FinTech: European Businesses Get Loans Paid Faster Via Three-Way Collaboration Between Froda, Visa, And Checkout.com
Visa Direct will be the conduit for Froda loan payments to businesses.
Froda, a rapidly growing fintech based in Sweden, has entered into a transformative partnership with Visa (NYSE: V) and Checkout.com, heralding a new era for Visa Direct. This collaboration introduces innovative push-payment capabilities for business loans, paving the way for effortless transactions for European businesses.
Visa Direct, known for enabling secure and real-time fund transfers to financial accounts using card credentials, has expanded its horizons through this partnership. Froda leverages Visa’s robust infrastructure to facilitate secure and speedy payouts for business loans, catering to banks, neobanks, and fintechs across Europe.
Olle Lundin, co-founder and CEO of Froda, said the partnership would bolster the Froda Embedded product and offer streamlined financing solutions across markets.
Checkout.com, the global payment provider partnering in this initiative, provides access to Visa Direct and the Visa Token Service, allowing end-to-end payments without manual card details entry. This enhances the customer experience by simplifying card usage for Visa Business Card providers.
Unlike traditional bank transfers for loan payouts, Visa Direct employs push payment functionality, enabling direct fund transfers through Visa’s extensive card network. This approach accelerates loan approvals through automated real-time credit assessments at Froda and facilitates real-time loan disbursements, reducing the time from application to payout.
Importantly, it offers a consistent solution across markets, allowing partners to scale their financing offerings without implementing new direct debit solutions.
According to Philip Konopik, Regional Managing Director at Visa in the Nordics and Baltics, this initiative could potentially set a new standard for business lending, empowering European businesses to flourish.
This card-based embedded lending product was introduced in February 2023 and launched in Denmark in June, in partnership with digital bank Lunar. Visa Direct access is extended to Froda Embedded partners providing Visa Business Cards, enhancing their financing capabilities.
Froda, established in 2015, aims to level the playing field for small and medium-sized businesses by digitizing and simplifying the financing process, making it more accessible and affordable. With strong international growth plans, the fintech is looking to revolutionize the banking experience for entrepreneurs.
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