Hoping to enable more seamless payouts and repayments for businesses across Europe, Swedish fintech Froda has joined forces with global payment providers Visa and Checkout.com to introduce push-payment functionality for business lending.
Froda has revealed plans to utilise Visa Direct: a processing capability that enables real-time funds transfers to financial accounts using card credentials. While a range of businesses from across the globe currently use Visa Direct, its business lending potential was previously unexplored.
Through this partnership, Froda will now leverage Visa’s infrastructure to provide a secure, efficient and fast method of payouts for business loans.
Unlike traditional lending methods that rely on bank transfers for payouts, Visa Direct utilises push payment functionality. This means funds are transferred between accounts directly through Visa’s extensive card network.
Through an automated real-time credit assessment process, Froda can offer instant loan approvals. Visa Direct makes it possible to send real-time loan disbursements, significantly reducing the time from application to payout. Visa Direct also enables connected partners to scale their financing offerings without having to implement new direct debit solutions.
Olle Lundin, co-founder and CEO of Froda, discussed the importance of the business lending solution: “We are excited to establish this partnership with Visa and Checkout.com that is going to strengthen our Froda Embedded offering and empower banks, neobanks and fintechs across Europe to offer financing with fast and reliable funds processing.
“With access to Visa Direct, we are able to further streamline the lending process and offer a seamless experience across markets.”
Setting a new standard for business lending
The new business lending solution was made possible through a partnership with Checkout.com, which provided access to Visa Direct and the Visa Token Service. By using tokens, Froda can process end-to-end payments without the need for manual entry of card details – providing easy card usage to improve the customer experience.
Philip Konopik, regional managing director at Visa in the Nordics and Baltics, added: “Through this partnership, we are introducing a new transaction type that is only available through Visa cards. I believe that this is going to set a new standard for business lending for our clients, allowing them to empower businesses across Europe to grow and thrive, says Philip Konopik, Regional Managing Director at Visa in the Nordics and Baltics.”
Adel Naamneh, VP of global strategic solutions at Checkout.com, also commented: “At Checkout.com, we are constantly looking for new innovative partnerships, products, and ways to solve complex challenges by leveraging payments. This partnership is definitely the stepping stone for the future of payments and embedded lending.”