The first car loan fintech in Poland:GPS will calculate monthly payments

• Idea Bank Group launches a new fintech project
• Happy Miles uses GPS technology to develop pay-as-you-drive financial products
• It's the world's first 'car loan per kilometer' concept, where monthly payments vary depending on travelled distance

PLN 0.38 per kilometer? That is how a payment calculation may look like in the innovative GPS-based Happy Miles model. The exemplary rate is for a new Opel Astra travelling 20 thousand kilometers a year.

Let's imagine a sales representative at a toy company. He has a car. Unfortunately, flu or a vehicle breakdown makes it impossible for him to work for two weeks. The car is not used, business freezes. Luckily, installment also decrease significantly, protecting the company from liquidity problems.

Payment per kilometer

'Pay-as-you-drive' is the world's first car loan model where the payments are calculated in strict accordance to the travelled distance. Precise information on kilometers covered is automatically sent to one's creditor company via a GPS device installed in the vehicle. Monthly payment is the distance multiplied by a KM-based rate, plus a small fixed amount (PLN 235 in the above example).

Car loan market hungry for innovation

Happy Miles is yet another fintech project delivered by the Idea Bank Group - but the first car loan-related.

Idea Bank's executive and the brain behind the Happy Miles concept, Dominik Fajbusiewicz commented:

'We are creating an engine that might become widely popular in services associated with the financing of sales and rental of passenger cars, trucks, agricultural machinery and construction equipment. The car loan market is the first we want to introduce the new technology to. Fintech trends are quite strong in the banking sector, but the car financing services lack innovation. What is important, in Poland, due to tax regulations, a popular and economical form of car financing is leasing. It's like the market's asking us to be transformed. The acquisition of Getin Leasing, which along with Idea Leasing covers almost 15% of the car loan market in Poland, has provided us with some perfect tools to do so'.

These two companies will be the first to launch the innovative 'car loan per kilometer' service. Simultaneously the bank's been working on implementing GPS technology and the 'pay-as-you-drive' model in other industries, such as longterm car rental and insurance.

The economy of using - new model of living

The Happy Miles concept fits the newest global economic trends. They go by various names - access economy, gig economy or sharing economy, and they've laid foundation for businesses such as Netflix, Spotify, or Uber. These trends are the consequence of the changing structure of consumer behaviors and needs: people's tendency to refocus from 'having' to 'using'.

'We believe that the pay-as-you-drive model will turn the tides for many entrepreneurs. Not only it allows for adjusting financial obligations to the company's cash flow; it also brings additional benefits to having a GPS device installed in a vehicle', offers Łukasz Domański, Happy Miles PM. 'The idea of car loan per kilometer may appear especially attractive to companies owning fleets, or freight companies', he adds. The additional benefits associated with having a GPS device in a car include vehicle location and the ability to keep track of the use of fuel, speed, braking distance, acceleration parameters, driving time and drivers' working hours.

Happy Miles is yet another fintech project launched by the Idea Bank Group. The world has already heard of its Mobile ATMs and the banking/accounts platform Idea Cloud, recognized in multiple global awards programs such as the Fintech Innovation Awards, Fintech Awards or BAI-Infosys Finacle Global Banking innovation Awards.

Listed on the Warsaw Stock Exchange (WSE:IDA), Idea Bank supports Poland's dynamic entrepreneurial culture by offering its clients a 360-degree assistance on all stages of business development: from the registration of a new company with the authorities, to bookkeeping, and financial advisory in the first phases of growth.