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What Is a Faster Payment?

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What Is a Faster Payment

Faster Payments is a UK banking initiative that enables mobile, internet, and telephone payments to move between customer accounts, usually within a few seconds. Almost all internet and telephone banking payments in the UK are processed through the Faster Payments Service (FPS)

In 2019 alone, the initiative processed 2.4 billion transactions worth £1.9 trillion. With 35 directly connected participant organizations and 400 financial institutions supporting the service, Faster Payments is available to more than 52 million current account holders in the UK. 

Usually, Faster Payments arrive instantly but can take up to two hours, depending on the service provider. A real-time payment can be made and received 24/7, including bank holidays. Delays may occur if the other bank or building society is not a participant of the Faster Payments Service or if there is confusion over the sender’s identity and additional security checks are needed. 

How Faster Payment works

How Faster Payment works. Source: Faster Payments

It is possible to send up to £250 thousand using an FPS transfer, but individual banks and building societies may have their own thresholds and limitations in place for personal and corporate customers. For transfers over the limit, customers need to use Bacs

Faster vs. Bacs payments

Bacs is an older UK payment system founded in 1968. Bacs payments are transferred directly from one bank account to another, usually taking three working days to clear. Organizations widely use Bacs payments as it allows them to transfer amounts over the £250 thousand faster payments limit. 

How to connect Faster Payments

If you are considering providing real-time payments to your customers, Faster Payments Service outlines the following ways to connect: 

Directly Connected Settling Participants (DCSPs) – connect directly into the Faster Payments Central Infrastructure to send and receive payments in real-time, 24 hours a day. DCSPs set their own transaction limits and perform their own settlement with the Bank of England. 

Connecting to Faster Payments Service as a DCSP provides the fastest service, but it is limited to organizations that handle a high volume of payments and are eligible to open a settlement account at the Bank of England. This option requires a significant investment to build a direct gateway, hire technical experts to implement it, and adhere to initial and ongoing compliance obligations. 

Directly Connected Non-Settling Participants (DCNSPs) – connect directly into the Faster Payments Central Infrastructure via a sponsoring Participant that performs Bank of England settlement on the PSP’s behalf. 

Companies that are not eligible to open a settlement account at the Bank of England can connect as a DCNSP, but most transactions will take from seconds to several hours because of additional relays. Companies operating as DCNSPs report high transaction costs and more outages as directly connected participants are prioritized. 

Indirect Agency – This option enables a PSP to connect to Faster Payments via a sponsoring Participant, which manages the direct connection on its behalf. Sponsoring Participants provide various options to send and receive Faster Payments, and also perform Bank of England Settlement on the Indirect Agency PSP’s behalf. This option is beneficial for PSPs that find a direct connection is not commercially viable.

FinTechs, smaller banks, and institutions can use the Indirect Agency model to access Faster Payments with APIs without the need for scheme approval. This option provides real-time payments without sacrificing speed and resources. 

With a quality core payments software provider and the Indirect Agency model, financial institutions can connect to the Faster Payments Service without long and costly development cycles. SDK.finance, a global core payments software provider, enables companies of all sizes to launch their real-time payment products with ease. 

Contact the SDK.finance team directly to learn more about what type of banking software will be perfect for your business needs.

The list of SDK.finance solutions includes Digital Retail Bank, Microsoft Power BI payment dashboards, Voice Banking, Money Transfer, Currency exchange, Wallet Engine, and Event Payments.

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Source: https://sdk.finance/what-is-a-faster-payment/

Fintech

MoneyMe accelerates lending and revenue

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MoneyMe outperforms originations run rate with $108m originations, revenue of $15m and exceeds $230m in gross loan receivables with strong loan unit economics.

Clayton Howes, Managing Director and CEO of MME said, “We are incredibly pleased to report the growth and momentum the business is achieving, with increasing revenues and another set of records in originations and customer receivables. Our business is accelerating with the credit quality of our customers increasing and it is fantastic to see the strong take-up of our recently launched products by our customers and merchants. Another great quarter for the business as it delivers on its strategy to build returns through innovation, scale and technology.”

