Finance
Updating traditional credit to help consumers navigate the cost of living
Published by maria gbaf
Posted on January 6, 2022
4 min readLast updated: January 28, 2026
Global Banking & Finance Review®
Company
Published by maria gbaf
Posted on January 6, 2022
4 min readLast updated: January 28, 2026
Updating traditional credit can help consumers manage living costs. FinTech innovations like BNPL offer flexible options, supported by regulation for consumer safety.
By Anthony Drury, UK Managing Director, Zip
Brits are starting to feel the pinch. Prices are going up, and with no clear end in sight as the impact of supply chain issues cause shortages and price increases across the country, we’re facing an uncertain winter.
Against this increasingly complicated price landscape, having confidence in your ability to keep on top of your finances is essential. However, the financial toolkit of today can be confusing and daunting.
It’s no surprise therefore that consumers are nervous when it comes to money, especially younger people, whose wages are stagnating, and rent is skyrocketing. In a recent survey, we found that nearly a third of under-35s have never felt financially secure, yet 87% see being financially secure as an essential part ‘adulting’ (aka behaving in a way characteristic of a responsible adult).
Fintech innovation can help
The good news, however, is that we are on living at a time of evolution. We have a suite of services at our fingertips that can better equip us when it comes to navigating the cost of living and making those important financial ‘adulting’ decisions.
Innovation is giving millions of customers choice, making alternative merchants more attractive. Neobanks that were once the unknown newbies are now the financial incumbents, embedded in the lives of millions of ordinary people. The same can be said for FinTechs which have come in and rapidly been adopted by consumers as a valuable alternative to their everyday financial products.
Buy Now, Pay Later (BNPL) is very quickly becoming one of these alternatives. According to the UK BNPL Foundation, this payment option is now used by 12.44 million British consumers, and due to grow exponentially to meet consumer demand as more recognise its flexibility and accessibility.
BNPL can be a force for good
There are some who want to see the back of BNPL, but I firmly believe those people are mistaken. BNPL was designed to complement consumer spending, giving adults a choice that traditional lines of credit are so often unable to do. With greater access to credit, consumers are empowered to invest in themselves and their family.
At Zip, our strategy is to support adults as they navigate both daily living expenses and those important life decisions that so often come with a financial burden. In Australia for example, our BNPL services are being used for exactly this. We have dentists and even an IVF clinic that offer our services, and in the UK, despite the lazy stereotypes, more often than not, clothes aren’t what our customers are using Zip for. We’re here for life’s necessities, not frivolities.
Backing BNPL with robust legislation
Of course, as with any new, innovative financial product, it’s important that customers are protected. We have robust practises in place already, but regulation too can be valuable if done correctly, because it ensures that there is clarity and consistency across the industry. It can give consumers confidence, provide retailers the opportunity to grow, and allow businesses like ours to invest and innovate in the UK.
With regulation pending in the UK and a consultation now underway, we welcome the opportunity to regulate the market, enabling healthy competition and managing consumer risk.
At Zip, our experience in mature BNPL markets make us unique in the UK, and we are here to show our competitors what responsible practice can look like. For example, we work closely with credit bureaus to determine customers’ creditworthiness by obtaining a credit score and provide bespoke credit limits, typically capped at £1,000 in total.
New credit options make for greater consumer choice
In short, credit is a good thing, but the traditional credit card model is proving itself to be unfair, which is where BNPL comes in. With products out there to improve accessibility, the future of finance is empowering consumer choice, especially in the face of growing price pressures. Building better, fairer products for customers will help them feel in control of their finances and ready to take on the challenge of financial adulting, be it tackling the weekly grocery list, or giving your bathroom a much-needed upgrade.
The article discusses updating traditional credit to help consumers navigate the rising cost of living.
FinTech innovations provide new tools and options, such as BNPL, to enhance financial security.
BNPL, or Buy Now, Pay Later, is a flexible payment option gaining popularity as an alternative to traditional credit.
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