OAKLAND, Calif.--(BUSINESS WIRE)--Peach Finance, the leading modern loan management and servicing technology platform, today announced that it has joined the Mastercard Engage Partner Network as a fintech enabler to help bring consumers more payments choices. The partnership is currently focused on supporting lenders in developing buy now, pay later (BNPL) solutions leveraging the Mastercard Installments program.
BNPL is growing rapidly, with a projected e-commerce transaction value of $7.2T by 2025. But one of the barriers to growth in the space has been the challenge of merchant acceptance—BNPL providers must build merchant acceptance relationships one by one. Mastercard has helped solve this problem by developing a BNPL solution that’s available everywhere Mastercard is accepted.
An excerpt from the press release
OAKLAND, Calif.--(BUSINESS WIRE)--Peach Finance, the leading modern loan management and servicing technology platform, today announced that it has joined the Mastercard Engage Partner Network as a fintech enabler to help bring consumers more payments choices. The partnership is currently focused on supporting lenders in developing buy now, pay later (BNPL) solutions leveraging the Mastercard Installments program.
BNPL is growing rapidly, with a projected e-commerce transaction value of $7.2T by 2025. But one of the barriers to growth in the space has been the challenge of merchant acceptance—BNPL providers must build merchant acceptance relationships one by one. Mastercard has helped solve this problem by developing a BNPL solution that’s available everywhere Mastercard is accepted.
The new Mastercard Installments program brings scale, flexibility and simplicity to the BNPL space by helping banks, lenders, wallets and fintechs get to market faster—all with the security and peace of mind that come with Mastercard. As a qualified Engage partner, Peach will provide issuers in the Mastercard network the servicing technology they need to quickly launch highly flexible programs using Mastercard Installments.
An additional barrier to BNPL growth has been the challenge of launching newer lending constructs like BNPL on legacy servicing technology. That’s where modern servicing solutions like Peach can help. Peach’s platform is agnostic to asset class, enabling lenders to offer virtually any type of lending program, including novel constructs.
“Servicing technology is arguably the most critical component of the lending tech stack,” said Russell Braden, Peach’s VP of Product. “When novel lending constructs arise, a lender’s servicing tech can either be a competitive advantage or a hindrance. That’s why we designed Peach’s platform around an Adaptive Core, which gives lenders the flexibility to launch virtually any loan type in any asset class and continually refine their lending programs at scale.”
Braden continued: “We’re proud to be part of the Mastercard Engage network, where we can offer our modern platform and deep BNPL expertise to many of today’s top lending innovators. We believe that unlocking lending innovation is fundamentally good for borrowers and for the financial industry, and our partnership with Mastercard has the potential to significantly accelerate this innovation.”
Peach’s platform is designed to help lenders launch and scale modern lending products. Peach provides a loan management system, an integrated suite of servicing tools and Compliance Guard™, a proprietary compliance monitoring system. Unlike other lending technology platforms…(continue to Business Wire)
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Related: Peach joins Visa Ready for BNPL program
lender’s priority list. But that doesn’t mean compliance is straightforward, even for lenders with the most earnest intentions. Often, legacy infrastructure is the culprit, making it difficult for lenders to take the actions clearly outlined in the law. Even regulations that haven’t changed for some time—like the—still present significant challenges for many lenders.
The SCRA grants active-duty service members the ability to request certain protections during the period of their deployment, enabling them to devote their energy to serving the country. These protections include a reduction in interest rate to a maximum of six percent on any pre-service loans. While the SCRA in its current version has been law since 2003, the number of recent enforcement actions indicates just how difficult it is for many lenders to comply with the SCRA’s interest rate protections.
Blunt tools in the absence of a scalpel
For example, in October of 2022 the Department of Justice (DOJ) announced that the financial leasing arm of GM agreed to pay over $3.5 million to resolve allegations in relation to
Peach’s approach to SCRA
At Peach, we brought real-life lending experience to the design of our platform. So from day one, we recognized the importance of being able to make retroactive changes to loans. (There are numerous applications beyond SCRA, including our Supported Portfolio Migration.) In the case of SCRA, Peach has long enabled lenders to retroactively change interest rates and waive past fees—as separate, manual actions.
Peach’s approach to SCRA
This was functional, but the ideal way to implement SCRA is to make these changes simultaneously. We now support this capability by leveraging the power of Peach's Loan Replay™ engine, which can make changes to the ledger at any time, and then recalculate a loan’s history in light of those changes. The new combined functionality is as user-friendly for your agents as processing a payment.
Peach’s approach to SCRA
Specifically, the new SCRA feature allows your agents to perform the following adjustments simultaneously on a loan of an active-duty service member:
- Lower interest rates to 6% (and lower the recurring payment during the active-duty period to account for the interest rate reduction)
- Waive fees, if necessary
- Enact these changes retroactively, if necessary, and replay the loan history with the rate and fee adjustments
- Preview the intended changes
“We launched our first product on Peach in six weeks. Eighteen months later.”
John Smith, CMO
Our SCRA functionality is available via API as well as through our white-label agent tool. The white-label agent interface can be seen here:
Peach’s approach to SCRA
Our SCRA functionality is available via API as well as through our white-label agent tool. The white-label agent interface can be seen here:
For those working directly with the API, this can be as simple as sending the following request body to the SCRA endpoint:
You’ll receive a response with either the actual post-SCRA adjusted payment plan or a preview of it. Below is a comparison of a payment plan prior to the SCRA adjustment, and the expected payments after the SCRA adjustment. The SCRA period is in effect for the first two months, and thus you will see the interest rates lowered to 6% in the response body (and the recurring amount due lowered by the amount of the interest rate reduction for the two relevant months). The origination fee has also been canceled.
The breadth of loan data needing to be adjusted means that rewriting loan histories requires the right design and abstractions, and having a built-in layer of abstraction to handle retroactive changes is the only feasible approach. Because of our team’s combined experience in the real world of lending, we know that the need to edit past loan events is inevitable. So we’ve designed a system that makes these changes as painless and automated as possible.
