Beyond Income Multiples: How PayPoint is Redefining Affordability in 2026

Traditional lending metrics are hitting a wall. In the current landscape, relying on static data like gross income and basic credit scores is no longer enough to protect consumers or lenders. Three major regulatory shifts, spanning mortgages, Buy Now, Pay Later (BNPL), and energy debt relief - all point to the same necessity: real-time visibility. At PayPoint, we believe that understanding a customer’s true financial health requires looking past what they should be able to afford and seeing what they can.

 

The Visibility Gap: Why Traditional Metrics Fall Short

Consider a borrower earning £60,000 with a flawless credit history. On paper, they easily meet a 4.5x income multiple. However, traditional assessments often miss the "hidden" drains on disposable income: Active BNPL accounts across multiple providers. Energy bills that have surged in recent months. Recurring subscriptions that quietly erode monthly budgets. In many cases, a borrower's actual disposable income is half of what the official paperwork suggests. 

Regulatory Evolution: From Mortgages to BNPL

The shift toward behavioural data is already being reflected in new regulations:

  • Mortgages (The MAA Expansion): Since July 2025, the FCA’s Modified Affordability Assessment (MAA) has allowed lenders to prioritize demonstrated payment behaviour. If a homeowner has successfully paid £1,400 a month for years, that is powerful evidence they can afford a new deal at £1,200, regardless of rigid stress tests. 

  • BNPL Regulation: Starting July 15, 2026, BNPL providers fall under FCA regulation, making affordability assessments mandatory. With over 10 million users in the UK, the challenge is capturing the cumulative exposure of many small transactions, often £50 to £200, that remain invisible to traditional credit checks until something goes wrong. 
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Smarter Debt Relief in the Energy Sector

The energy sector faces a similar hurdle. UK households currently owe £4.4 billion in energy debt. While schemes like Ofgem’s Debt Relief Proposal aim to help, relying on "benefit status" as a filter is often too crude. 

PayPoint’s approach utilizes Open Banking insights to create a more surgical response. By analysing real-time income and expenditure patterns, suppliers can:

  1. Identify working households just above the benefit threshold who are severely stretched.
  2. Spot early signs of financial stress before debt escalates.
  3. Offer targeted support that fulfils "Consumer Duty" obligations to avoid foreseeable harm. 

The Future of Assessment: Real-Time vs. Traditional

Traditional affordability checks often rely on static data like payslips, credit files, and estimated costs, which can miss the full financial picture.

PayPoint’s real-time transaction data provides a more accurate view through these key pillars:

Complete Commitment Visibility: Open Banking reveals "hidden" outgoings like undeclared direct debits, forgotten subscriptions, multiple BNPL accounts, and payday loans.

Analysis of Spending Habits: We identify signs of financial stress, such as overdraft reliance or volatile expenditure, which self-declared estimates often hide.

Automated Income Verification: We confirm the actual regularity and amount of income hitting an account, including benefits and multiple streams for gig economy workers.

Machine Learning (ML) Categorisation: Since manual review of 150+ monthly transactions is impossible, ML identifies merchants and patterns to turn data noise into clear affordability signals.

Advanced Infrastructure: Robust assessments require secure APIs, automated risk flagging, and real-time processing.

Accelerated Compliance: Building these tools in-house can take up to 24 months. Partnering with PayPoint allows lenders to meet compressed timelines driven by Consumer Duty and upcoming BNPL regulations.

Scenario Traditional Approach PayPoint's Real-Time Approach
Remortgaging 3 months of manual statement reviews; 3-to-4-week timeline Automated transaction analysis; decisions in minutes.
BNPL Purchase Limited, single-provider view; delayed visibility. Multi-provider visibility; instant cumulative exposure checks.
Energy Support Reactive checks based on rigid benefit categories. Proactive identification of income drops and financial stress.

 

The common thread: Each scenario demonstrates how real-time data enables faster, more accurate decisions based on actual financial behaviour rather than estimates.

Powering Decisions with Open Banking

To bridge the data gap, PayPoint leverages Open Banking infrastructure to turn "transaction noise" into clear affordability signals.  Our solution provides:

 

  • Total Visibility: Identifying undeclared direct debits, payday loans, and overdraft reliance.

  • Income Verification: Confirming the regularity of earnings, essential for the growing gig economy.

  • Categorisation: Using machine learning to process the 150+ monthly transactions the average consumer.

Laptop screen showing data and graphs

 

Moving Toward Financial Inclusion

Better data doesn't just manage risk, it expands access. By looking at actual financial management rather than a "thin" credit file, lenders can confidently support creditworthy customers who might otherwise be unfairly rejected.


Ready to modernise your affordability journey? Contact our team to see how real-time data can transform your decision-making.

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