While new technology can open doors to innovation and disrupt legacy industries, rapid progress often comes with new responsibilities, such as in the LendTech sector.
Along with faster, more inclusive lending models, the growth of LendTech is also exposing the sector to heightened scrutiny.
Payout speed, compliance with regulations, and secure expense management are among the key battlegrounds.
This is where FinTech innovators, such as B4B Payments, can give lenders a critical edge.
Two types with one common need
LendTech is reshaping how lending is accessed, delivered, and managed. It plays a vital role in economic growth, enabling everything from household purchases to commercial expansion.
Let’s take a closer look at the two types of LendTech:
- Consumer Lending, where platforms like Fair for You help individuals access credit for everyday items like appliances or furniture, often in partnership with major retailers.
- Corporate Lending, where leasing providers such as CF Commercial support businesses with financing for equipment, furnishings, or technology.
By digitising the lending journey from application and approval to disbursement of funds, providers can reach more customers, reduce overheads, and deliver better experiences.
But innovation faces a reality check in the form of regulatory complexity. UK Government legislation means that the industry must comply with some strict rules, especially when it comes to how payouts are made and who receives them.
Their key challenges include:
- Increasingly tight compliance and anti-fraud rules
- Restrictions on cash incentives and payouts to salespeople
- A need to control where and how funds are spent
- Delays and costs associated with traditional bank transfers or cheques
In addition to these heightened demands, both consumer and corporate lenders also share a common operational need: a fast, secure, and compliant way to disburse funds or commissions.
There’s increasing scrutiny around how payouts are made and tracked, particularly in the subprime or credit-sensitive lending space.
Whether a lender is issuing credit to a consumer for a washing machine or paying a salesperson their commission, the efficiency of the payout process matters. It’s important to both the recipient and the business. Many lenders still rely on outdated and slow methods like bank transfers or even cheques.
How payments technology can help
Think of B4B Payments as your payouts partner. Using our technology, lenders can issue their own branded or unbranded virtual or physical Mastercard cards. These can be:
- Preloaded and controlled in real-time
- Restricted to approved merchants or categories (e.g. specific retailers)
- Delivered instantly via API integration
For example, Fair for You uses B4B’s card platform to allow borrowers to buy only from partner stores such as Argos or Habitat. The card is limited by merchant category code (MCC), ensuring the funds are used appropriately while keeping operations streamlined and compliant.
Out of the box speed, control, and flexibility
In a highly regulated space like lending, control over payouts is non-negotiable. B4B Payments offers a turnkey solution. That means everything from issuing cards to loading funds and then monitoring transactions is managed through one platform. This includes:
- A fully compliant, FCA-licensed EMI framework
- API connectivity to automate card creation and fund disbursement
- The option for ATM access via physical cards, if needed
Speed is also a differentiator. B4B clients can expect to launch a standard incentive program in as little as four to five weeks. Predictably, the main variable that can extend those timelines is the compliance processes.
Another challenge – building trust in a crowded market
New entrants in the LendTech space face a tough challenge: standing out in a competitive, reputation-sensitive market. A slick user interface and fast decision-making are important, but so is operational reliability.
Problems in this area can mean processes don’t connect seamlessly, and the user experience is disrupted. Such negative experiences can quickly undermine the customer’s perception of your brand.
B4B supports lenders in delivering seamless financial experiences without the headaches of managing complex payment infrastructure. In sectors where customer satisfaction and speed of service are paramount, this can be a game-changer.
Moreover, B4B places a high value on long-term relationships. Once a lender has a great experience with B4B, they often refer others, so word of mouth is critical. The B4B team likes to stay closely involved, even after onboarding.
Lending with FinTech precision
As LendTech companies work to balance regulatory demands with commercial growth, the ability to move money quickly, securely, and with full control has never been more important.
In addition to straightforward implementation and card issuing, B4B cards also offer lenders the opportunity to grow trust and awareness in their business by branding their cards.
Ever-increasing regulation seems an inevitability, particularly in the consumer lending space. This is likely to take up more time and resources of lenders so finding new ways to automate everyday processes such as payments will help redress the balanced.
Embedding outbound business-to-business payments isn’t just an upgrade; it’s a competitive advantage. Embedded outbound business payments matter because they create additional value in both retention and acquisition of new clients, while unlocking new revenue streams.
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