Swedish fintech company Froda, together with Visa and Checkout.com, has developed a new financing product aimed at banks and fintechs that want to support small and medium-sized enterprises, a segment that has historically been difficult to reach, assess and finance without heavy administration, infrastructure and local payment solutions. The product now gives banks and fintechs the opportunity to expand internationally, without having to implement different solutions per market.

Visa enables secure and fast real-time transfers between countries, currencies and bank customers globally through its Visa Direct service. Now, this service has been integrated in a new way in a partnership with fintech company Froda, which specializes in financing for small and medium-sized enterprises, and Checkout.com, the world's leading payment solutions platform. The partnership has resulted in an innovation that provides a new, reliable and global method of disbursing business loans to SMEs.

- We know that the implementation of local financing solutions is a challenge for many players when they want to establish themselves in new markets. With this solution, we have created an entirely new infrastructure that is globally viable. By using Visa Direct, we can strengthen our offering in integrated corporate finance in different markets, thus helping millions of entrepreneurs with growth capital," says Olle Lundin, co-founder and CEO of Froda.

The financing product is offered through Froda Embedded and enables all Visa corporate cardholders to now also offer corporate loans without having to have all the infrastructure in place themselves. It will primarily facilitate traditional big banks and neobanks wishing to support businesses with capital, but it can also be applied to all companies that provide Visa corporate cards to their customers.

Demand for a product like this is high as small businesses have long struggled to access finance.In Europe, SMEs make up 99% of all businesses, employ 100 million people and account for over half of Europe's GDP.

- We are always looking for new innovative partnerships, products and ways to solve complex challenges. Finding new innovative uses for Visa's card infrastructure is definitely part of that vision. I am convinced that this is the future of payments and embedded financing," says Adel Naamneh, VP Global Strategic Revenue Growth at Checkout.com.

Unlike traditional corporate finance, which usually involves bank transfers and local implementations in new markets, Froda's product enables real-time transfers to over 200 countries. This means that money is transferred directly between accounts through Visa's card network. 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.

- "With this product, we are introducing a completely new use case for Visa Direct. My hope is that this will set a new standard for business loans and empower businesses across Europe in their ambition to grow," says Philip Konopik, Regional Managing Director at Visa in the Nordics and Baltics.

The product allows partners to offer a fully digital and automated credit assessment process and real-time credit decisions through Froda. Visa Direct also enables payments to be made without delay, reducing the time from application to payment to seconds.

The product was introduced in February 2023 and launched on the Danish market in June of the same year together with the digital bank Lunar. The product is offered to Froda Embedded partners who are providers of Visa Business Cards.