Authorize more credit card transactions with confidence
Many declines for Non-Sufficient Funds (NSF) / credit limit exceeded occur when consumers go over their credit limits. Although the risk of default is generally low for authorizing one-off transactions beyond the limit, issuers frequently opt to decline these transactions due to a lack of visibility into the consumer’s broader financial position, including credit with other financial institutions or other spending habits. Research shows that 50% of US consumers have at least two credit cards, and 20% have five or more, indicating that there is often more credit available beyond the issuer’s radar.
Kipp enables issuers to selectively approve more transactions by collaborating with a wide range of merchants who have already registered to pay a premium when the issuer approves an over-the-limit transaction – offsetting the issuer’s credit risk. Each approved transaction is an opportunity – not a commitment – allowing issuers to manage risk on a per-transaction basis without altering the cardholder’s credit limit. The issuer is under no obligation to approve future over-the-limit transactions, which continue to be subject to its credit risk controls.
With the CFPB passing regulation that caps late fees, issuers appreciate the opportunity to earn more with merchant-paid premiums, offsetting the revenue losses from regulatory changes.
Benefits
Approve over-the-limit transactions
Safely approve over-the-limit transactions, using a predefined setup that allows merchants to pay you a premium.
Stay top-of-wallet
The increased authorization rate allows cardholders to make the purchases they want, driving customer loyalty.
Generate a new revenue stream
Generate a new revenue stream from merchants prepared to pay you a premium to approve card payments that take the user into a negative balance.
Meet your authorization rate KPIs with card networks
Reduce card declines and keep the card networks happy.
How it works
Innovative technology for Issuer-Merchant collaboration
Kipp’s tech platform fosters collaboration between issuers and merchants. How? Kipp enables both parties to communicate in real-time and at scale, leading to more successfully completed payments and new revenue streams.
Ask kipp
Answers to all your questions about Kipp
What type of cards does Kipp support?
All credit cards. Kipp also supports debit cards.
From a cardholder and issuer perspective, can a transaction be approved over one’s credit limit?
Card issuers may choose to authorize transactions that exceed a cardholder’s credit limit based on their assessment. This practice, known as a “shadow limit,” is applied on a case-by-case basis and not universally across all merchants or transactions. It typically depends on the issuer’s policies and the cardholder’s overall creditworthiness (amongst a range of other factors).
Who assumes financial liability of the overdraft?
The issuer. Network guidance remains the same – there is no change in liabilities. The default/credit liability remains with the issuer. For fraud chargebacks, the liability remains with the merchant, unless it is a 3DS transaction in which case the issuer carries the liability.
Does the cardholder experience a decline?
No, from a cardholder perspective the transaction will simply be an authorized transaction.
What happens if a transaction is authorized but not settled?
Kipp receives an indication from the issuer on the settlement of all transactions it was involved in through its API. A billing event will only be created upon settlement of a transaction.
i.e. the merchant will only be charged on transactions that were authorized (with Kipp’s involvement) and settled.
How does Kipp generate revenue, and what is its business model?
Kipp charges a fee to the merchant on top of the price that the issuer requests. For example, if an issuer sets an Ask price of 2%, Kipp will charge the merchant 2.5%.
How does Kipp's platform ensure there is no latency in approving legitimate transactions?
Kipp’s approval flow works outside of the network-based authorization flow and requires no additional action from cardholders. Legitimate transactions are seamlessly approved within less than 200 milliseconds without any latency or customer impact.
How many merchants does Kipp have as part of its network?
Kipp has extensive merchant coverage and can quickly add specific merchants upon request, without requiring any additional integrations.
How does an issuer set pricing on Kipp’s platform?
An issuer determines pricing based on a range of parameters eg. dollar amount, percentage beyond the credit limit, cardholder’s credit score, and many other factors deemed relevant by the issuer.
To enable easy setup and monitoring, Kipp provides issuers with a Control Center (portal), where issuers can segment their cardholder base and build pricing/scenario rules for situations when they might be prepared to accept an over-the-limit transaction.
