The safe way to extend debit card overdrafts and generate a new revenue stream
Some banks offer fee-free overdraft programs based on cardholder direct deposit history, account activity, and other risk-based factors. When a debit transaction exceeds the cardholder’s set overdraft limit, issuers typically decline the transaction even though the risk is minimal as it is limited to the transaction amount. This cautious approach can lead to decreased transaction volume and diminished customer loyalty, negatively affecting both the bank and the customer.
Other banks charge overdraft fees when a transaction exceeds a cardholder’s account balance. With proposed CFPB regulations set to cap overdraft fees, issuers are exploring innovative ways to replace this revenue before October 2025.
Kipp connects registered card issuers and merchants with the common goal of reducing declines when cardholders exceed their account balance. The technology allows you to approve more transactions by collaborating with merchants who compensate you for accepting payments beyond set overdraft limits. Approvals are on a per-transaction basis and do not affect the cardholder’s credit or overdraft limits. You retain full control over future transactions, maintaining standard debit risk protocols.
Benefits
Approve overdraft transactions
Provide cardholders with additional overdraft facilities and safely offer overdraft facilities to more of your customer base
Unlock 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
Reduce declines & stay top-of-wallet
Approving more transactions means higher customer satisfaction while reducing costs associated with declines
Ask kipp
Answers to the most common questions about Kipp
What type of cards does Kipp support?
All debit cards. Kipp also supports credit cards.
Does using Kipp to approve occasional over-the-limit transactions on a debit card classify it as a "Credit Card" under Regulation Z?
No, using Kipp to approve occasional over-the-limit transactions on a debit card does not classify it as a “Credit Card” under Regulation Z. The debit card remains a debit card, even with the occasional negative balance transaction approval.
Does a cardholder need to have already enrolled in an overdraft program for Kipp to work?
Not necessarily. Each issuer will have its own Terms & Conditions related to accepting negative balance transactions. Kipp enables an issuer to offset some of the risk of accepting a negative balance transaction by having a merchant pay a premium (generating a new revenue stream) to reduce some of the default risk accepted by the issuer.
How many merchants does Kipp have as part of its network?
Kipp has established 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. To enable easy set up 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.
