Edinburgh-based DirectID, a global credit and risk platform, has announced a strategic partnership with Smoothpay, a fintech startup which caters to freelance workers. 

The partnership aims to use DirectID’s open banking platform to help freelancers, contractors, and small business owners receive reliable monthly income. 

Smoothpay is a London-based startup that offers those under precarious work arrangements such as freelancers or gig-economy workers financial stability by analysing historical income data to provide a consistent source of income.

This partnership heralds a significant effort towards financial inclusion and increased financial security for the 7.25 million gig economy workers, nearly 2 million freelancers, and 5.5 million small business owners in the UK. 

DirectID has an open banking powered income verification tool which interprets income patterns of irregularly paid workers. When Smoothpay accesses users’ financial data, it can use DirectID’s open banking technology to interpret 12 months of customer earnings, which allows them to be onboarded to the service immediately. 

Open banking is a system that allows financial institutions to share customer data with third-party providers through standardised APIs. This helps banks and third party providers share data safely and efficiently, in a bit to help individuals access financial products while maintaining control of their personal data. 

Creating a seamless onboarding process is a goal Henry Oakes, founder of Smoothpay, has been trying to achieve since he created the app last year. “We wanted our customers to find out their Smoothpay within a minute or so of signing up – and we’ve managed to achieve this with minimal fuss by integrating DirectID into the app,” he said. 

Recommended

• DIGIT Movers and Shakers | April 2023
• Comment: Digital Skills and Access Key to Getting More Women in Tech
• New Study Reveals Cost of Vulnerable Software Supply Chains

Direct ID is a credit and risk platform which uses open finance and bank statement data to enable smarter credit risk decisions. Commenting on the potential of open banking supporting workers without traditional salaries, Clare McCaffery from DirectID said: “The world of work has transformed in recent years, and this is an incredible opportunity to use open banking to support those without a traditional salary for the first time.”