Westlake Financial has digitized auto loan refund payments to save time and devote more resources to core operations.
The lender signed on with corporate payouts platform Onbe to replace its check-based program for auto loan overpayment refunds with a digitally based process, according to a Westlake release.
The digital program launched in mid-July has allowed Westlake to offer instant digital payments and new payout options, including virtual cards that can be spent immediately, John Mason, senior vice president of operations at Westlake, told Auto Finance News. Customers can also receive refunds via direct deposit or physical checks, he said.
“Our new refund program provides faster speed to payment with digital delivery and custom-branded experiences featuring popular payment choices,” Mason said.
When borrowers have a balance at the end of their loan term, they must receive a refund, a process that typically involves mailing paper checks, Tracy Monson, chief product officer at Onbe, told AFN. Digital refunds give lenders the ability to offer an instant payout through a virtual card delivered through e-mail or payments sent to digital wallet providers such as PayPal or Venmo, she said.
“The refund program cuts costs and reduces fraud, while prioritizing cardholder security,” Monson said.
Onbe manages state regulations for lenders that use the company’s digital refund technology, Monson said. The company provides customized payout options for financiers across multiple industries, she said.
Integrating digital refunds
Westlake first integrated Onbe’s batch file processing capabilities but has plans to use the fintech’s APIs down the road for “more flexibility,” Westake’s Mason said, without providing specifics. The financier had been using a check processor for refunds, he said.
“Westlake has nearly eliminated the labor and operational costs of issuing refunds, leaving more time and resources to focus on its core business activities,” he said.
Customers who have their email on file with Westlake receive same-day communication regarding their refund, rather than through the mail, Mason said.
“Consumer demand for digital payouts is driving an especially large opportunity for auto lenders to leverage cost-effective, fast and secure payout options for lessees and car buyers,” Onbe’s Monson said.
Onbe is the latest fintech Westlake has turned to in its effort to streamline operations. Westlake is using Pagaya Technologies’ AI-driven decision-making capabilities to improve decisions on loan applications and expand its reach. Westlake is also piloting direct-to-consumer digital financing options.
Los Angeles-based Westlake Technology Holdings has approximately $24 billion in assets under management and originates auto loans through auto and powersports dealers, according to Westlake.
— Additional reporting by Riley Wolfbauer