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Data for today’s episode is provided by Mercator Advisory Group’s report – Credit Card Lenders: Hone Strategies and Do Not Let Fintechs Scare You.
The rise of Marketplace Lending:
- Marketplace lending connects those seeking to borrow money with investors through online platforms
- A marketplace loan requires equal installment payments over a prescribed term
- Goldman Sachs projects marketplace loans to capture $386 billion in lending by 2025
- Marketplace loans were formed while the Fed held interest rates at 3.5% and have not seen a full economic cycle
- In 2017, marketplace lenders overtook banks in the percentage of total stallment lending in the U.S.
About Report
Marketplace lenders and non-bank point-of-sale finance lenders are not likely to disrupt the course of credit card lending.
Marketplace lenders now dominate the installment loan industry, a segment previously dominated by banks. Loan options are appearing everywhere, but fintechs are simply repackaging old lending products for loans and point-of-sale finance. Credit card issuers should focus on their products’ benefits rather allowing these aspiring disrupters to change the playing field.