For better or for worse, modern society has adapted to expect things instantly. We want a quick lunch delivery, a fast Uber pick-up, and we expect Netflix to buffer our movies in microseconds. Even Amazon’s two-day shipping takes too long.
Recognizing the value of the real-time economy, Orum launched its flagship product, Foresight, last week. The new tool helps banks move money in real time for instant account funding, overdraft protection, and consumer-focused pre-delinquency tools.
Instead of leveraging the blockchain for real-time transfers like Ripple does, however, Orum takes a different route. The startup uses AI to predict the availability of funds within an account and pre-authorizes transactions, incurring limited risk.
“At Orum, we are creating a paradigm shift for the way money moves,” said Orum founder and CEO Stephany Kirkpatrick. “We are leaving behind siloed accounts and manual transactions and building toward fully automated and point-to-point money movement. Technology has created an on-demand economy, but our money has yet to catch up.”
In addition to Kirkpatrick, Orum’s team includes former N26 employee Ryan Cooke and former Stash VP Christine Hurtubise.
Along with Orum’s new product announcement, the New York-based company landed $5.2 million in Seed funding led by Homebrew with contributions from Inspired Capital, Acrew, Bain, Clocktower, Box Group, and angel investors. Impressively, the round was both opened and closed during a pandemic.
“Today’s tools for immediate money movement leave enterprises decades behind what customers demand. Orum is tackling this challenge head on,” said Homebrew Partner Satya Patel. “We’re excited about Orum’s vision. The early demand they’ve seen—both from cutting-edge fintechs and incumbent financial institutions—speaks for itself. It’s clear the market understands the value of moving money in a new, more efficient way.”
According to Crunchbase, Orum is already working with 50 customers and has a waiting list.
The incumbents in the real-time payment (RTP) space in the U.S. have seen some traction, however none have seen widespread adoption. Aside from Ripple, other players working on RTP solutions include The Clearing House, which launched its RTP scheme in 2017 and now counts 32 banks and 19 technology providers as clients. According to Forbes, however, fewer than half of these members are operational on the RTP platform.
The U.S. Federal Reserve is also in on the game, having announced its own RTP scheme, FedNow, last year. Since its announcement, there has been much debate within the fintech industry over whether or not the government can effectively compete with the private sector with real time payments. However, given the lack of traction in the area, the Federal Reserve ultimately decided to pursue FedNow. In true government fashion, however, the offering is not slated to launch until 2023 or 2024.
Remember how society expects everything to happen instantly? The slow traction of incumbent players in the RTP space isn’t meeting expectations. That said, there is a lot of room for Orum in the RTP space and I think we’ll be hearing about a lot more traction from them in the second half of this year.
Photo by Volodymyr Hryshchenko on Unsplash