial banks posted a higher NPL ratio of 2.86% in the first quarter compared to 1.22% at major state banks. Official data doesn't disclose the NPL ratio of overall consumer loans, but the bank executives and loan managers told Reuters the defaults on personal lending have risen sharply this year. BAD LOANS PILE UP The banks' struggles bode ill for official efforts to boost lending to consumers, seen as a faster alternative to raising household incomes. The latter would require indebted local governments spend more on social welfare and civil servants pay, among other measures. Any debt-driven jolt to consumption is likely to prove "transitory", said Lynn Song, chief Greater China economist at ING. "Income growth-driven consumption would be strongly preferable in terms of achieving a more sustainable recovery," Song said, adding that was a more difficult task for authorities. Economists aren't concerned about absolute household debt levels, which are about 60% of economic output in China, compared with about 70% in the U.S. and more than 90% in South Korea. But they worry about how quickly non-performing loans (NPLs) in the consumer debt sector have been rising. In the first quarter of this year, Chinese banks put up 74.27 billion yuan ($10.34 billion) of NPLs for sale, a 190.5% increase from the same period of 2024, data from the Banking Credit Asset Registration and Transfer Center show. About 70% of them were personal loans. "We have a growing pile of bad loans. For many clients who can't repay, all we can do is negotiate extensions," said a loan officer at a major state-owned bank. The officer said his bank prioritised writing off NPLs over issuing new loans. The Industrial Commercial Bank of China ( opens new tab, the world's largest commercial bank by assets, said its consumer NPL ratio rose to 2.39% at the end of 2024, from 1.34% a year earlier. Smaller, regional lenders are faring much worse. Bohai Bank's consumer NPL ratio jumped to 12.37% in 2024 from 4.44% the previous year. Harbin Bank's rose to 5.51% from 3.94%. "Clients are in poor operating conditions due to the tariffs war and unable to repay their loans," said a regional bank manager. Another key challenge for banks is that consumers don't want to borrow. A central bank survey of 20,000 households showed that 61.4% intend to boost savings — an increase of almost 20 percentage points from pre-pandemic levels. "The fundamental issue is that income growth is slowing and households are anxious, so they are restraining their spending and borrowing," said Christopher Beddor, deputy director of China research at Gavekal Dragonomics. "It's not that they can't get a cheap loan." ($1 = 7.1770 Chinese yuan)
Yahoo
07-07-2025
- Business
- Yahoo
Small Business Optimism, consumer credit data: What to Watch
Asking for a Trend host Josh Lipton outlines the top stories investors will be watching on Tuesday, July 8. Trade and tariffs will be watched closely after President Trump warned on Truth Social that some countries will be charged an additional 10% tariff. The June NFIB Small Business Optimism Index will be released, with economists expecting the number to hold relatively steady from May. Consumer credit data for May is also out tomorrow, with estimates of $10.5 billion — a sharp drop in borrowing from April's $17.9 billion. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here.
