The world is fast becoming ‘on-demand’ and ‘digital’, with consumers increasingly expecting to get what they want almost instantly, 24/7, with the click of a button.
The proliferation of fintech innovation, coupled by the disruption to traditional business models as a result of the COVID-19 pandemic, are also major contributors of acceleration towards faster, digital payments.
For businesses looking to disburse payments quickly, the ability to issue cards instantly, on-demand with funds readily available is a game changer today, but will quickly become the new normal.
At Novatti, we call this solution Real Time Funding – a way in which businesses can deliver exceptional user experiences that were not possible just a few years ago.
What is Real Time Funding?
Real Time Funding is a Novatti solution which allows an account to be funded and payments to be automatically authorised in real time, using “zero-balance cards” linked to a managed ledger and account.
Typically, prepaid cards will need to carry a balance before you can start using them, which means you will need to pre-load funds – a process that may take 1-2 business days to appear on your account.
With Real Time Funding, you can authorise payments and fund accounts in a matter of seconds.
How it works is that the company will issue prepaid Visa cards with a zero balance to their customers, which can be used instantly. When a transaction takes place, authorisation request is firstly passed via Visa to Novatti as the Issuer. Novatti reviews the authorisation request real time based on customisable spend controls, then forwards it to a Ledger (Novatti or a Client) for review and response.
Real Time Funding can be set up in two different ways:
1. Novatti Managed Ledger – The Novatti Ledger applies spend controls to make authorisation decisions.
2. External Client Ledger – The Novatti platform applies spend controls to make authorisation reviews and forwards funding requests to the Client Ledger to make funding decisions.
If the transaction is approved, then the funds are released from the Client or Novatti Ledger on settlement. Real-time notifications can also be set up to alert the company and customers.
What types of spend controls can you set?
Spend controls can be put in place by the company to:
1. Block spending on certain types of merchant categories e.g. alcohol & gambling.
2. Limit spending on certain types of merchant categories e.g. $100 a week.
3. Block the use of ATMs for cash withdrawals.
What are the benefits?
Real Time Funding provides a plethora of benefits for fintechs, corporations and merchants issuing these types of payments. Benefits include:
- Operating as a more agile and efficient business, as transactions can be automatically approved or denied based on your own business logic or spending rules.
- Implementing instant payouts, enhancing cardholder (customer, employee or supplier) experience.
- Improving cash flow and free up capital.
- Creating efficiencies for a corporate finance department as they only manage one main account instead of multiple accounts.
- Accessing a real-time view of cash flow, which simplifies reporting and forecasting.
- Extracting data on cardholder spending and behaviours which can be translated into customer insights and strategic decisions.
- Lowering the risks of fraud as funds are only used as intended.
What are some industry use cases?
- Fintechs, such as BNPL providers, Cryptocurrency companies and Challenger Banks
- Online platforms that services Gig Workers
- Government and NDIS agencies for emergency relief and welfare programs
- Transport & Logistics companies for driver and supplier payments
- Financial Services companies for instant payout and reimbursement
- Retail & eCommerce merchants for instant payments and rewards
If you would like to learn about how Real Time Funding can help advance your business, get in touch with us to review your payment ideas and needs.
