Blend Partners with Astra to Enable Near-Instant Deposit Account Funding

Rhea-AI Summary

Blend, a leading digital banking solutions platform, has partnered with Astra to enhance deposit account funding for consumers. This collaboration aims to accelerate account funding and promote deposits growth for Blend Deposit Account customers. The partnership introduces debit card funding as a more convenient alternative to traditional ACH transfers, offering a quicker and more seamless account funding process.

Key benefits include:

• Accelerated onboarding
• More activated accounts
• Reduced abandonment rates
• Smoother application experience
• Less manual intervention for support teams

Data from Blend's customer base shows strong consumer preference for card funding, with adoption rates of 82% and 66% reported by two major credit unions.

Positive

• Partnership with Astra to enhance deposit account funding experience
• Introduction of debit card funding as a more convenient alternative to ACH transfers
• Potential for increased account activation rates by up to 30% on day one
• Strong consumer preference for card funding, with adoption rates of 82% and 66% reported by two major credit unions
• Quick integration timeline of 2-4 weeks for financial institutions

Negative

• None.

Insights

Financial Analyst

This partnership between Blend and Astra is strategically significant for both companies and the broader fintech sector. By integrating Astra's Card to Account payment solution into Blend's Deposit Account application flow, Blend is addressing a critical pain point in the account opening process. The potential for increased conversion rates and reduced abandonment during account funding is substantial, with data showing 66% to 82% of consumers preferring card funding over other methods.

From an investor's perspective, this move could positively impact Blend's revenue streams by potentially increasing the number of successfully opened and funded accounts for their financial institution clients. The partnership also positions Blend more competitively in the digital banking solutions market, potentially leading to increased market share and customer retention. However, investors should monitor the implementation costs and any revenue-sharing agreements with Astra to fully assess the financial impact.

Market Research Analyst

The partnership between Blend and Astra taps into a growing consumer preference for seamless digital experiences in banking. The high adoption rates of card funding (up to 82%) among Blend's customers signal a strong market demand for this feature. This aligns with broader fintech trends towards frictionless onboarding and instant gratification in financial services.

For investors, this move indicates Blend's responsiveness to market needs and its ability to innovate through strategic partnerships. The potential 30% improvement in activation rates on day one is a key metric to watch, as it could translate to significant growth for Blend's clients and, by extension, Blend itself. However, investors should also consider the competitive landscape, as other fintech players may seek to replicate this functionality, potentially eroding Blend's competitive advantage over time.

Tech Expert

The integration of Astra's Card to Account payment solution into Blend's platform represents a significant technological enhancement to the account opening process. This API-driven approach allows for near-instant account funding, addressing a major friction point in digital banking. The quick activation timeline of 2-4 weeks suggests a well-designed, modular integration that can be rapidly deployed across Blend's customer base.

From a technical perspective, this partnership likely involves complex backend integrations to ensure secure, real-time transactions between various financial systems. The success of this integration could pave the way for further innovations in Blend's platform, potentially opening up new revenue streams through additional fintech partnerships. Investors should consider the scalability and security of this solution, as these factors will be important for widespread adoption among Blend's diverse client base of financial institutions.

Partnership to accelerate account funding and promote deposits growth for Blend Deposit Account customers

SAN FRANCISCO--(BUSINESS WIRE)-- Blend, the leading platform for digital banking solutions, today announced a new partnership with Astra, the pioneer in instant payments-as-a-service, to enhance the digital onboarding experience for consumers looking to quickly and seamlessly fund their new deposit account.

For Consumers: A More Frictionless Deposit Account Opening Experience

One of the most common challenges preventing consumers from funding their deposit account within a single session is the lack of optionality and convenience in funding methods. Traditionally, ACH transfers have been the primary method for account funding, but as digital payment methods evolve, banks and credit unions are increasingly offering debit card funding as a more convenient and user-friendly alternative for consumers.

By eliminating the need to find and enter routing and account numbers that are required with ACH transfers, debit card funding offers a quicker and more seamless account funding process, enabling consumers to activate new accounts for use in a single session.

Additionally, consumers with limited funds face a higher risk of overdrawing their accounts when using ACH, which can lead to additional fees. Debit cards help avoid this risk by only allowing transactions up to the available balance. Debit card transactions typically also result in immediate or near-immediate access to funds, while ACH transfers can take a few days to process.

