Granting loans in under 5 minutes: How FairMoney sped up onboarding using Smile ID

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FairMoney at a glance

Use Case

Regulatory Compliance, Fraud Prevention

Industry

Payments

Countries of operation

Nigeria, Zambia, Uganda

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Outcomes

40%
Surge in successful BVN retrieval
20x
increase in daily loan disbursement
9M+
Verifications completed with Smile ID

How FairMoney sped up their onboarding process using Smile ID

About FairMoney

FairMoney embarked on its journey in 2017 by offering digital loans, addressing a critical challenge in Africa - limited access to credit.

Recognising evolving customer needs, they expanded their vision beyond mere credit accessibility. In 2021, this evolution reached a milestone when they secured their banking license, transforming into FairMoney Microfinance bank. This marked a pivotal moment as they diversified their services to provide a complete suite of banking solutions.

Currently, their mission is to redefine African finance. An instrumental move in this direction was their recent acquisition of PayForce by FairMoney. PayForce is designed to revolutionise banking for merchants of all sizes, offering modern banking services such as POS solutions, credit facilities, and APIs for virtual accounts and transfers. FairMoney aims to reshape the African financial landscape by offering these essential services.

Looking ahead 3 to 5 years, they foresee individuals becoming more integrated into the Fair Money ecosystem. They plan to offer services like float financing, where they can underwrite loans based on transaction volume, tailoring them to meet the precise needs of each business. Additionally, they plan to provide services such as virtual accounts and transfer APIs, transforming into a comprehensive ecosystem for businesses.

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Challenges with verification

When FairMoney embarked on its journey to integrate more financial services and expand its offering, it faced a few considerable challenges.

  1. FairMoney urgently needed a verification partner that could deliver both speed and reliability. Their goal was to verify thousands of users daily in under 5 minutes while ensuring robust post-integration support. Initially, they worked with a verification partner but faced customer dissatisfaction due to slow onboarding processes; and so their quest for a partner with reliable access to ID authorities intensified.

  2. Incomplete data from previous providers posed another obstacle. This limitation hindered FairMoney's ability to make informed user verification and authenticity decisions, affecting their engagement in crucial banking and lending activities.

  3. Furthermore, they prioritised cautious risk assessment. Ethically evaluating a customer's capacity and willingness to repay loans was paramount. This evaluation shaped their approach to loan approval and repayment plans, emphasising the need for a meticulous KYC process.

Addressing these challenges pushed them to search for another verification partner that they could trust with speed, efficiency and effective post-integration support.

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FairMoney’s Criteria to Find the Right ID Verification Partner

In their selection process for a KYC provider, FairMoney considered several key criteria to ensure they made the right choice for their business.

  1. Firstly, they verified the industrial credibility of the provider: They sought information on whether other businesses of similar scale and nature were using the same verification partner. This served as a crucial indicator of the provider's reputation and reliability.
  2. Secondly, they evaluated the provider's reliability and uptime: Given their commitment to giving customers access to credit within five minutes, they recognised the importance of choosing a verification partner that prioritised speed. Any downtime on the ID verifier's end could compromise their promise to their customers.
  3. Thirdly, they strongly emphasised post-integration support: FairMoney, in their quest, realised that many ID providers became unresponsive after the integration phase. They wanted a partner with experts readily available to promptly and effectively address their questions and concerns.
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The Benefits of FairMoney's Partnership with Smile ID

  1. Enhanced data access: Transitioning to Smile ID resolved FairMoney's issue of incomplete data. They gained access to 20 additional data points, enabling better-informed user verification and authenticity decisions.

  2. Consistent uptime: Uptime reliability was crucial for FairMoney, and Smile ID delivered on this front. Regarding success rates for the BVN and government ID APIs, they consistently experienced uptime of over 99%. In addition, government ID fetching success ratios doubled from 45% to 90%, and successful BNV retrieval surged remarkably by 40% after integrating Smile ID.

  3. Separate environments: Smile ID offered distinct staging and production setups when testing out, providing dedicated environments for each. This separation proved highly beneficial for their engineering team.

  4. Dedicated dashboard: Smile ID provided a centralised dashboard allowing FairMoney to verify incoming details, monitor billing, and track all API requests in one place.

  5. Well-structured documentation: The engineering team at FairMoney appreciated Smile ID's well-structured documentation, offering clear guidance. A small pilot project allowed the development team to test the platform before total commitment, establishing trust in Smile ID as a long-term partner.

  6. Seamless API integration: The integration of Smile ID's API into FairMoney's backend was notably swift and seamless. It functioned as efficiently as any other API, optimising performance metrics without waiting time.

  7. Post-integration support: FairMoney appreciates Smile ID's robust post-integration support. The Smile ID team consistently provided updates on regulation changes and remained readily available to address downtime issues, ensuring ongoing assistance and peace of mind.

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Partnering with Smile ID

Smile ID's Enhanced KYC product has been instrumental in FairMoney's growth and the development of a secure financial ecosystem. Smile ID aligns perfectly with FairMoney's key selection criteria, providing tools for rapid user verification and comprehensive data to make informed customer decisions, enabling loans to be issued in under 5 minutes.

By verifying users and preventing fraud, Smile ID has helped maintain the integrity of FairMoney's financial services, fostering trust among users and merchants. This trust has encouraged users to rely on the platform for various transactions, knowing their products and finances are secure.

In an industry where speed, trust, and continuous expansion are essential for success, partnering with Smile ID has brought FairMoney closer to their goal of creating an integrated financial services ecosystem for Africans.

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Video Snippets

How FairMoney seamlessly integrated Smile ID's API

How FairMoney protects its customers from Fraudsters

Why Smile ID was the preferred choice for FairMoney

“We were dealing with numerous issues with our previous KYC provider, prompting us to seek out a more reliable alternative. We scouted the market for potential partners and engaged in several meetings and evaluations. Eventually, after a thorough review process, we decided to move forward and partnered with Smile ID at FairMoney and it has been seamless so far”

Ankit GuptaProduct Lead