How Numeral empowers fintechs with a pan-European, real-time payout infrastructure

Matthieu Blandineau
April 2024
min read

Whether collecting payments on behalf of merchants, extending loans, or providing insurance, most fintech services value is realised when a payment is made to their merchants, partners, and customers.

But merchants, partners, and customers increasingly demand faster, more reliable, and more economical payouts. And providing competitive payouts is hard:

  • Payments fail

  • Complexity grows exponentially with volumes

  • Building the right infrastructure is costly

In this article, we explore how Numeral enables fintech companies to deliver competitive payouts.

Enabling any fintech with a pan-European banking infrastructure

The challenge

At Numeral, we are convinced that growing fintech companies should partner with banks to build their payment infrastructure. This applies even more to payouts, for which reducing the number of intermediaries in the flow of funds unlocks faster payouts and improves unit economics.

Multiplying banking partners provides additional benefits for payout use cases. Sending payouts from local IBANs increases merchants' and customers' trust while preventing IBAN discrimination from their financial institutions.

Connecting with local banks in the markets you address enables you to access local payment schemes and systems, such as Bacs and FPS in the UK, RIX in Sweden or Straksclearing in Denmark.

Finally, it increases payout reliability by providing fintech companies with multiple routes to send a given payment in case a specific partner bank is unavailable or the receiving bank doesn’t support a payment method.

However, building, maintaining and operating a multi-bank infrastructure requires significant resources – leading fintech and payment companies such Wise, Klarna, or have dedicated teams of hundreds of engineers to do so.

How Numeral helps

Numeral provides any company with a pan-European banking infrastructure from day one, thanks to native integrations with 20+ banks across the EU and the UK, enabling access to local IBANs across Europe, SEPA, UK schemes, Bacs and FPS and local payment schemes, as well as support of Swift payments through connected banks.

Providing a better payout experience with a dedicated application layer

Automated payment retries for 100% payout success rate

The challenge

Payments can fail for many reasons at various stages of their life cycles. Examples of failed payment reasons include

  • The payment breaks the sending bank’s rules, such as insufficient account balance.

  • The sending bank’s systems are unavailable

  • The receiving bank doesn’t support the payment method used

  • In the case of instant payments, the payment took too long to process end-to-end and times out

How Numeral helps

To ensure a successful payout eventually reaches your customer's bank account, Numeral includes an automated payment retry capability.

Based on information retrieved from the partner bank, Numeral automatically identifies when a payment fails and why.

And when it does, Numeral automatically retries the payment following predefined custom rules that can take into account

  • The type of the original failed payment (e.g. SEPA instant payment)

  • The reason why the payment failed

  • The bank and bank account from which the payment was sent

Based on these inputs and the defined rules, Numeral will send a retry payment:

  • Immediately or at a later time

  • Of a different type, for instance, fallback to a SEPA regular payment if a SEPA instant payment fails

  • From a different bank and bank account, for instance, if the original sending bank is unavailable or if the original sending bank account has insufficient funds

To ensure payment, finance, operation, and support teams can easily keep track of these retries. Numeral keeps track of all original failed payments, the resulting performed and planned retried payments, and the retry rules applied.

This information is easily accessible in our dashboard and API.

Increase customer trust with more transparent payout tracking

The challenge

When customers do not see a payout on their bank account at the usual time and day or when expecting their first payout, they will understandably wonder where their funds are.

Customers will solicit your customer support team if you do not proactively share updates on payments made through your product. If customers find out that a payment has failed only after contacting your support team, they will lose trust in your product.

Tracking payments in real-time and sharing this information with your customers will decrease support tickets and increase customer trust.

How Numeral helps

Numeral provides fintech with real-time payment tracking capabilities relying on the payment status report and account statement files it retrieves in real-time from connected banks.

This information is instantly available via API and pushed through webhooks so fintechs can leverage it to inform customers in real-time.

Faster payouts with instant payments and automated workflows

The challenge

Next-day or even instant payouts are becoming the norm for merchants acquiring products. Businesses and consumers alike expect the funds to reach their bank account as fast as possible after a loan has been approved. Overall, the market is increasingly demanding fast, if not instant, payouts.

The trivial part of this challenge is sending payouts via instant payment methods, such as SEPA instant payments or UK’s FPS or Faster Payments.

The less trivial part is that payouts are often conditioned to a corresponding payment being collected. For merchant acquirers, it’s a card, direct debit or alternative payment method like Paypal or Multibanco payment being collected. For BNPL, it’s the first instalment being successfully collected.

Once this condition is verified, fintechs must consequently create the payout and send it to their partner bank as fast as possible.

Once this condition is verified, fintechs must consequently create the payout and send it to their partner bank, as fast as possible.

To do so in a reasonable timeframe, at scale: 1. It’s necessary to retrieve and reconcile data from many systems and partners, including banks 2. No manual tasks can be involved

How Numeral helps

Numeral enables fintech companies to accelerate payouts in two main ways.

