Why lenders should embed real-time pay-outs into their systems
As a lender, your ability to deliver funds quickly is critical. Borrowers expect their money when they need it, and any delays can undermine your credibility.
Despite the ability for lenders to release funds within 24 hours of approval, via Faster Payments or CHAPS, it can take days or even weeks receive funds, whether for a mortgage or a small business loan.
This is because any lender reliant on legacy systems can be slowed down by manual processes around due diligence, accessibility challenges around specific payment rails, or delays around batch processing of applications.
Modulr empowers lenders by providing the infrastructure to ensure immediate pay-outs, backed by integrated payment systems, licences, and access to UK and European payment networks.
Whether you’re offering consumer or business finance, or even salary advance services, Modulr’s real-time payment capabilities let you fulfil your promises with confidence.
And whether it's delivering an emergency loan to a consumer or facilitating a time-sensitive corporate funding requirement, Modulr’s payment infrastructure ensures that funds are delivered precisely when promised.
In this blog, we’ll be looking at:
- Meeting borrowers’ expectations with speed
- Direct access to Faster Payments and SEPA Instant
- The benefits of embedding automation into loan management systems
- Improved traceability, security and fraud prevention
- Streamlined reconciliation and operational efficiencies
Meeting borrowers' expectations with speed
In the lending business, your value proposition hinges on providing quick, reliable access to funds. Borrowers, whether individuals or businesses, often seek loans during urgent situations – unexpected expenses, investment opportunities, or cash flow gaps. Modulr helps lenders deliver funds exactly when needed by offering instant pay-outs through Faster Payments and SEPA Instant systems.
This immediacy builds trust and allows borrowers to plan their financial decisions with certainty, making lending service more attractive and competitive. What’s more, lenders face fewer support calls about the status of approved loans when funds are dispersed instantly and Modulr’s real-time notifications are embedded into their Loan Management Systems (LMS).
Lenders who fail to meet pay-out expectations risk damaging their reputation and losing customers. By automating the pay-out process and offering real-time payments, Modulr ensures that lenders can avoid delays and process pay-outs efficiently, strengthening the relationship between lender and borrower.
Direct access to Faster Payments and SEPA Instant
Modulr has direct access to the UK’s Faster Payments Scheme and is connected to the European SEPA Instant payment network. As of May 2024, only 46 institutions had direct access to Faster Payments, making Modulr one of a select few non-banks with this capability. This gives lenders an enormous advantage in processing payments instantly, ensuring that funds reach borrowers quickly and reliably.
Direct access eliminates the need for intermediaries, which not only accelerates payments but also reduces counterparty risks and the costs associated with traditional payment processing. For lenders, this means they can offer a seamless experience to their borrowers, whether they are transferring funds domestically or across borders. With Modulr’s instant payment solutions, lenders are equipped to meet the needs of a fast-paced, digital-first market.
The benefits of embedding automation into loan management systems
Manual payment processes are slow, prone to errors, and a significant source of frustration for both lenders and borrowers. Where lending businesses rely on their LMS to generate database files, the manual integration of these files into payment systems is time-consuming and introduces risks such as data entry errors and delays.
Modulr’s solutions help lenders integrate automated, real-time pay-outs directly into their LMS via a Modulr API. By automating the payment process, lenders can reduce administrative overhead and minimise errors, ensuring that borrowers receive their funds on time, every time.
Improved traceability, security, and fraud prevention
In addition to speed, Modulr’s automated real-time payments provide enhanced traceability and security. Lenders gain complete visibility over their payment flows through real-time notifications and tracking, enabling them to monitor the status of each payment and ensure funds reach their destination. This level of control is essential for mitigating risk and ensuring regulatory compliance.
Automation also reduces fraud risk, thanks to Confirmation of Payee checks that verify the recipient’s identity before payments are made. This feature is critical in preventing fraudsters from intercepting funds or diverting payments to unintended recipients. For lenders, the combination of speed, security, and traceability helps build a stronger, more reliable payment infrastructure.
Streamlined reconciliation and operational efficiencies
One of the often-overlooked benefits of real-time pay-outs is the ease of reconciliation. Modulr’s single API platform simplifies both inbound and outbound payments, allowing lenders to manage their entire payment process through one integrated system. This streamlines operations, reducing the administrative burden of manual reconciliations and freeing up time for more valuable activities.
With real-time data on pay-out status and automated reconciliation, lenders can ensure their financial records are always up to date, improving transparency and financial control. This not only enhances internal efficiency but also improves the overall borrower experience by ensuring timely, accurate pay-outs.
Modulr’s real-time pay-out solutions are optimised for lenders looking to offer their borrowers fast, secure, and reliable access to funds. By integrating with lenders’ existing systems, Modulr automates the pay-out process, reduces administrative burdens, and ensures payments are delivered instantly.
If you're ready to enhance your lending operations and deliver real-time payments with confidence, learn more about Modulr’s real-time payment solutions here.
