OneBlinc echoes this theme. He says he offers “socially responsible credit” and that his credit is “for people who work hard and need help to make ends meet.” This form of inclusion “is the best way to reduce social inequalities” and constitutes “a real alternative to the vicious circle of predatory lending”, protecting borrowers from “abusive bank charges”.
Read between these lines and you will have an idea of who the desired customer is and is not. There are tens of millions of people who put all their spending on a single debit card for budgeting purposes, or on a single credit card to accumulate loyalty points. They are not the main targets here.
But many millions more default each month and pay fees to their bank when their checking balance can’t cover a charge. Others cannot qualify for credit cards or have lost their banking privileges. They may turn to payday lenders for short-term help, and these lenders can trap them in a cycle of high-interest debt.
To spare people all this is, indeed, a noble cause. Tying the reimbursement to a paycheck is a potentially reliable way to do this.
But, for businesses, the paycheck payment process is secondary. For them, the breakthrough lies in proprietary digital tools that allow them to lend to people, based on their employment status and income, that other companies would ignore. OneBlinc doesn’t even use credit checks, although it does report customer payments to Equifax, Experian, and TransUnion.
“We don’t believe in credit ratings,” Fabio Torelli, the chief executive, said in a 2019 press release, a sentiment he reiterated in an interview this week. “It is the ultimate symbol of an outdated model that we are determined to disrupt,” the statement continued.