Record Originations & Gross Customer Receivables 

MoneyMe’s originations in Q3 FY21 of $108m, ($51m, Q3 FY20), reflects continued acceleration in originations growth of 57% on Q2 FY21, beating a previous record ($69m). Gross customer receivables of $233m, up 63% on pcp ($143m, Q3 FY20) with growth from the existing Personal Loan and Freestyle products as well as the momentum from the more recently added MoneyMe+ and ListReady products.

The accelerated growth contrasts to relative flat growth within the consumer credit market, reflecting the Group’s ability to attract customers from incumbent consumer credit providers with its Generation Now suite of offers.

Record Revenue & Increasing Returns 

Q3 FY21 revenue was $15m ($12m, Q2 FY21) with Q4 FY21 contracted revenue increasing to over $19m. Returns are robust with revenue yield at 29% (32%, 1H FY21) and the average receivable term increased to 35 months (32 months, Q2 FY21).

Increasing operating leverage and cost efficiencies

Funding costs to Q3 FY21 reduced to 6% (9%, 1H FY21) as the Group continues to leverage its bank warehouse facility. The Group is confident in its funding program to support the growth with an unrestricted cash balance of above $11m at 13 April 2021. The Group achieved a further reduction in its core operating costs margin6 to 9% in Q3 FY21 (12%, 1H FY21).

FY21 Gross customer receivables are expected to exceed $265m ($133m FY20).

Strong Credit & Book Quality 

The Group is continuing to deliver strong credit book quality with the average Equifax score increasing further to 644 in Q3 FY21 (638, Q2 FY21). COVID-19 hardship payment plan deferrals continue to be insignificant, reducing to 0.1% of gross receivables at Q3 FY21 (0.4% at 1H FY21). Q3 FY21 net charge-offs were stable at 4% (4%, Q2 FY21).

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Source: https://australianfintech.com.au/moneyme-accelerates-lending-and-revenue/

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How Bizcap helped to fund fitness

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‘Pivoting’ may have been the buzzword of COVID-19, but it’s exactly what Anthony from A1 Fitness Supplies in Victoria did – with the help of some cashflow capital from Bizcap.

COVID-19 threw the world into chaos – many of us were working from home, the tourism industry was on its knees, hospitality was at the mercy of square-metre rules, and the fitness sector was pivoting left, right and centre with gym closures and restrictions on class sizes.

For A1 Fitness Supplies, which provides commercial-grade equipment to gyms across Australia, COVID could have spelled disaster.

Rather than shrugging his shoulders in disappointment, owner Anthony Scarcella spotted a business opportunity – however, he needed to find some capital to make it happen.

Commercial-grade equipment at home

For people who are accustomed to working out at a gym, traditional domestic gym equipment just won’t cut it.

“Everybody training at the gym is used to training on at least light commercial, semi-commercial or full commercial units. They’re not going to go from squatting from a full-power cage in a gym to a full domestic unit, which is probably going to bend and flex due to what they’re used to lifting in the gym,” Anthony explains.

Consequently, Anthony decided to bring light commercial-grade equipment to domestic customers. The challenge was financing the purchase of stock.

That’s where Bruno Lima, his Bizcap customer Loan Specialist stepped in.

“I gave Bizcap a call and spoke to Bruno – he did a couple of calculations and came back with an offer the same day,” Anthony explains.

Since his first cashflow loan in May, Anthony has returned to Bizcap a further two times, securing a total of $75,000 to invest into his business.

“In total, we ordered 16 containers out of China and only half of them have managed to arrive. So there’s another eight still to arrive, and they will be spread out between February, March and April.”

Quick funding enables A1 to seize the opportunity

For Anthony, working with Bizcap was a great experience that enabled him to quickly access the funds he needed to take advantage of the opportunity that presented itself.

“I find [Bizcap] far easier to deal with than traditional banks, and the funds come in a lot quicker, which means I’m able to get my stock in a lot quicker, I’m able to service my customers as quick as I possibly can if COVID doesn’t interrupt or disrupt, and I’m able to get my turnover in.”

While gyms have reopened, people have still become accustomed to working out at home.

