Lloyds Bank is to collaborate with UK fintech Blue Motor Finance in developing an application programming interface (API) to deliver instant payments to individual motor traders and dealerships.instan

Established in 1992, Blue Motor Finance specialises in auto finance products that have reached over 100,000 customers, with £1 billion lent so far to motor traders and dealers. The company was ranked first on the FT1000 Europe’s Fastest Growing Companies annual rankings in March 2019 and completed its first auto loan securitisation with Citigroup in April.

The Financial Times reported in March that the company’s private equity owner, Cabot Square, was in talks with investment bankers about a potential £200 million sale of the fintech, which could see it acquired by a larger private equity group or established lender. Blue Motor Finance has enjoyed rapid growth since 2014, when Cabot Square invested £30-40 million in the fintech.

Lengthy relationship

According to reports, Blue Motor Finance has a longstanding relationship with Lloyds and there are plans to build on this further, to bring instant payments to the car finance market for the first time.

The two will now collaborate to create the ‘Faster Payments and Direct Debit API’ technology. Through the partnership, loans agreed between Blue Motor Finance and Lloyds Bank will be processed in real-time, enabling customers to receive funds within minutes.

“The instant payments system is a landmark moment for Blue Motor Finance and for the entire car finance industry,” said its chief technology officer (CTO), Charlie Barker.

“For the first time, it will mean that our customers will be able to make critical investment decisions, including at a vehicle auction, for example, with the knowledge that they’ll receive cleared funds in their account, potentially within two minutes.

“Lloyds has been a fantastic partner and we’re looking forward to bringing this product to the market.

Steve Everett, MD, payments and cash management, Lloyds Bank Commercial Banking added: “At the Lloyds Bank Commercial Banking API Lab we’re committed to bringing the full potential of digital to the forefront of financial services.

“We’re excited to partner with Blue Motor Finance to bring this innovative instant payments service to its motor trader customers, and create real value for businesses in the car financing industry through new API-enabled solutions.”