Stockholm-based fintech startup Froda has announced a pioneering collaboration with Visa and Checkout.com that promises to revolutionize the utilization of Visa Direct. Visa Direct, a renowned processing capability enabling secure, real-time funds transfers via card credentials, has found a new application in business lending through this partnership. Froda is tapping into Visa’s robust infrastructure to offer a secure, efficient, and expeditious method for business loan payouts. This innovation aims to empower banks, neobanks, and fintechs across Europe by facilitating fast and reliable funds processing within the Froda Embedded offering.
By partnering with global payment provider Checkout.com, which grants access to Visa Direct and the Visa Token Service, Froda has eliminated the need for manual card details entry, enhancing the customer experience. The resulting real-time credit assessments, instant loan approvals, and swift disbursements further establish Visa Direct as a game-changer in the business lending landscape. This innovation, introduced in February 2023, has already been launched in the Danish market, and Visa Direct access is extended to Froda Embedded partners providing Visa Business Cards.
Visa Direct is a processing capability that allows safe, convenient and real-time funds transfers to financial accounts using card credentials. The service is used by a wide variety of businesses worldwide, but its potential for business lending has remained untapped until now. Through this partnership, Froda leverages Visa’s robust infrastructure to provide a secure, efficient and fast method of payouts for business loans.
“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,” says Olle Lundin, co-founder and CEO of Froda.
The solution is made possible through a partnership with the global payment provider, Checkout.com, which provides access to Visa Direct and the Visa Token Service, enabling the solution. Thanks to the use of tokens, end-to-end payments can be processed without requiring manual entry of card details. This improves the customer experience by providing easy card usage. Visa Direct access is offered to Froda Embedded partners that are providers of Visa Business Cards.
“We are excited to be a part of this innovative card-based embedded lending product for SMEs. 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,” says Adel Naamneh, VP Global Strategic Solutions, at Checkout.com.
Unlike traditional lending methods that typically rely on bank transfers for payouts, Visa Direct utilizes push payment functionality where funds are transferred between accounts directly through Visa’s extensive card network. The advantages of leveraging Visa Direct for business loans are numerous. 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 as well, significantly reducing the time from application to payout. Moreover, Visa Direct works the same way regardless of market. Making it possible for connected partners to scale their financing offering without having to implement new direct debit solutions.
“We are thrilled to be a part of this pioneering initiative together with Froda and Checkout.com. Through this, 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.
The product card-based embedded lending was introduced in February 2023 and launched on the Danish market in June the same year together with the digital bank Lunar. Visa Direct access is offered to Froda Embedded partners that are providers of Visa Business Cards.
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