Why We’re Leading a Real-Time Money Movement

BY Katie Posocco

| June 29, 2021

Everyone deserves financial access that’s smart, instant, and fully automated.

Money may make the world go round, but the payment networks that move close to $62 trillion a year in the U.S. haven’t kept up with the pace of our on-demand economy.

Today, you can order groceries on an app and have them delivered to your doorstep within an hour. But it can still take three to five days to transfer your own money between bank accounts and gain full access to capital—a lack of liquidity that stymies both personal and professional growth.

Orum’s changing that. 

We’re providing data-driven, proprietary intelligence and embeddable financial infrastructure that takes the friction out of our current payment systems, giving consumers and businesses greater control over their finances.

 

The road to Orum

As a CERTIFIED FINANCIAL PLANNER™ professional at LearnVest, Orum’s founder and CEO Stephany Kirkpatrick gained a deep understanding of the money-management pain points consumers experience every day. The most pressing issue? Money moves slowly—even when it’s already yours.

The problem lies in the outdated infrastructure at the heart of many U.S. payment rails. For decades, financial institutions have just worked around it by implementing quick-fix solutions like payday advances.

Money movement doesn’t need a bandaid—it needs a remodel.

We launched Orum in 2019 to address the problem at its roots, enabling businesses and consumers to reimagine how they send, receive, and access their money.

 

How (slowly) money moves

When most people think of financial transactions, they think of handing cash over a retail counter or making an online purchase with a credit card—payments that are verified and settled instantly.

The reality is, most money in the U.S. moves through Automated Clearing House (ACH) rails, including common electronic transfers like direct deposits, automated bill payments, and retirement contributions.

In 2020, the ACH Network processed close to 30 billion transactions and moved almost $62 trillion between bank accounts, and its volume is set to increase by an average of 1 billion transactions per year.

Historically, the ACH Network has lacked the ability to verify account balances in real-time, requiring data to be passed between several stakeholders to mitigate risk—with mandatory holds enforced in the meantime.

These delays mean it typically takes about three to five days for a transfer to clear.

 

The cost to consumers

Until now, we’ve accepted multi-day payment processing times, but they can have real consequences for those requiring quick, round-the-clock access to liquidity.

For instance, if a Venmo transfer takes days to hit a recipient’s bank account, it could force them to draw on an empty balance in an emergency. Or a consumer might transfer money from a full account, only to find the funds are no longer available by the time the transaction clears days later.

In such cases, consumers are usually charged a damaging NSF (or non-sufficient funds) fee, with the financial institution incurring a penalty as well.

Consumers faced $12.4 billion in overdraft fees in 2020 alone, with the vast majority charged to low-income and BIPOC households.

This means slow money movement is more than just a nuisance—it’s a major barrier to financial inclusion.

 

24/7/365 liquidity

Orum is using cutting-edge machine learning and embeddable financial technology to align money movement with modern expectations. In practice, that means removing the friction from payment infrastructures and putting the right tools in place to enable same-day transactions.

Our debut product, Foresight provides upfront, real-time risk intelligence that has traditionally been unavailable to the ACH Network.

Using a simple API integration, Foresight uses predictive machine learning capabilities and Orum’s proprietary data network to assess the return risk of a transaction before it occurs. Armed with this data, our financial partners can then determine how to proceed with a transfer. If a transaction is determined to be low-risk, they can authorize a same-day payment; for higher-risk transactions, they may choose to apply greater friction to lessen the risk of return.

Our latest product, Momentum works as a smart decisioning engine across multiple payment rails. It enables real-time money movement by optimizing for speed, cost, and risk across common channels—including ACH, RTP, wires, and eventually crypto and FedNow—and intelligently mobilizing payments through the best option.

In short, Momentum does for money movement what Amazon does for same-day package delivery. It doesn’t matter how your money gets from A to B; what matters is how fast.

By integrating Foresight and Momentum, our partners can ensure funds are moving in a way that’s quick, secure, and cost-effective, driven by the very best in financial technology.

 

Moving forward

Revolutionizing money movement is a monumental task. It involves not only finding the most efficient way to route payments but also mobilizing innovative predictive capabilities to eliminate the potential for risk and fraud. 

That’s why we’ve assembled a standout team with top talent in data science, fintech, and engineering. By channeling multi-industry expertise, we can truly tackle the problem from all sides and help build a seamless financial ecosystem.

Our vision

At a time when demand is restless, supply has to be instant. We live in the world of Netflix, Uber, Instacart, and Amazon Prime, where products and services materialize for consumers in a matter of hours or even seconds—and money should, too.

Studies have shown that one in four consumers would switch financial institutions to access real-time transfers. And almost 90% of gig workers would opt for a platform offering real-time payouts at the end of each shift.

It’s time to meet consumers and businesses where they already are and make money movement fast and friction-free.

Want to learn more about our products?

You can read how Foresight and Momentum are changing the money movement landscape on our website. Or reach out to our expert team to chat about what Orum’s money-movement solutions can do for you.

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