First, Numeral enables fintechs to send SEPA instant payments and UK’s FPS or Faster Payments via its platform and through connected partner banks that support such payments. It results in payouts reaching fintechs’ customers' bank accounts 10s maximum after being sent for SEPA instant payments (a few minutes for FPS payments).

Second, Numeral accelerates internal payouts workflows by:

  • Automatically retrieving the required data from internal systems, banks, acquirers and APMs and reconciling it to validate that the funds corresponding to collected payments conditioning payouts have effectively been received

  • Making all that reconciliation data and the underlying data retrieved from systems, banks and acquirers available to fintechs in real-time, in a normalised way, via API and webhooks. Based on this data, fintechs can automatically trigger payouts once the right conditions are fulfilled.

The right tools for payment, operations, support and finance teams

Centralised visibility on all payout operations

The challenge

Automation doesn’t rule out human oversight – and sometimes human actions. When working with multiple partner banks and payment schemes, the tools to access and monitor critical information, including payments and their statuses, bank account balances, transactions on bank accounts or reconciliations, are often scattered, unintuitive and sometimes non-existent.

It requires teams in charge of payout operations to jump between interfaces, create SQL queries to access critical data or be dependent on engineering teams.

The solution

Numeral comes with a central dashboard for payment, operations, support and finance teams to have real-time visibility on all payment operations across all their banks.

Through this modern interface, teams can access information such as:

  • Sent and received payments and their real-time statuses

  • Payment errors and exceptions

  • Real-time account balances

  • Transactions posted on connected bank accounts

  • Reconciliations

This is normalised across all banks and bank accounts.

Better customer support, faster incident detection and resolution

The challenge

No matter how sophisticated your payment stack is, there is no such thing as 100% automated payment operations. Payment failures, reconciliation exceptions, and more will happen.

When these issues happen, they affect your customers. Payouts will be delayed and sometimes impossible and new bank information will be required. In such cases, what matters is:

  • Informing customers of what is happening

  • Solving the issue as fast as possible

If the data about payout statuses, the errors they encountered and what triggered them (e.g. the incoming payment a payout is conditioned to hasn’t been reconciled) is scattered around different tools, requires extra steps to obtain or match with the issue raised by the customer, your teams won’t be able to identify, communicate about and solve payout issues quickly.

And it will impact your customer satisfaction.

How Numeral helps

Alongside the payment tracking capabilities mentioned above, Numeral makes available through its dashboard the latest status of all payments from a single place, as well as status details on each payment and, when relevant, the return and reconciliation linked to each payment.  It enables payment, operations and support to know if and why a payment failed in a few seconds.

Improve payouts on any stack

Connect modern, composable architectures to banks’ legacy cash management connectivity solutions

The challenge

As we discussed in this article, working directly with partner banks presents many advantages to operating payouts at scale.

However, banks often offer robust and scalable yet unusual connectivity options for fintech companies operating modern stacks based on microservices connected via real-time APIs: the majority still rely on exchanging payment and other messages through XML files uploaded to and downloaded from SFTP servers.

Quite a stretch for fintech product and engineering teams.

How Numeral helps

Numeral abstracts the complexity of creating, retrieving and processing payment files. Numeral connects with the best available connectivity solution of partner banks and exposes a modern API and webhooks on the fintech side. So, fintechs can focus on the payout functionalities their customers need, while Numeral takes care of batching payments into files or parsing account statement files.

Augment legacy stacks

The challenge

The most mature fintechs might have had no choice but to rely on unspecialised solutions, such as treasury management systems built for corporates, to manage their payouts. In addition, most accounting solutions and ERPs can only rely on payment and account statement files to ingest the required data.

How Numeral helps

In addition to API and webhooks for modern stacks, Numeral can integrate with legacy systems relying on files on the fintech side. 

Inside the Numeral platform, payments and all other objects are stored and processed individually in real-time. To fit the requirements of partner banks, as discussed previously, and specific third-party systems, Numeral can create or ingest and process common and custom payments, account statements or payment status report files.

The power of normalised, real-time data across all banks

The challenge

One of the challenges of multiplying partner banks and supported payment schemes is the heterogeneity of file formats, messaging formats, data, data models and data encoding across banks and schemes.

In a fintech processing payments, this data is leveraged for many other tasks that for payments themselves, such as accounting, reconciliation.

It translates into significant product and engineering efforts to make sure the workflows upstream don’t break and that all the systems relying on this data can process the data of newly added banks and schemes.

How Numeral helps

For any connected bank, acquirer and scheme, Numeral normalises the data it retrieves into the objects exposed into our API and events streamed through our webhooks.

Fintechs can base their upstream workflows on this normalised data and be sure that adding a new bank or scheme won’t break them.

With Numeral, “merchant payouts is now a topic fully automated and optimised”

Numeral has a proven track record of improving multi-bank, pan-European payouts for fintech companies. Leading BNPL company Alma leverages Numeral to automate payouts to its 14,000+ merchants while factoring company Finqle sends 1 million payments per year in continental Europe and in the UK with Numeral.

Contact us to explore how Numeral can support your payout use case.

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