Cocoon Announces Partnership With Nuapay

Partnering with Nuapay, the Cocoon solution provides secure, efficient and effortless point of sale finance to a range of consumers

Cocoon, the alternative point of sale instalment provider, is delighted to announce a partnership with Nuapay, an Open Banking payments platform, that will further the mission of bringing about greater financial inclusion.

Cocoon have launched an instalment solution based on Open Banking technology, to enable merchants to offer interest-free point of sale finance to a broader range of consumers, some of whom are ‘thin file’ and may be rejected by traditional providers. Under the partnership Cocoon will leverage Nuapay’s Open Banking and Account-2-Account solutions to power payment plans from consumers.

Cocoon’s instalment solution combines new technology, product and risk capabilities, to bring an innovative product to market. Using Cocoon’s solutions, merchants will be able to leverage smarter decision making capabilities based on Open Banking, and a more accurate and complete picture of a consumer’s financial situation. Merchants will be able to grow their customer base with better instalment finance solutions.

Merchants using Cocoon will be issued a business payments account with Nuapay, through which they will be able to initiate, track and manage their customers’ payments and repayments. By utilising Nuapay’s services all payments will be enabled by Open Banking, which means that no payment cards will be involved. As a result, merchants will not be subject to increases in card scheme fees, such as the recently announced five-fold increase in transaction fees for cross-channel purchases as the UK leaves the European Union.

Because no card details are used, the risk of fraud for merchants is also dramatically reduced, as all customers will complete Strong Customer Authentication (SCA) using Open Banking solutions. This comes as research suggests that 24% of online card transactions could fail if 3DS was introduced. By having an alternative payment method readily available, Cocoon and Nuapay’s partnership enables retailers to capitalise on the increasing digital demand while ensuring a superior customer experience.

As well as the instalment solutions, Cocoon will also offer instant payments via Open Banking. This enables Cocoon’s merchant partners to easily send payment links to their customers to make the payment in their own time. This improves operational efficiency for merchants by removing the friction of taking sensitive card details over the phone and reducing fraud rates.

Cocoon is currently working with merchants in the healthcare sector and aims to help increase access to 0%-interest instalment finance to those consumers that are currently excluded by mainstream providers. PWC estimate that up to 20-25% of the UK adult population find it difficult to access credit from mainstream providers, and Cocoon’s aim to use Open Banking technology to help merchant’s serve these consumers.

Interestingly, education - another sector where Cocoon aims to improve financial inclusion - is a sector where just under half (44.35%) of 25-34 year olds also said they’d be willing to use Open Banking payments.

Sam Meekins, Head of Product at Cocoon, comments: “Our mission is to increase financial inclusion for customers that are excluded from mainstream providers, and to help merchants increase their profit margins. Partnering with Nuapay brings us a big step closer to reaching that goal. Nuapay is the only Open Banking provider that gives us access to a full payments solution within one platform, meaning we can spend more time focused on our customers.”

Nick Raper, Head of UK at Nuapay, comments: “Fintech has the ability to play a leading role in financial inclusion. We’re proud to be partnering with Cocoon, who are not only prioritising ‘thin-file’ customers, but are also using Open Banking payments to improve the customer and merchant experience.. It’s partnerships like these that demonstrate the good that Open Banking technology is enabling across financial services and wider society.”