Lakshithe Wagalath, co-founder and chief operating officer at Elfin Market, introduces the platform’s latest, innovative product launch
Elfin Market has a mission – to make credit cards more affordable for all, while allowing retail investors to access the UK’s £70bn credit card market. The platform has already disrupted the credit card market with the Elfin Purse – a unique service which offers a credit line to borrowers, who can then make withdrawals as needed, before repaying the money on a monthly schedule.
Now, Elfin Market is set to make history by becoming the first peer-to-peer lender to launch a physical credit card later this year, along with an iOS and Android-ready app.
“We’re currently finalising the development and testing of both our mobile application and the Elfin Card,” says Lakshithe Wagalath, co-founder and chief operating officer at Elfin Market. “But we’ve decided to wait for the right moment to release them to the public.
“At the moment, we are targeting a release in September 2020, but this can be earlier or later depending on the latest Covid-19related developments.
“We believe the launch of the Elfin Card will be a game-changer for all our customers, both borrowers and lenders.”
The Elfin Card can be used just like any credit card, with payments coming directly from the Elfin Purse. Borrowers will still be able to make online withdrawals to their bank accounts if they wish, and the representative APR will be the same regardless of whether the withdrawal has been made via the online platform, the app, or the credit card.
“Our goal is to make the Elfin Card the natural replacement for traditional credit cards which are costly and unfair,” says Wagalath, citing the 24.7 per cent average APR and hidden fees which are typical among most credit cards, as well as the artificially long repayment schedules which most borrowers are subject to.
By contrast, Elfin charges a representative APR of 5.8 per cent to its borrowers (although average APR over the platform is typically in the 10 – 12 per cent range), with a flexible repayment model that encourages borrowers to pay off their debts early. Additionally, the app will enable both borrowers and lenders to check their account and make transactions on the go.
For investors, the benefits are equally clear. The UK’s credit card market is vast, yet largely inaccessible to retail investors.
“The launch of the Elfin Card will enable lenders to gain exposure to credit card-type debt, as the money they invest on the platform will be lent to borrowers who will be using it in the same way they would use funds on their credit cards,” says Wagalath. “We believe this is significantly different to investments in other P2P lending platforms which, so far, give exposure to regular consumer loans or business loans.”
Target returns for Elfin’s investors currently range from 3.8 per cent to 5.8 per cent, depending on the maturity of their investments, but so far the platform has been able to distribute between eight per cent and 12 per cent to investors, thanks to lower-than-expected defaults and arrears. With these new product launches, Elfin Market may be giving us a glimpse of the future of P2P lending.