Buddy Payment successfully obtains PSD2 license, supported by Enigma Consulting
Buddy is a Dutch fintech that focuses on supporting financially vulnerable citizens. This week Buddy received a PSD2 license from the Dutch supervisor De Nederlandsche Bank (DNB). With this license for Account Information Service Provider (AISP), Buddy can access transaction data and help needy people to prevent financial difficulties and recover from debts. Buddy does so by actively budgeting, assessing possibilities for governmental support and ensures that fixed costs are always paid.
This is the first time that a social fintech has received a PSD2 license in the Netherlands. During the whole period of preparation and documentation, Buddy has been supported by Maarten van Denzen, Senior Legal Consultant at Enigma Consulting.
Maarten: “Buddy was one of the first parties applying for a PSD2 license in the Netherlands. Although becoming a payment institution is not easy, especially for a small start-up, without banking connections and managed by young people, I am proud to say that we made it. To work pro-actively together with the motivated people of Buddy and at the same time keeping DNB aligned, really shows that everything is possible. I am really looking forward to continue our cooperation as Risk & Compliance officer of Buddy Payment.”
Budgeting and prioritizing
The Buddy app was originally a product of eight Dutch municipalities, Buddy Payment and Rabobank. Buddy intends to improve the debt position of vulnerable Dutch people and, where possible, to prevent them from ending up in such a situation. Based on payment data, the app makes an overview of someone’s fixed costs and the amount that can be freely spent per period. The app can also automatically send messages to authorities to prevent additional tax assessments, for example, in the event of late payment or incorrect payments. It is precisely the latter that regularly causes further problems to the problems that already exist.
In addition to prioritizing the payment of fixed costs, Buddy uses access to the payment data to estimate the income. Based on this, the system assesses whether someone is entitled to allowances for, for example, rent, care, or childcare. A small increase in income sometimes leads to someone falling just above a specific limit and losing the right to the allowance. Those who find out too late can get into serious financial difficulties.
Licenses are opening doors
Things went quickly after a pilot in eight municipalities. Currently, 89 municipalities are involved in a tender for a financial assistance application in which Buddy Payment is participating. The company looks forward to the near future with a healthy dose of nervousness: “It was a complex process because, as a start-up, we had to build everything from scratch. Now that we have the license, we can finally get started.” said CEO and co-founder Camiel Kuiper.
Together with Enigma Consulting the Buddy-team is now starting to focus on the second PSD2-license they want to get from DNB. With the additional PISP-license, Buddy Payment can initiate transactions on behalf of their users. “This way, we can provide in actions and services to make banking a seamless experience without any stress involved. Our goal is for our users to be financially stable and building up savings for a rainy day. We want to thank the entire Enigma-team for their hard work and knowledge in the field of licensing applications in the financial industry.”