Froda partners with Visa & Checkout.com for business loan payouts

By Gloria Methri

Swedish FinTech Froda has announced a partnership with Visa and Checkout.com to enable Visa Direct for embedded business loan payouts. The solution aims to introduce an improved push-payment functionality for business lending, which will enable seamless payouts and repayments for businesses across Europe.

Visa Direct is a processing capability that allows safe, convenient, and real-time funds transfers to financial accounts using card credentials. Froda will leverage Visa’s robust infrastructure to provide a secure, efficient, and fast method of payouts for business loans.

“We are excited to establish this partnership with Visa and Checkout.com that is going to strengthen our Froda Embedded offering and empower banks, neobanks, and FinTechs across Europe to offer financing with fast and reliable funds processing,” said Olle Lundin, co-founder and CEO of Froda. “With access to Visa Direct, we are able to further streamline the lending process and offer a seamless experience across markets.”

The solution is made possible through a partnership with global payment provider Checkout.com, which provides access to Visa Direct and the Visa Token Service, enabling the solution. The use of tokens allows end-to-end payments to be processed without the need for manual entry of card details. Visa Direct access is offered to Froda Embedded partners that are providers of Visa Business Cards.

“We are excited to be a part of this innovative card-based embedded lending product for SMEs. At Checkout.com, we are constantly looking for new innovative partnerships, products, and ways to solve complex challenges by leveraging payments. This partnership is definitely the stepping stone for the future of payments and embedded lending,” said Adel Naamneh, VP Global Strategic Solutions, at Checkout.com

Unlike traditional lending methods that typically rely on bank transfers for payouts, Visa Direct utilizes push payment functionality where funds are transferred between accounts directly through Visa’s extensive card network.

Visa Direct makes it possible to send real-time loan disbursements as well, significantly reducing the time from application to payout. Moreover, Visa Direct works the same way regardless of the market.

The product card-based embedded lending was introduced in February 2023 and launched on the Danish market in June of the same year together with the digital bank Lunar. Visa Direct access is offered to Froda Embedded partners that are providers of Visa Business Cards.