A small-dollar loan service for directly paying bills will soon be offered by Online Resources Corp. to its customer base of direct billers, including utilities and financial institutions.
The service is from BillFloat Inc. of San Francisco. That company said it partners with a nationwide network of registered lenders to offer the service through its bill payment and underwriting technology.
The proceeds of the loans are applied to bills owed to BillFloat's clients and partners, currently at 3% per month, a rate based on the FDIC's Small-Dollar Loan Template and much lower than that available from alternative sources of short-term loans, the companies said.
Online Resources said it will use the service to extend its own biller-direct presentation, payment and receivables solutions and help consumers avoid late fees, overdraft charges and more expensive loans.
"Together with BillFloat we can help our clients improve their cash flow, retain customers and eliminate the complexities and real costs associated with delinquency. Helping billers manage risk and improve the percentage of on-time customer bill payments is central to our business," said Robert Craig, executive vice president of e- commerce services for Online Resources in Chantilly, Va.
Ryan Gilbert, CEO of BillFloat, said, "By joining forces with Online Resources we will energize a market sector that has been impacted by the recession and starved of innovation for an extended period of time."
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