Loan Payment Processing by Debit Card

loan payment debit card

A state-licensed lender can provide installment loans, title loans, lines of credit, flex loan products, and the like, but getting repaid sometimes is a gamble. Rising regulatory hurdles like the infamous “Operation Chokepoint” have made it difficult for service organizations like ACH processors to stay in compliance. What happens when the borrower wants to use […]

loan payment debit card

A state-licensed lender can provide installment loans, title loans, lines of credit, flex loan products, and the like, but getting repaid sometimes is a gamble. Rising regulatory hurdles like the infamous “Operation Chokepoint” have made it difficult for service organizations like ACH processors to stay in compliance. What happens when the borrower wants to use their debit or bank card to pay but state and federal regulations limit its use?

James Celli, CEO/Co-founder, recently spoke about the LoanPaymentPro solution to the problems that can occur in repayment processing.

“The company came from the realization that many acquiring banks will not work with processors,” Celli said, “because there is not an adequate mechanism for processing Visa/MasterCard according to state and federal regulations.”

The company’s primary client is the state-licensed lender. They do not support payday loan lenders or single loans. Founded five years ago, LoanPaymentPro completed a seed round and began marketing two years ago, starting with nation-wide lenders as clients. But 18 states do not allow any sort of consumer lending.

“We have technology that adheres to regulations,” Celli said. “We also have a patent pending. We work with state-by-state licensed installation loan lenders to instantly verify and accept debit cards, bank cards, ACH, and RCC/Check21. The lender has the ability to integrate LoanPaymentPro into their loan management system or to use it as a standalone payment gateway to process any of those payments.”

The flow of money is processed by LoanPaymentPro, settled by settlement or the acquiring bank, and disbursed to the lender in a corporate bank account with standard 2-day processing.

“We offer revolutionary payment acceptance for consumer lenders,” Celli said. “We’re built by lenders for lenders. You can use a bank card, debit card transactions, credit cards, margin-based, or consignment cards to be repaid.”

There are other domestic acquirers that service the industry but they lack the proprietary patent-pending technology. LoanPaymentPro only supports state-licensed, non-payday lenders who are not prohibited by state or federal regulations. They recently launched a product validating accounts and verifying cards, allowing a lender to validate and verify all cardholder and card data. This will reduce fraud and increase payment acceptance. By the end of Q2, they will launch instant bank verification technology that will allow lenders to perform funds confirmation prior to processing a payment.

“I think the payment processing industry is only going to become more difficult with the increase in state and federal regulations,” Celli said., “however, with the current administration and our understanding of its direction, those regulations will loosen. We’d like to have further dialogue and develop relationships with regulators to ensure lenders aren’t prohibited from accepting payments. That will provide an ability for us to service our clients in a more lax compliance environment.”

Authors:

Written by Nicki Jacoby.