Why Orum eyes debit cards as the rails for more market share
The adage “If you build it they will come” applies inconsistently to the payments space. The mixed-results history of monetary projects — from the hodge podge of bank-issued currencies that preceded national tender to the alphabet soup of cryptocurrencies and stablecoins hoping for public adoption today — proves that the private-sector supply of a new monetary instrument or system won’t necessarily generate public demand for it. “Meet them where they are” is maybe a more sustainable, strategic mantra for payments companies: solving for breadth and accessibility and current-day relevance, even if that means tapping into bread-and-butter technologies, not just shiny new tools.
It’s in that spirit that Orum, the New York-based payment rail orchestration platform, has eyed debit cards as a conduit for further market penetration. On Wednesday, February 26, Orum announced that it would provide real-time fund transfers to and from bank accounts via debit cards through a tie-up with Visa Direct. In addition to this new rail, the company’s Deliver API also orchestrates payments through RTP, FedNow, Same-Day ACH, ACH, and wires.
Stephany Kirkpatrick, Orum’s founder and CEO, frames her startup as an “Amazon of money movement.” Where Amazon has had to optimize multiple logistics services to ensure that products reach customers reliably and on time, Orum uses a range of payments systems to guarantee timely and reliable circulation of money, regardless of the specific system compatible with a particular financial institution, the time of day a payment is orchestrated, and other previous concerns.
“In the last five years, we went from two choices — I’ll mail you a check or I’ll send you an ACH — to now … eight ways to do it,” Kirkpatrick told Fintech Nexus. “Our technology is always thinking about transforming how payments work for businesses without our customers ever having to think through the minutiae of [details] like, What time of day is it? Is that account on this network or that network? Is it eligible for this kind of payment? They offload to us all that multi-rail orchestration.”
Debit cards, which have been around since 1966 and proliferated in the 1980s, are part of Orum’s instant-payments schema due to their enduring ubiquity and utility. Business checking accounts have a debit card, as does nearly every banked consumer. According to Kirkpatrick, Orum can “unlock” the relationship between debit cards and their corresponding bank accounts through its Visa Direct partnership, which increases “by magnitude of millions” the number of accounts Orum can reach. “While RTP and FedNow are fantastic, they’re newer, so they don’t have the same ubiquity,” she noted.
The timing of Orum’s debit-focused tie-up is pinned to growing opportunity costs. As more enterprise-grade buyers consider Orum for service provision, the more its orchestration system’s reach matters, not just the qualities of its components. Having been “in cahoots” with Visa for a “long time,” Kirkpatrick said business demand crossed a threshold that warranted focusing on Visa Direct. (Companies like Worldpay, Stripe, and TabaPay also offer Visa Direct rails to customers.)
“As a startup, you can’t take very many principled risks of building something that you don’t know your customer wants to buy,” Kirkpatrick said. “You’re much better off to wait until you have critical mass, measuring the number of times we might have lost an opportunity because [a business] wanted to have this option.”
Granted, one reason why instant payments rails — whether Visa Direct, FedNow, RTP, or something else — haven’t been adopted across the board is because many financial institutions in the US aren’t technologically equipped to handle them.
Batch systems, typically formatted as a Nacha file, still facilitate the majority of B2B payments (in 2024, the ACH Network processed 7.35 billion B2B payments, or some $58.24 trillion). They are the payments infrastructure used by most financial institutions nationally. Though slower than newer payment rails, these systems allow for error rectification by executing payment file recalls, meaning payments are reversible as a way to mitigate risk.
Most instant-payment systems, on the other hand, aren’t reversible. So, while Orum offers a no-code solution that offers access to instant payments through Nacha formatting as a way to sign on more technologically old-school banks, the banks using the solution as a gateway to instant payments may lack the operational practices required to handle the risks of a faster environment.
To that end, Orum recently released its Monitor API — a payments tracking and compliance solution — to mitigate the risks of instant payments. Even with this complementary tool, however, there are still more than 4,000 banks and tens of thousands of financial institutions that have to fundamentally adjust their practices to make instant payments as universal as Orum and others are pushing them to be.
“As payment complexity increases, you’re going to increasingly need a solution… that sits across multiple payment networks,” Kirkpatrick added.
Over time, toggling between “If you build it they will come” and “Meet them where they are” may, bit by bit, accelerate payment systems nationally, aligning financial institutions’ practices with consumer expectations.
