Moneyline was set up in 2002 as a Not-for-Profit organisation to help members of the community who were left behind by mainstream banks and lenders. Today, Moneyline is a responsible lender with an aim to deliver fair and affordable financial products, primarily to lower income households. They offer an alternative to short term credit providers which can trap individuals into a burden of unmanageable debt.
There is a growing void in the non-standard credit market that responsible credit providers need to step into, to prevent illegal and unregulated lenders filling the gap. In fact, 20% of people in the UK are unable to access affordable credit or find flexible ways to deposit savings through mainstream banks due to the low value and short-term nature of what they need (https://moneyline-uk.com/). This is where Moneyline steps in.
Easy to Use, Cost Effective Payments
Moneyline has built a loyal customer base with 65% returning at financially tough points in time. They wanted to recognise this loyalty with an excellent customer experience including greater choice when it came to payments. Recent changes in banking regulation, namely ‘Open Banking’ have enabled competition into the market and the creation of better, more cost-effective solutions that also help people manage their money. Providers that have been authorised by the Financial Conduct Authority (FCA) are now able to offer, amongst other solutions, alternative payment methods to cards, direct debits and bank transfers. Ordo is one such provider, authorised by the FCA and backed by key investors, including Nationwide Building Society Ventures. Their management comprise of the team that ran the Faster Payments Scheme, the payment rails for Open Banking, and who knew there was a better way to make payments.
Ordo’s smart payment solution allowed Moneyline to offer its customers an alternative to traditional payment options like cards which are costly (businesses pay a percentage of value) and are getting more cumbersome for end customers to use with the roll out of Strong Customer Authentication. And using Open Banking means Moneyline can get their loans to customers the moment they’re approved; quick payouts: crucial for those who are in urgent need to fill a temporary financial gap.
The easy to use, clear interface where all the information is already populated, means the customer simply authorises the payment that has been set up for them in their online banking app. And because Ordo payments are entirely real time, the Moneyline staff can talk their customers through making their payment whilst they’re on the phone, giving both parties peace of mind.
Moneyline wants to help its customers squeeze the value out of every £1 and one way of doing this is to reduce the amount of interest paid on their loans. As interest is charged daily, the sooner some of the balance can be paid off, the less interest a customer pays. Moneyline was looking for a partner who could help their customers take advantage of any ‘lumpy’ income, when they may be in a position to make earlier or greater payments than expected. Ordo’s future proofed platform, which provides a fully hosted white labelled solution for businesses, is already live and operational for Variable Recurring Payments (VRP) for the first use case to get going, Sweeping, and was what made Ordo the ideal choice for Moneyline.
Future Proofed for VRP and live with Sweeping
VRP is the new capability live in Open Banking and is intended to make repeated payments simpler and more flexible for both businesses and their customers. It is essentially a form of ‘smart direct debit’ and brings benefits to both parties.
VRP works on the basis of on-going consents agreed between a business and their customer. The customer sets up a payment mandate giving their consent for a business to take recurring payments from their bank account. But, unlike a direct debit, the customer can then set parameters around the value and frequency of the payments.
This means the customer can make changes to the amount of the payment, the frequency of the payment and they can even set the mandate to the ‘ask me before paying’ option if things get unexpectedly tight, or a payer just wants more oversight for a period of time regarding money leaving their account.
Ordo’s VRP payment solution means the customer is in control and can flex their payments according to their circumstances in order to get all their bills paid.
VRP has many advantages for businesses too. For example, once authorised by the customer via their banking authentication, the recurring payment mandate can be set up and used immediately, and the payment is irrevocable. And, as long as they are within the agreed parameters set by the customer, the business can collect future payments on demand and in real-time, meaning goods or services can be dispatched, provided or taken away immediately, with certainty of payment, rather than having to make a one-off payment or wait a fortnight, as with today’s direct debit.
The first VRP use case to be exploited is for so-called ‘Sweeping’. This is where both sending account and receiving account are in the same name: sweeping money from a current account into a loan repayment account, overdraft account, to pay off a credit card bill or pay into a savings account, for example. The only requirement is that both accounts are in the same name, so it will be a game changer for the credit and lending and wealth sectors.
Using an Open Banking provider like Ordo, where the FinTech does the heavy lifting in terms of tech build, hosting and managing the service, with white labelled screen design and management of the ongoing repeated payment mandates and parameters, means businesses can get up and running with a VRP Sweeping service within days with very little build by themselves or ongoing attention; with an out of the box plug and play solution, businesses can start saving from day 1.
The partnership with Ordo means Moneyline can continue to offer their customers fair and affordable credit in a way that is flexible and keeps pace with the demands of modern life.