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1. Will PayEz do instantaneous loan approval or will there be a manual/ offline verification process?
– Instantaneous approval for certain customers (e.g. good credit score). For other customers, income and bank documents needs to be verified before approval.
2. Are there more than one lenders on the PayEz platform?
– Yes
3. Will the customer be offered more than one loan option?
– The customer will be provided up to 3 loan options (different loan terms and APR, most likely from multiple lenders)
4. Who bears the cost of loan origination? Lender or customer?
– Customer bears cost of loan origination. A loan origination fee will be included in the loan amount and EMI’s will be calculated accordingly.
5. What other transaction costs?
– No other transaction costs. Late fee, Insufficient fund fee etc. will be levied as appropriate.
6. What happens in the case of returns or chargebacks?
– Merchant will have to approve the refund/ chargeback. If merchant issues refund then refund amount will be used to adjust against outstanding loan. If merchant offers store credit then loan remains unchanged.
7. What happens if customer pre-pays?
– No prepayment penalty to customer. Prepayment amount always displayed to customer.
8. What happens if customer defaults? Collection process/ ownership.
– PayEz is not responsible for servicing the loan. Loan servicing is the responsibility of the lender.
9. What does PayEz charge?
– PayEz charges a loan origination fee to the customer – added to loan amount. PayEz also charges a fixed % of loan payments received from customer (1-5%).
10. What is the typical loan size & duration?
– Typical loan size of $1000 to $35000, loan duration of 6 to 60 months
11. What underwriting criteria are used to approve a loan?
– Traditional underwriting + new, proprietary methids.
12. Is it a line of credit type of arrangement?
– No. Each loan application is stand alone and independent of other loan applications.
13. Is there an online web interface for merchants/ customers
– Yes – merchant as well as customer interfaces
14. Can the lender or merchant run marketing campaigns?
– Yes, these will be at the discretion of the lender or merchant and they will bear any costs associated with the marketing campaign.
15. Integrations – lender + merchant + any 3rd parties (payment processors etc.). APIs/ SDKs?
– PayEz will provide a web interface that will interface with merchant’s and lenders financial systems.
16. What is the typical settlement process and timeline?
– Loan amount can be transferred to Merchant account within 2 business days of approving the loan to the customer.
17. Information required from customer when applying for loan
– Customer’s SSN, Income and Bank details, Address, Government issued ID, Phone number
18. Onboarding process + requirements for merchants
– Background check (legitimate business check), Incorporation details, 3 years Income tax returns, 3-6 months Bank statements, Merchant agreement
19. Loan disbursement – conditional or final? Hard copy of signed loan agreement to customer (or soft copy?)
– Loan disbursement only on final approval. Soft copy (e-signature) only.
20. Back office support for loan origination as well as servicing? Also, IT support?
– Full back office, phone support. IT support to lenders and merchants in case of technical issues.
21. Option to use purchase as collateral? E.g. white goods
– No. Personal “unsecured” loan only. Unless, lender is willing to offer secured loans
22. Does the merchant receive incentives to sign up customers for loan or on achievement of certain number of transactions/ $$ values?
– Yes, TBD.
23. Integrate with merchant POS device/ billing system or independent web interface/ POS device?
– Yes, as appropriate.
24. Any preferred customer target segments?
– Depends on lender underwriting preference
25. Regulatory issues/ challenges as well as responsibilities (merchant, lender, PayEz) – statewise/ federal?
– Lender license to cover regulatory requirements. PayEz acts as a platform only.
26. Security issues, fraud liability, purchase protection etc.
– In future plans
27. Mobile solutions?
– Integrated mobile app for customer as well as merchant
28. What data will we collect? How will we use this data? Will the merchant or lender get access to some or all data? What kind of BI or analytics can we do – value-add to lender/ merchant? Will we price this service?
– Merchant will only get access to customer data to complete the transaction (e.g. address). Data privacy and terms of use to be defined.
29. Who signs the Loan Agreement?
– The agreement is between the customer and the Lender. PayEz validates whether the Lender has the legal/ regulatory permissions to offer the loan in the first place.
