Pagaya Technologies, the Israeli-American fintech firm, has broadened its partnership with Upgrade Inc. to include buy now, pay later (BNPL) products, the companies announced today. The collaboration will leverage Pagaya's artificial intelligence-powered credit decisioning platform to underwrite BNPL loans originated through Upgrade's consumer lending channels.
The deal marks a significant pivot for both firms into the fast-growing BNPL space, which has seen explosive adoption among UK shoppers. Pagaya already provides credit analytics for Upgrade's personal loan and credit card offerings. Under the expanded agreement, the same technology will now assess risk for short-term, interest-free instalment loans that typify BNPL products.
Upgrade, founded by former Lending Club CEO Renaud Laplanche, has built a sizable US consumer lending business. The partnership with Pagaya allows it to scale BNPL offerings without taking on disproportionate credit risk. Pagaya's models analyse thousands of data points to predict borrower behaviour, a capability increasingly sought after by lenders navigating economic uncertainty.
The expansion comes as the UK government moves closer to regulating the BNPL sector. The Treasury confirmed last year that it would bring BNPL products under Financial Conduct Authority oversight, following a review that raised concerns about consumer debt and lack of affordability checks. Industry analysts say partnerships like this one may help lenders demonstrate robust risk management ahead of the new rules.
For UK investors, the deal underscores the growing convergence between traditional consumer credit and fintech-driven lending models. While neither Pagaya nor Upgrade has disclosed specific financial terms, the partnership signals confidence in BNPL's long-term viability despite rising interest rates and pressure on household budgets. Source: Pagaya Technologies press release.