The Powered by Modulr series celebrates the innovative ways our customers use our infrastructure in their mission to build the Instant Economy.
A marketplace for life-long learning, Knoma promises to revolutionise education with its learn now, pay flexibly approach. Its goal is to break down the barriers to digital inclusion and to make education accessible to anyone ready to embrace the technological revolution; and all with a simple, zero-interest payment solution, powered by Modulr.
A Smarter Way to Learn
The widespread adoption of new technology means that the world is advancing rapidly, so much so that the rate of technological change is fast outpacing human skills; resulting in a digital skills gap which is estimated to cost the G20 economies $11.5 trillion by 2028. For Knoma founder and CEO Brett Shanley, the solution seemed obvious; short but frequent data-led courses from leading tech or coding schools were the key to bridging this skills gap and ensuring the workforce stays equipped for a modern digital economy. But courses are often expensive and financial options and support limited, with most requiring high interest loans.
Shanley envisaged a fairer, more equitable way for users to pay for their education and set out to build an offering which was interest and fee-free, as well as being motivating to users wanting to continue their lifelong learning journey.
Finding a payments partner that could deliver
In today’s rapidly changing landscape, it stands to reason that the way we consume education must change too. Shanley saw an opportunity to differentiate his offering from that of the interest-bearing student loan companies with their focus on traditional learning, or the finance providers with no vertical alignment to the education sector.
Knoma would go to market with a proposition that was 100% designed and built for the education space and, as a new business, it would be able to build both its proposition and its technology stack from scratch; partnering with best-in-breed service providers like Modulr, from day one.
“Knoma wants to become the number one finance provider and ecosystem for lifelong learning globally. We knew we wanted a modern payment processing partner and Modulr was recommended to us by a number of businesses in the lending space. We liked Modulr’s API-first approach and felt it would be an excellent fit,” said Shanley.
Knoma, which recently raised £21m in investment, also knew that there was no place for outdated payment processes, which may take days for payments to clear, within its platform; with Shanley rightly predicting that the traditional payments architecture would simply not be able to cope with the company’s need for instant, real time reconciliation, nor with the course providers demand for prompt, upfront payment.
“Reconciliation of payment, both outbound and inbound, was a key priority for Knoma to ensure the loan management system (LMS), Xero (our accounting platform) and the CRM system are completely aligned. Without having complete synchronisation, it would be an operational mess,” Shanley explains. “Our education partners also require their payment upfront, within 24 hours of the student being accepted for the course. We were confident that with Modulr’s innovative platform and its direct access to the Faster Payments Service we could overcome such challenges,” he said.
A purpose-built partnership
Modulr has delivered a payments innovation to fit Knoma’s specific business needs; enabling it to quickly and cost effectively launch and differentiate its business, with no complex technical builds. Thanks to Modulr, Knoma has been able to embed payment efficiency into the heart of its proposition; offering full transparency of payments, faster movement of money and reconciliation of data.
“Offering an embedded finance solution within a wider ecosystem designed to drive lifelong learning means we are completely aligned with the needs of the education sector; all while ensuring that the Knoma experience is not only interest and fee-free for our users, but also seamless and effortless.”
The Knoma platform is designed to be a frictionless experience, allowing users to easily search the online education marketplace, find a course, choose a flexible repayment schedule that works best for them and complete the purchase using the ‘Pay with Knoma’ button.
Meanwhile behind the scenes, with Modulr’s digital payment account at the core, Knoma harnesses Modulr’s 24/7 payments infrastructure and direct participation in the UK’s Faster Payments scheme and SEPA, the European-wide payments scheme, to facilitate real-time payments out into its education partner accounts, well within the 24 hour period demanded. In addition, Modulr’s direct debit service makes it simple for Knoma to set up and automate collections from students repaying their loans*; giving it visibility over cash flow, with notifications made as soon as funds are collected.
An ecosystem for lifelong learning
Not only has Modulr’s plug n play approach enabled Knoma to launch quickly and to roll out payments operations efficiently and effectively, it has also provided a platform that will develop, as Knoma grows and Modulr continues to innovates.
In the near future, Knoma will be adopting Modulr’s new Payment Initiation Service to allow students to make direct bank-to-bank transfers in a seamless manner.
Introduced under the UK’s 2018 Open Banking reform package, Payment Initiation is a new fast and secure way to accept payments; offering Knoma a cost-effective alternative to card payments and bank transfers and giving them the functionality to redirect end users to their bank or building society to complete the transaction. Payments settle in real-time with receipt notification and it offers a lower rate of fraud or chargeback, as customers authenticate through their own bank. Plus, the loan reference is automatically embedded, so repayments won’t get lost or misdirected and accounts can be reconciled easily.