HM Treasury said in June 2022 that the Financial Conduct Authority (FCA) would issue a new set of regulations for companies working in the UK finance sector. Buy-now-pay-later (BNPL) enterprises and other unregulated organizations are prohibited from promoting their financial services on the wall gardens of Meta Platforms, Inc. (Facebook) and Alphabet Inc.’s Google. In the end, these are considered financial promotions, which need a business to be controlled. This news will also affect merchants due to the cyclical nature of the situation, as merchants are not licensed, credit brokers. Thus, they are unable to display advertisements advertising their credit (BNPL) button on the checkout page — a crucial revenue generator.
To combat fraud and impersonation in financial services advertising, while the formal mechanism has not yet been established, any entity that runs financial advertisements in the United Kingdom must now register with the FCA and obtain clearance before publishing an advertisement. The new restrictions prohibit firms from utilizing cookies for targeted advertising, which might raise privacy and data sharing concerns.
UK Unicorn Zero Is Currently Compliant With New FCA Regulations
The UK Unicorn Zilch (ZIZTF) complies with the new FCA regulations since it has already created a customer-centric payments model that distinguishes it from most BNPL 1.0 providers. While many financial service providers must now make immediate modifications, Zilch’s consumer-focused service does not require an update. In the meantime, the media has highlighted some of Zilch’s competitors and the adjustments they must make to remain compliant.
In addition, the new restrictions will affect the social media advertising efforts of numerous companies, which will now be watched more closely. However, other companies, such as Zilch, have received confirmation from social media sites that their accounts are associated with FCA-registered organizations. For instance, Facebook Meta has validated Zilch’s social media account and let them continue advertising their consumer-centric payment services uninterruptedly.
In February 2021, when the FCA published new requirements to safeguard consumers, BNPL providers found themselves in a similar predicament. As a result of using some BNPL providers during the COVID-19 outbreak, several consumers had gone into considerable debt. Similar to today, Zilch was already compliant with all new requirements when the FCA published them, making it the only payments service regulated by the FCA while its competitors made the required adjustments to keep up.
The Direct-to-Consumer Model of Zilch
Zilch was quickly climbing the ranks of the BNPL industry to Unicorn status under the leadership of CEO and Co-Founder Philip Belamant when the FCA released new regulations at the start of 2021, but many more consumers began utilizing Zilch’s ground-breaking payment solution when they discovered it’s a safer way to shop.
Zilch provides a safer shopping experience with its direct-to-consumer strategy, which is distinct from the typical direct-to-merchant paradigm. Instead of collaborating with shops like the majority of BNPL providers, Zilch works directly with consumers. Thus, the payments provider can provide clients with a virtual Zilch card with a pre-approved spending limit, allowing them to shop at any of the 37 million businesses that accept MasterCard payments in-store or online.
This innovative technique enables Zilch to give the benefits of both debit and credit. Cash-back incentives are available to consumers who pay in a single transaction or who spread their payments out over six weeks in four transactions at 0% APR. Zilch adds value to every transaction for its consumers and eliminates their concerns about late fees and interest payments.
Featured Image: Megapixl @Timonschneider
