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Payments in the lending sector: the CashFlows view

Mark Cousins caught up with Mark Johnson, UK Sales Director, to find out about the lending sector's key payment challenges and how CashFlows can help

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With more than 20 lenders and platforms on its books, CashFlows is an industry-leading provider to the lending sector. So, what are the key payment challenges facing the sector, and how can CashFlows help? Mark Cousins caught up with Mark Johnson, UK Sales Director, to find out.


Mark, give us some background into the lending sector in the UK at the moment, and how CashFlows is involved on the payments side?

There are around 50,000 FCA-regulated lenders in the UK, ranging from small doorstep lenders up to large national brands. In 2016, consumer credit lending was reported to be worth more than £180 billion.

On 1st April 2014 regulation of consumer credit transferred to FCA (Financial Conduct Authority). A deadline for those with interim permissions to apply for full authorisation passed in 2016. The FCA puts great emphasis on treating customers fairly. Secondly, ensuring that lending is done responsibly. And finally, that customers can afford and use the loan sensibly.

Generally, what’s good for the end-customer, in terms of product, convenience and customer experience, is also good for the lender. At CashFlows, we understand and support that. We’re proud to provide payment services that are developed and aligned to the needs of the industry – and, naturally, the requirements of the regulator.

 

What is it exactly that makes the CashFlows' lending proposition different?

Well, I’d say the main difference is that CashFlows is not a one-size-fits-all payments processor. We also value partnership. We recognise that having strategic partnerships in place is key to our success. For the lending sector, many of these relationships already exist, giving us a firm foundation to drive significant value to consumers and lenders alike.

Our history and experience in the sector has helped us understand the entire lending value chain. As such, we make sure we address specific pain points. These include:

  • Unnecessary declines on collections
  • Difficulties with payment tracking and reconciliation
  • Chargebacks
  • Disbursements

We’re all about more right-first-time payments. This is in line with our company strapline ‘maximising payment success’. We’re pleased that a recent client who’s implemented our solution has experienced a 25% increase in collection rates.

We’ve deployed smart logic to help maximise authorisations and minimise declines. If a customer is repaying their loan soon after their salary is paid, our smart business logic sends an authorisation request at the optimum time. For example, if it’s better to go for authorisation at 2.00pm rather than at 8.00am, when we know that the card issuer will have cleared the funds into the customer’s account, then that’s what we’ll do.

We give our lending customers improved visibility of funds to aid reconciliation. They can track a payment from start to finish. That’s from authorisation right through clearing and settlement, so there are no nasty surprises. We also settle funds promptly (T+1) which improves cash flow.

Our automated exception handling pre-empts possible disputes or chargebacks before they occur. No-one wants their chargeback ratio to be higher than necessary or outside card scheme parameters. We help cut the administrative hassle of chargebacks with the associated direct and indirect costs.

It’s not just incoming payments. We can also assist with disbursements – payments out to borrowers – via card and soon via Faster Payments and Direct Debit.

 

Can you give us some examples of partners that CashFlows is working with, and how this benefits lenders?

Firstly, it’s important to say that CashFlows is agnostic. We are flexible and open to supporting customer demand to work with any gateway or platform of their choosing.

We’ve partnered with a leading financial services gateway, acquired.com, to tackle sector-specific pain points head-on. We’ve exposed extra data fields in the transaction message to allow a deeper integration at the gateway level. This powers start-to-finish payment tracking for better reconciliation. We also flow raw issuer data via the acquired.com gateway, which informs the smart logic for collections optimisation.

That’s the great thing about smart partnerships. The resulting proposition becomes greater than the sum of its parts. Our customers certainly think so.

 

Tell us more about CashFlows’ core proposition to the lending sector.

Essentially our mission is to ensure that lenders and their customers get paid online on time. We get lenders up and earning quickly through speedy onboarding and well-honed processes. We’ve made account verification, recurring billing, credit transfers and Me2Me payments an integral part of the core proposition to lenders. CashFlows can help lenders verify card validity and ensure successful transactions using our account verification service. We support AVS and CVV checks at no extra charge.

To find out more about how CashFlow’s lending solution and commercials that will put a smile on your face, contact me at mark.johnson@cashflows.com

Mark Johnson

Topics: Lending, Blogs, Press, acquiring