The challenge: Diversifying product offerings and streamlining payments
Having launched in 2010 offering term loans to SMEs in a large and underserved market, Funding Circle now provides small businesses in the UK with an expanded product suite, leveraging its existing brand and capabilities in SME credit, data and distribution. After ten years in the UK lending market, the business launched its FlexiPay product, focusing on short-term cash flow solutions rather than its core long-term lending, which targets capital-intensive projects, and it’s here that Modulr provides invaluable support to the product’s continued success.
Funding Circle envisioned FlexiPay as a product for daily business use, but able to scale rapidly to high transaction volumes. To deliver the product effectively, it called on Modulr’s capability to rapidly create EMI accounts alongside automated Confirmation of Payee functionality. This support helped the lender to progress through FlexiPay’s initial launch stages and manage the potential administrative burden as the product attracted new customers and higher transaction volumes.
The solution: Modulr's flexible payment infrastructure
"Modulr’s account capability was a crucial element of that key feature of the product," notes Chris Wood, Product Manager at Funding Circle.
Every borrower gets a Modulr account where they can receive their credit and use it to pay out to their suppliers. Initially, Funding Circle administered these accounts manually, through Modulr’s web portal. However, as soon as the product moved beyond proof-of-concept it became clear that there was far more value to be had in embedding Modulr’s API into Funding Circle’s own systems, allowing automation to massively increase the efficiency and speed of the entire system.
“We've got enough capacity in the process that it is automated to scale 10x, 20x what it is today, and we know it will cope."
The results: Rapid scaling and improved efficiency
The partnership with Modulr has enabled Funding Circle to rapidly scale FlexiPay.
“We are not a bank,” says Chris. “We leverage investor capital to provide financing solutions. Our fee-based model ensures transparency and cost-effectiveness for our customers and they pay a flat fee per transaction.”
That simplicity is echoed in the Modulr infrastructure underpinning FlexiPay. A full API integration means that Funding Circle benefits from:
- Real-time payment processing
- 24/7 operation
- Simplified reconciliation and processing of high-volume payments
- Seamless scaling of operations without major disruptions
- A significant reduction in payment failures and average handling time
“Automated Confirmation of Payee is a really important part of the service,” stresses Chris, and he points out that Modulr’s demonstration of it preceded the API integration – and to some extent made a case for it.
“Initially, our customer service was quite manual. Modulr’s Confirmation of Payee had an immediate, positive impact on handling time and failure rates, improving the experience for our customers,” Chris explains. “After a year, we sought automation and improved transaction access. The API delivers precisely that.”
These changes saved the team many hours as customer volumes began to increase, and ensure customers can feel secure that their payments will arrive automatically, on time and without relying on human intervention.
Chris highlights the ongoing impact of the partnership, noting that over the two years between August 2022 and August 2024, average daily payment failures halved despite average daily payment volumes doubling. "The value for us now is just the scale really,” says Chris.
“We've got enough capacity in the process that it is automated to scale 10x, 20x what it is today, and we know it will cope."
If you want to explore how Modulr could help your business process payments, please get in touch.
To learn more about working with Funding Circle, reach out at www.fundingcircle.com.