“It looks like we need to do another two orders of full containers, so that’s going to spread out to May, June, July. Our year’s already solid,” Anthony says.

Thanks to the investment Bizcap provided, Anthony was able to maximise the opportunity.

“We needed to act quickly, and Bizcap helped with that,” he says. “The paperwork is minimal – and, in business, time is money.

“As a result, we were able to triple our turnover.”

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Source: https://australianfintech.com.au/how-bizcap-helped-to-fund-fitness/

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HashChing acquires Mystro to further expand its offering to mortgage brokers

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Australia’s leading mortgage broker platform HashChing today announced it has acquired document automation and data collection company Mystro. The acquisition follows a successful period of growth for HashChing and will help to expand its service offering to mortgage brokers.

Whilst a booming property market is predicted to continue in 2021, there is also significant consolidation in the mortgage broking market with a broader shift to online/digital channels, due to the global pandemic. This is presenting a considerable challenge to mortgage brokers who need to compete with both direct bank and non-bank lenders as well as other brokers, all whilst having significantly fewer resources to spend on marketing and sales technology.

Over 1,500 mortgage brokers across Australia already utilise Mystro to streamline their document management, client data collection and loan applications. For the 2021 financial year, Mystro has processed $28 billion in loan applications. The strategic acquisition announced today will allow many more to take advantage of both technology platforms and help level the playing field for independent brokers.

CEO of HashChing Arun Maharaj said the company was committed to providing the best possible resources for brokers to be successful, and the acquisition was the natural next step in this process.

“As Australia’s leading mortgage broker and digital loans platform, we are thrilled with the opportunity that this acquisition will bring to mortgage brokers. It’s our mission to help brokers deliver great customer experiences, and we know from our conversations that they’re busier than ever before. The way they interact with customers has drastically changed over the past 12 months, and digital productivity is a big part of broker success. That’s one of the key reasons why HashChing has acquired Mystro – its laser focus on eliminating repetitive tasks and streamlining digital processes is a perfect fit with HashChing’s mission to give brokers a one-stop-shop tool for productivity and profit.”

“With the industry changing at a rapid pace, HashChing has been quick to implement strategies and provide the necessary resources for mortgage professionals to resume business as usual. At our core, we offer choice; choice to our borrowers to access better deals, and choice to our brokers to engage with clients through technology and to diversify their income in the most productive way for them. I’m very much looking forward to working with the team at Mystro to make this a successful operation for all involved,” said Mr Maharaj.

Dmitry Chourpo, Founder of Mystro, said, “We developed Mystro to eliminate manual, repetitive tasks and help our customers focus more of their time and energy on what really matters. Through this acquisition, Mystro will retain the industry-leading team and brand but will now also be able to utilise the resources of the HashChing team, who share our vision in supporting brokers and look forward to creating a seamless, innovative broker platform together.”

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Source: https://australianfintech.com.au/hashching-acquires-mystro-to-further-expand-its-offering-to-mortgage-brokers/

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Fintech offers brokers better commissions after BID

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Nodifi, one of the rising names in the asset finance space, are to offer a new bespoke product for brokers that can help them to navigate the new Best Interests Duty (BID) regulations that have been in force since the start of 2021.

It represents a concerted effort to bring brokers back to asset finance after many departed the space due to the new rules, which reduced commissions for brokers and dissuaded many from engaging with consumer-facing asset work.

“It allows brokers to set fixed rates for consumer asset finance,” said Alex Ventura of Nodifi of the new product. “The reason that they might want to do that is because of the new BID regulations: when they were introduced, it meant that brokers had to dial down rates to the base rates as that is in the best interest of the consumers. When they do that, they don’t earn a commission on it.”

“There has been a big grey area around consumer asset finance so to overcome that, we’ve introduced a new update to the platform that has set fixed rates so brokers don’t have to worry about it because the commission is already inclusive in what that has been dialled up to. That’s the main benefit.”

To read more, please click on the link below…

Source: Fintech offers brokers better commissions after BID

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Source: https://australianfintech.com.au/fintech-offers-brokers-better-commissions-after-bid/

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