30. How is the offline Point-of-Sale lending executed?
– The offline merchant is given user IDs to use on the PayEz portal to file an online loan application, get online approval, complete documentation and issue disbursements
31. How does the customer chose a preferred lender?
– 3 different lender options for APR, Tenure and calculated EMI are presented to the customer. The customer may still choose a preferred lender from the list.
32. What happens to a customer requesting a refund/ 30 day return?
– The merchant has to pay for the transaction fees and accrued interest to the lender. PayEz charges a one-time fixed refund transaction fees for the return.
33. What happens to a delinquent customer?
– PayEz can provide custom interfaces with Lender’s call center, third party collection agencies and internal departmental processes. However, the entire credit risk of the customer is managed by the Lender only.
34. What is the setup fee for the merchant?
– The merchant setup is free.
35. What is the setup fee for the Lender empanelment and integration?
– A Lender needs to work with the PayEz development team for the IT integration and loan approval and loan management process integration which are charged on a time-effort basis. On a small scale, semi-manual processes may be acceptable so far the SLA for loan processing, approval and fund disbursement are met.
36. What is the cost of operations?
– PayEz charges between 0.75% and 4% annual service fees as a percentage of loan originated to the Lender. In addition, the Lender needs to provide the IT infrastructure for day-to-day loan processing and loan management.
37. How does PayEz charges compare with competing credit card/ wallets?
– There is no underlying credit card needed for the process. PayEz service charges with all the integration costs are typically between 1 and 5% depending on the lender’s process
38. What is the maximum/ minimum loan amount? What is the typical APR?
– PayEz accepts loan applications from $1000 to $35000. The APRs range from 10% to 36% depending on the customer & lender.
39. What is the market size and typical revenue potential?
– Consumer Finance is a $2 trillion asset base industry with retail POS consumer finance constituting over ~20% of the market. Every typical small/ mid-sized merchant is expected to have a portfolio of 10 new loans of $1500 value per month.
PayEz is targeted to reach $1 million of loan offer within 12 months of launch. Future growth shall depend on early traction.
40. What is the regulatory environment? How is security & fraud managed?
– The Merchant, PayEz and the Lender are all exposed to different state and federal lending laws regarding disclosures and APRs. A detailed state-wise dossier is being prepared for specific regulatory context and is available on request.
41. What is the merchant profile?
– The offline merchants are expected to be a mix of SME and local large players. The online merchants shall constitute all high value online sellers.
42. What is the lender’s business risk?
– Beyond the usual credit and regulatory risks associated with consumer finance, the lender has the business risk of out-pricing itself when placed against competing offers, thereby delaying the marginal return on investment
43. What is the value proposition for a lender?
  • Opportunity to originate loans directly from merchant websites
  • Access to a much wider pool of potential customers
  • Comprehensive multi-device payments and finance platforms with Integrated Risk Assessment and Underwriting, Payment Gateways and ACH Processing
  • Valuable customer data that can provide useful analytics for your business
  • Opportunity to be an innovator/ leader in the online payment space
44. Secured or Unsecured loan?
– Unsecured loan
45. Where is PayEz accepted/ offered?
– PayEz will be offered at select approved merchant locations
46. How is the Loan funded?
– Once approved, the loan is funded directly into the merchant account.
47. Is there an ability to do a Joint application?
– In the future.
48. Are there any Pre-payment penalties?
– None.
49. How are the loans repaid?
– Loans can be re-paid by direct debit/ ACH from customer account, or debit card payments. Customers can also post a check to PayEz customer service department.
50. Are multiple loans allowed for the same customer?
– Yes, multiple loans are allowed. But the customer needs to fulfil the qualifying criteria for each loan application separately.
51. Does applying for a loan affect customer credit?
– Checking for credit eligibility is a soft enquiry and does not affect credit score. Loan application is a hard enquiry and will affect credit score.
52. Will PayEz report customer loan and details to credit agencies?
– Yes, PayEz will report loan details and payments to credit agencies. On time payments can help improve a customer’s credit score.
53. Do I need to choose a merchant before I can apply?
– Yes, a merchant ID and loan amount (authorized by merchant) needs to be chosen before applying for a loan.
54. Who services the loan?
– PayEz is not responsible for servicing the loan. Loan servicing is the responsibility of the lender.
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