For Financial Institutions: More Accounts Funded, Faster

By integrating Astra’s Card to Account payment solution directly within Blend’s Deposit Account application flow, Blend customers are able to drive digital engagement beyond just the initial application capture, helping to reduce abandonment rates and increase the speed it takes for consumers to complete an application. And for internal support teams, that means less manual outreach and follow ups to get accounts fully funded, and more time deepening customer relationships.

“Today consumers expect a frictionless, real-time product experience, and that starts at account opening,” said Gil Akos, Co-Founder and CEO of Astra. “Financial institutions and fintechs need to deliver a best-in-class onboarding flow to win new customers – instant account funding is the perfect solution, leading to improved activation rates of 30% or better on day one. We're proud to partner with Blend to offer this experience to their customers.”

Benefits of card funding:

• Accelerated Onboarding: Allow new accounts to be funded sooner by removing friction in the application process.
• More Activated Accounts: Convert consumer interest into more activated accounts by offering multiple account funding options.
• Reduced Abandonment: Reduce the likelihood of consumers abandoning the process by driving digital engagement beyond just the application capture.
• Smoother Application Experience: Consumers report a smoother application experience with user-friendly funding options like debit cards.
• Less Manual Intervention: Support teams spend less time doing manual outreach and follow-ups to get accounts fully funded when consumers have multiple funding options to choose from.

Strong Consumer Preference for Card Funding

As shown through data from Blend’s vast customer base (which includes 140 of the top 1000 depository institutions by deposit assets as of Q2 2024), card funding is one of the most popular options selected by consumers when opening up a new deposit account:

• One of the nation’s largest credit unions by asset size and a Blend customer, reported that 82% of their new deposit accounts were funded using Astra card funding, significantly outpacing four other available funding methods.
• Another Blend customer and one of the top 100 largest credit unions in the United States showed that 66% of consumers prefer Astra Card funding over other funding methods.

Availability

Card funding for Blend Deposit Accounts is now generally available for all customers. With an activation timeline of just 2-4 weeks, financial institutions can quickly integrate this feature into their account opening processes. If you are interested in adding card funding to your deposit accounts, please visit Blend Deposit Accounts for more information.

About Blend

Blend (NYSE: BLND) is the infrastructure powering the future of banking. Financial providers— from large banks, fintechs, and credit unions to community and independent mortgage banks—use Blend’s platform to transform banking experiences for their customers. Blend powers billions of dollars in financial transactions every day. To learn more, visit blend.com.

About Astra

Astra offers advanced payment infrastructure, powering faster transfers for fintech products, financial institutions, and enterprises. Astra’s proprietary, vertically integrated API enables developers to offer instant payments and accelerated bank transfers, with built-in optimizations to reduce risk. For more information, visit astrafi.com.

Forward-Looking Disclaimer

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements generally relate to future events, future performance or expectations and involve substantial risks and uncertainties. Forward-looking statements in this press release may include, but are not limited to, our expectations regarding our product roadmap, future products/features, the timing of new product/feature introductions, market size and growth opportunities, macroeconomics and industry conditions, capital expenditures, plans for future operations, competitive position, technological capabilities and strategic relationships, as well as assumptions relating to the foregoing. The forward-looking statements contained in this press release are subject to risks and uncertainties that could cause actual outcomes to differ materially from the outcomes predicted. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other comparable terminology that concern Blend’s expectations, strategy, plans or intentions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which such performance or results will be achieved, if at all. Further information on these risks and uncertainties are set forth in our filings with the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available to Blend and assumptions and beliefs as of the date hereof. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. Except as required by law, Blend does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805329548/en/

Chloé Demeunynck

Corporate Communications

press@blend.com

Source: Blend

FAQ

What is the purpose of Blend's partnership with Astra for deposit account funding?

The partnership aims to accelerate account funding and promote deposits growth for Blend Deposit Account customers by offering a more convenient debit card funding option alongside traditional ACH transfers.

How does debit card funding benefit consumers opening deposit accounts through Blend (BLND)?

Debit card funding offers a quicker and more seamless account funding process, eliminating the need for routing and account numbers, reducing overdraft risks, and providing near-immediate access to funds.

What percentage of consumers prefer card funding for new deposit accounts according to Blend's (BLND) data?

According to Blend's data, one major credit union reported 82% of new deposit accounts were funded using Astra card funding, while another reported 66% of consumers preferring this method over others.

When will card funding for Blend Deposit Accounts be available to financial institutions?

Card funding for Blend Deposit Accounts is now generally available for all customers, with an activation timeline of just 2-4 weeks for financial institutions to integrate this feature.