Here at Orum, we’ve spent years talking with our partners about their biggest payment pain points and how our platform can help. Sometimes they ask us: “Why not work directly with Bank X?”
On the face of it, going direct to a bank might sound simpler (and potentially cheaper) — but that’s often not the case. Here’s how that process works, compared to Orum’s all-in-one platform, which delivers the simplest API integration for instant payouts.
What you need to get started at a bank vs. Orum
Right from the jump, the processes to get started are quite different.
With a bank: Before approaching a bank about working with them directly, your company will need several resources in place to ensure you are — and will remain — compliant with complex banking rules. That includes but is not limited to:
- A compliance program that adheres to federal Bank Secrecy Act/Anti-Money Laundering laws (BSA/AML).
- Engineering teams capable of building software and products for all kinds of financial tasks, including monitoring transactions.
- Experienced full-time employees and advisors to oversee this infrastructure and handle ongoing compliance requirements.
- Depending on your use case, you may be required to establish an FBO (For the Benefit Of) account, which allows a company to manage funds for their users without taking actual ownership of the account. An FBO account typically incurs annual costs and monthly minimums.
- You may also be required to build multiple integrations for different payment rails, depending on the bank of your choice.
After what’s typically months of going back and forth with the bank, you’ll probably need a legal team to review the agreement. When the build finally kicks off, the timeline is typically set by the bank. This initial process can take two years or more, and the required infrastructure must be continually maintained, audited, and kept compliant with evolving BSA/AML and other compliance requirements .
With Orum: We provide the simplest API integration for instant payouts. Our one-stop solution gives your company access to RTP, ACH, Same Day ACH, Wires, and soon FedNow.
Our unified API can be implemented into your tech stack in two weeks or less with some partners getting up and running in just two days. That’s a far cry from the typical $2 million and two-year investment required for companies to complete traditional bank integrations on top of the cost of maintaining a compliant money-movement program.
We partner with JPMorgan Chase & Co., along with the most reputable payment experts and investors, to ensure uptime, platform stability, and delivery of every transaction. We also assist clients with their BSA and AML compliance, and we establish measures to ensure you’re not inadvertently violating KYC watchlists, transaction monitoring standards, audit rules, and other complex requirements.
This can translate to significant time and money saved. For example: Coinflow partnered with us to provide instant fiat payouts for their crypto customers and launched instant payouts in one sprint using our API. We saved them two years and $2 million in unnecessary engineering and operating costs. And 78% of Coinflow’s customers prefer the accelerated payouts option created via their partnership with Orum.
So what’s the right path for you? Here are a few questions you can ask yourself, and your potential partners, to find out.
How much customization do I need?
Orum offers customization for key features and data optimization that may not be available through a direct bank integration. You can manage the user experience, tag transactions, add descriptors to account statements, and more.
How much time and money will I have to spend on the requirements to go direct to bank?
To work directly with a bank, you’ll have to hire engineering and leadership teams to build and manage complex software to ensure you stay in compliance. Opening a For Benefit Of (FBO) account typically comes with annual costs, monthly minimum balances, and potentially other fees and requirements. All in, the cost and timeline could be about $2 million over two years.
What timeframe do I need to go live?
With Orum, you can launch in two weeks or less — because you skip the from-the-ground-up processes of creating a compliance program, hiring teams to build software, and much more.
Do I need instant payouts? Can I access Real-Time Payments (RTP)?
RTP is a real-time payment rail introduced in 2017 that allows U.S. domestic payments to be processed 24/7/365 (even on bank holidays). Settlement is immediate, so funds are available instantly.
RTP payments can be sent and received only by institutions that participate in the network, which is available to all federally insured banks and financial organizations. But if RTP is something you’re interested in, note that not all of the roughly 9,000 banks in the U.S. have opted in (a list of participants in the RTP Network can be found here).
A bank that doesn’t participate in RTP might instead offer “same-day” ACH payments, but these don’t work in the same way. ACH payments are cleared in batches, and they settle only after the payments clear. Plus, ACH operates only during standard banking hours, not during after-hours, weekends, or holidays.
Orum gives your company access to all major rails without costly bank integrations or prolonged compliance. In one solution, you can deliver payouts via RTP, ACH, Same Day ACH, Wires, and (coming soon) FedNow.
If it sounds like Orum could be right for you, we’d love to tell you more. Get in touch with us today.