Hi all, Rory here. I’m an Account Executive at Orum.
A few weeks ago, I was able to attend the LendIt conference in New York with a few members of our team. We’ve attended a number of conferences, and I was super impressed with how well this one was run. Whether it be their app, breakout seminars or the “speed dating” style networking, it was easy to meet people and have great conversations. Speaking of conversations, there was a key takeaway that I wanted to dive into.
The Need for Fast Money Movement
Our conversations focused around money movement, and we saw that quick access to money and fast money movement was a theme across many verticals, yet adoption thus far has been mixed. Make no mistake though, in the age of Venmo and Cash App, there is an expectation now more than ever to be able to “get funds now.” Users are also often willing to pay a nominal fee for the instant access.
One data point that stood out came from the leadership team at Fiserv. Their Clover ecosystem offers instant deposits for a nominal fee, and the company shared that the majority of the SMBs they serve, around 75%, trigger such payouts.
This suggests that the lengthy payout schedule of a standard merchant service offering is inadequately serving small businesses from a cash flow perspective.
Other speakers shared the assessment that “Gen Z expects real time” and that this is a key feature to not just differentiate your service, but to simply “not be left behind.”
When one breakout room of 60 fintech professionals was asked if their company had rolled out instant payments yet, less than 4 participants raised their hands, suggesting that there is substantial room for increased adoption. Additionally, awareness of the RTP (Real Time Payment) network was low across the dozens of conversations we had with lenders. The multi-business day schedule of the ACH system founded in 1972 seems to still be the de facto baseline for many in the space. Further, in terms of actual integration to RTP, it is still early days for most.
It’s exciting to think about how much of an impact Orum can have on these business models and the way consumers interact with the platforms. Whether managing the cash flow of the business or helping consumers get access to the loans that they’ve been approved for in minutes, Orum can help.
In the hyper competitive online lending space, we heard that 24/7 loan approval is a key differentiator over brick and mortar institutions.
However, this is somewhat contradictory to the fact that few of these providers are actually able to disburse said funds faster than “next business day” at best. Of the few providers that we spoke with who did have instant payouts, most were using costly card debit rails to fund a physical or virtual debit card. To realize the savings of the RTP network (charged in cents, not percentage points) would be far more economical for the majority of these lenders at scale.
All in all, we were thrilled to attend and learn about the latest in the industry! We look forward to attending again next year and making even more great connections with many players in the space.