Visa and Nordic fintech leader Froda unveil the world’s first instant push payment solution for the SME loan market

Access to finance has long been a major obstacle for companies looking for growth. Against this backdrop, Visa, Froda and Lunar are announcing a global partnership and launching a new, innovative technology that aims to solve these problems – for good. The product, which for the first time uses push payment functionality for financing, aims to reduce transaction time to mere seconds. Normally, this process would take months.

The fintech company Froda has entered into a partnership with Visa to develop a completely new loan solution for businesses. In the first instance, Froda and Visa are teaming up with the Nordic digital bank Lunar. As part of the partnership, Lunar’s customers gain access to business loans through Froda’s proprietary built-in lending platform, with direct payments and repayments via Visa’s card. Visa’s presence in over 200 countries and territories provides a consistent experience regardless of market, making the product globally scalable.

“I am thrilled to announce our partnership with Visa and Lunar to bring a new level of convenience and efficiency to the world of business lending for SMEs. Our goal was to create a new ecosystem in embedded lending that would provide entrepreneurs with easy access to funding and instant payouts. With Visa’s support, we are able to offer this innovative solution to both new and established banks across multiple markets. We couldn’t be more excited about this partnership and look forward to seeing this new ecosystem grow” says Olle Lundin, CEO of Froda.

At a time when the economy is facing headwinds, access to finance becomes even more important for startups and small businesses looking to invest for the future. In order to support SMEs in the best possible way, it is crucial to find new ways to efficiently distribute SME funding. The solution aims to remove barriers by allowing repayment and disbursement of loans to take place directly through a payment card. Customers repay their loans through recurring card payments without having to track and manage monthly invoices.

“At Visa, we are constantly looking for new innovative ways to exploit the use of card infrastructure. The solution Froda has developed adds something new to the built-in lending ecosystem. We are very excited to be a part of this and look forward to seeing the impact it will have on small business lending.” says Philip Konopik, Regional Managing Director Nordics & Baltics at Visa.

“By using Visa’s infrastructure, the solution provides a consistent experience for customers regardless of market, without the need for adjustments to local invoicing and direct debit processes. Collaboration with card issuers will provide a source of transactional data to improve credit scoring and the ability to present accurately pre-scored available credit to customers. It is a fantastic opportunity to be part of this collaboration as it allows us to offer our customers a fully digital experience with card registration as part of the loan application process. This eliminates the need for separate registration for direct debit solutions or obtaining details for invoicing. In addition, the ability to make immediate loan disbursements through push payments ensures that our customers can access the financing they need quickly and efficiently.” says Mats Persson Bergius, general manager, Sweden, at Lunar.

The built-in lending solution will be available to Lunar’s customers in Q2 2023, with the possibility of more SMB card issuers joining.