Tappily line of credit review

Tappily gave you ongoing access to an agreed amount of credit you could draw on at any time – by transferring money to your current account. Tappily only charged you when you borrowed, so it was a free facility when you were not borrowing. Tappily was launched in 2017 as a sister company to SafetyNet Credit (which also offered a revolving credit service).

To apply for a Tappily credit line, you needed to share visibility of your bank account activity with Tappily. That didn’t mean handing over your Internet banking login details. Instead, you’d be prompted to give your bank permission to share transactional information with Tappily. If you decided to do this, your bank would verify that Tappily was authorised before securely sharing your data via an API (application programming interface). Tappily would use this transactional information for four reasons, listed below.

If you got approved, you’d have quick and easy access to the credit facility.

You could borrow whenever you needed to, or you could set a trigger for Tappily to automatically deposit money into your account when you got close to your overdraft limit – which could help you avoid expensive fees. Tappily would also automatically take repayments when you had cash coming in.

Underlying Tappily’s unique approach were some relatively high rates – lower than short term, payday-style lenders but higher than most credit cards. You probably shouldn’t use Tappily for longer term borrowing, but if your bank charged extortionate rates and fees on overdrafts, the credit facility could save you money.

Tappily charged daily interest when you borrowed at a rate of 0.34% per day. That was £0.34 for every £100 borrowed. There were no other fees or charges.

For example, if you borrowed £150 for 4 days, the interest per day would be £0.51 and the total interest would be £2.04 representing 4 days at £0.51 per day.

Tappily was a direct lender and a trading name of Indigo Michael Ltd., which was authorised and regulated by the Financial Conduct Authority (FCA). You could see what activities it was allowed to get up to in the FCA’s Financial Service Register listing.

It was also a regulated third-party provider under the Open Banking Implementation Entity (OBIE). This meant that banks and building societies were required to share your transaction data with third parties such as Tappily – but only if you requested that they did so. Every 90 days, you’d be prompted to reject or allow Tappily’s ongoing visibility of your data.

Your data was securely handled in bank-level systems using 256-bit SSL encryption.

When you applied for a credit facility with Tappily, you’d be directed to your Internet banking login page to authorise your bank to share your transaction data with Tappily using Open Banking. Tappily would then use “read-only” copies of your transactions for the following reasons:

• To run affordability checks. Tappily would use information on your regular income and outgoings to assess affordability and to set an appropriate credit limit.
• To help you avoid unauthorised overdraft charges. If you chose to, you could set up a trigger so that credit was only issued if your bank balance dropped to a specified point (typically just before you go overdrawn), preventing you from incurring unauthorised overdraft charges.
• To monitor your transaction data before taking repayments. When Tappily saw money being deposited in your account that took the balance to a level that “permits recovery in accordance with your agreement”, it would take a repayment. You could also make manual repayments.
• To offer money management tools and a dashboard facility. Tappily displayed and categorised your spending – giving you the tools and insight to budget better and gain better control of your finances.

As Tappily was a regulated third party provider under the FCA and the Open Banking Implementation Entity (OBIE), your bank had to share your transaction data with Tappily if you requested it to do so. Every 90 days, you’d be prompted to revoke or extend Tappily’s visibility of your data.

Tappily didn’t lend without having access to this information, which formed part of its risk assessment process.

Yes. Like all responsible lenders, Tappily would check your credit file when weighing up your application. That didn’t necessarily mean that low credit scores were ineligible, however. In fact, Tappily was designed with these customers in mind and used additional measures, such as open banking, to find ways to approve applicants that might be rejected on credit score alone.

Tappily also reported back to credit reference agencies, so making Tappily repayments on time and in full would benefit your credit score (and missing repayments would damage it).

Tappily said that setting up a credit facility for a new customer could take up to 24 hours. Initiating and receiving a transfer from the Tappily app (or from the site) should then be fairly instant, taking at most 2 hours.

Tappily was a good alternative to traditional payday loans, working out much cheaper. It was still expensive compared to traditional personal loans, however, so it was not advisable for frequent borrowing of larger sums or borrowing over longer periods. Technically, you could borrow up to £2,500, but that would cost just under £60 per week in interest. For loans of that size, there are cheaper options on the market, provided you can get approved (use an eligibility checker to see).

Along with a handful of other strangely named new companies, Tappily was using creative innovation to offer loans to “non-standard” credit profiles in a post-payday-loan world, which was commendable. Applicants may have had to jump through a couple of extra hoops, but when this meant a significantly cheaper loan, it was worth it.