Money moves
Objective-driven, user-centred, iterative design of an intuitive business banking feature
lead product designer
Jun-Jul 2023
figma
Context, Problem & Objective
Context: Kody as a payments facilitator
The traditional Payfac funds flow:
Delayed payout
High interchange and banking fees
Cumbersome accounting processes
Limited value-add for Kody
“KodyCards” for business expenses
Business debit cards issued with our partner acquirer bank
Instant access to takings, easy to spend on business expenses
What’s the problem?
Some merchants love having instant access to their funds.
But less than 10% of merchants are actively using the cards pay for expenses.
Even amongst merchants who are using the cards, they are spending a small percentage of their total processed volume.
Problem Statement
Very few merchants have adopted our recently launched card solution. Most still receive their payouts directly to their accounts. This is a problem because the funds are delayed, the interchange fees are high and the accounting is decentralized. It’s also a problem for Kody’s positioning relative to competitors who offer alternatives.
Objectives
What’s our main user-centred objective, and what are the business objectives?
Reduce costs and streamline funds flow for merchants
Generate revenue and build brand value for Kody
Success Metrics
We want to increase adoption and total volume of funds spent using Kody.
5x
merchants spending funds within Kody ecosystem
30%
increase in funds spent using Kody payment methods
Discovery, Research & Definition
How Might We
Optimize our funds flow ecosystem to retain a higher percentage of funds within the Kody platform, thereby enhancing merchant loyalty, increasing revenue, and delivering a seamless and cost-effective solution?
In-depth Interviews
As always, our process started with our users. How do they currently manage their funds? What’s the problem with our debit card? Why aren’t they using it for all expenses?
The Main Pains
Transfers
For most of our merchants, it turns out that the majority of their spending behaviour is through bank transfers, not card payments.
Access
Until now, all of our KodyWallet features have only been available on web - some users are most comfortable banking on mobile.
Expenses
Several merchants are using platforms like Pleo to empower their staff to handle payments, these expense platforms are mature and feature rich.
Spending Types
We estimated that for most merchants this accounted for upwards of 60-80% of their monthly spending.
Popular for high-value, regular payments like rent or utilities. High value, low frequency.
A much smaller portion of monthly expenses (less than 5%) crossed borders, although this is likely to grow as we scale and internationalize
Accounting for a much lower percentage of overall expenses in this particular industry, incumbents offer very attractive reward programs.
Competitor Analysis
Business banks
The majority of our merchants banked with either Revolut, Wise, HSBC or NatWest with a smaller portion banking with Lloyd’s, Santander and Barclays.
Domestic transfer features
User authentication for safe and secure payments
Sending funds between accounts using sort code and account number (SCAN)
Verifying payees using their personal or business name against the SCAN
Saving payees to easily pay again
Management capacity to review and approve or reject requests
Ability to schedule future transfers and create repeating/recurring transfer events
Technical and compliance constraints
APIs, backend not ready yet
Transfer instrument not yet available. We knew that this type of transfer wasn’t yet supported through our partner institution, but were fairly confident it would be within 4 weeks.
Payee verification APIs unavailable. This work would begin once the transfer instrument was available, so this function can’t be a part of the first release without some delay.
Limited engineers and developers In many cases, the team would be limited to 1 or 2 front-end or back-end engineers at a time, so things like setting up a system for payee management and a system for scheduling transfers couldn’t be developed in parallel and would have to be worked on in sequence.
Domestic transfers require SCA Due to some other technical limitations, we could only offer strong customer authentication through our mobile app
Design & Delivery: Diagrams to Impact
Task flow diagramming
Consensus: an approved MVP
Considering all of our currently known technical constraints and taking into consideration the leaders of the industry and their standard workflows, we considered several options and landed on a simplified transfer flow.
Low-fidelity wireframes
Hi-fi MVP
Beta Launch
Wins
Approximately 20% of our merchant-base signed up for the beta, including some that had not adopted any KodyWallet/Issuing features yet
Learnings
Payee verification is more necessary than previously thought: We underestimated the risk of making mistakes with payee information, resulting in several failed transfers.
“Transfer type” step is confusing: Anecdotal feedback from several merchants, plus unnecessary backtracking in user testing indicate that the three types of transfers confusing - want to try to combine the transfer types with the payee if it’s intuitive.
Approvals deprioritized: We found that most merchants had only enrolled one super-users anyways, making it much less useful to develop the approvals feature next - we decided to focus in on payee management instead.
V2 - Payee Verification
Fast-follow Improvement: Reducing Errors
Wins
Zero failed transfers due to incorrect payee details, saving preferred payees saves time when making transfers, say merchants.
Learnings
Despite an additional step for verifying payees, the time to complete and percentage of error-free transfer attempts seem both to have improved.
Now that it’s been proven to work smoothly, manager/owner users are getting more and more interested in providing staff with access to transfers.
V3 - Transfer Approval
Continuous Improvement: Controlling Spend
Wins
Several active stores created new users in the week following this release, coinciding with an increase in overall spend through the transfer feature.
Learnings
Transfers don’t expire, but there have been instances of transfers not being approved resulting in late payments. Ensuring that managers know they need to approve a transfer is crucial.
Impact & Conclusions
Knowing that this product launch was incremental one of the main success metrics was seeing growth after each iteration. Every deployment could be associated with increases in users and gross transactional volume.
Merchants who were already using KodyCard, on average, increase from under 10% to over 40% of all revenue volume, in some cases, passing through Kody payment instruments, rather than being paid out to merchant bank account.
We increased from approx. 10 active merchants to approx. 25 regularly active merchants, however average number of users increased from 1.5/store to 4/store.
Next steps
Scheduled and recurring transfers
The ability to set a transfer to occur at a future date, and to set transfer events which repeat at some regular interval is the next feature to be added to our business banking app.
Reading statements and predicting transfer events
We’re actively investigating an opportunity to leverage an AI service to scan new merchants existing bank statements to suggest payees and recurring transfers.