This is a departure from issuing a revolving credit line to the consumers and then comes reserve Bank of India (RBI) has recently banned fintech firms from loading credit line Wallets and on prepaid payment instruments.
Credit card challenger Unicorn in a note on Tuesday informed consumers about the change in its credit model. ET has reviewed the copy of the note.
Slice said that this card will offer a real-time term loan to the customers instead of a revolving credit line for every transaction.
According to Consumer Communications reviewed by ET, the fintech player is calling the new model ‘purchase power’.
“Purchase power is an estimated amount that you may qualify to borrow from Slice,” the company told users, adding that the real-time risk underwriting will be backed by its data and technical infrastructure to provide users with the best possible credit. To be. deal.
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As per the communication, “Every time you transact with your Slice Card, a fresh approval decision will be taken immediately to assess the best amount you can borrow for the purchase. The decision will be taken primarily by the merchant. will be determined on the basis of the reliability, risk, fraud investigation and repayment pattern along with your past payments.”
Slice assured customers that the change in its credit model would not negatively impact their credit scores, as it would continue to follow the credit bureau reporting process.
Slice did not respond to ET’s questions until press time on Tuesday.
While this change may create uncertainty as to whether users will get credit at the point of sale, customers can check their spending power on the app to get an indication of their spending power.
Slice is offering its prepaid card users a host of credit features including its ‘pay-in-3’ offering, no-interest monthly installments (EMIs). However, with the change in credit model, all loans extended to card customers will now be a term loan, processed in real time.
ET first reported on 18 July that
Slice’s ongoing fundraising was halted following the RBI order, Due to the lack of regulatory clarity in the area.
Led by Tiger Global, Slice already raised $50 million last month. It wanted to add at least $50 million to its latest round and was in talks with new and existing investors.
After raising $220 million in a round led by Tiger Global and Insight Partners, the Bengaluru-based firm entered India’s long list of unicorns or startups with a valuation of $1 billion or more in November last year. It was valued at about $1.5 billion in June after funding of $50 million.
After RBI circular, many fintech firms involved
LazyPay has also updated their terms and conditions to reflect compliance.
“The terms and conditions (T&C) are currently being changed in two cases. If there was a non-bank PPI, they are stating in their T&C that the money will not be delivered to the consumer’s wallet, but to their bank account (in the form of cash). Second, is that the entire overdraft should be viewed as a term loan arrangement and not as a revolving credit line,” said the founder of a fintech firm, who did not wish to be named.