Equipifi adds risk-based pricing to its bank and credit-union BNPL decision engine
The new capability lets financial institutions vary installment-loan limits, rates and repayment terms using account-level cash-flow and transaction data instead of issuing the same terms to every borrower.
Equipifi, a buy-now-pay-later platform built for banks and credit unions, has added risk-based pricing to its decision engine, the company said this week. The feature is designed to let a financial institution personalize a borrower's installment-loan amount, interest rate and repayment schedule rather than relying on a single set of terms for every applicant.
The engine can use an account holder's real-time cash flow, relationship tenure and transaction history as inputs to those decisions, according to Equipifi. That puts the product closer to account-based credit decisioning than a simple checkout installment widget: the lender is using information it already holds about a customer to set terms inside its own digital-banking experience.
Equipifi's stated objective is to help banks and credit unions compete with third-party BNPL providers while retaining the customer relationship and loan economics. Risk-based offers can also give lenders a middle path between approving a standard offer and declining a borrower altogether, although the effect on approval rates and borrower costs will depend on each institution's model and pricing policy.
Personalized pricing also raises familiar governance questions. Institutions using transaction data to alter credit terms still need to validate their models for fair-lending performance, explain adverse decisions, and make clear to consumers how rates and repayment obligations are determined. Equipifi has not published independent performance results for the new feature or identified the institutions using it in production.