FIS and Kipp Launch First-to-Market Merchant-Funded Solution to Solve NSF Card Declines

FIS has partnered with Kipp to launch a first-to-market non-sufficient funds (NSF) authorization solution for debit card issuers. By allowing merchants to cover the cost of authorizing transactions with insufficient balances, the partnership aims to eliminate card declines at the point of sale, recovering lost revenue for issuers and merchants without imposing overdraft fees on consumers.

What was announced

FIS and Letskipp Ltd. (Kipp) have introduced a strategic partnership to provide a non-sufficient funds (NSF) authorization solution specifically for debit card issuers. This collaboration platform addresses the primary cause of card declines—insufficient funds—which traditionally results in lost revenue for both merchants and financial institutions. The solution is designed to streamline financial operations and reduce friction at the point of sale by reimagining the economic model of a transaction.

Under this new framework, issuers can approve transactions even when a customer’s available balance is insufficient. Instead of the consumer being charged an overdraft fee, the merchant can choose to pay a premium to authorize the transaction. This ensures the sale is completed, protecting the merchant from wasted time and lost product while helping the issuer maintain "top-of-wallet" status with the cardholder. Industry data cited by the companies indicates that NSF declines are a leading source of customer frustration and high contact center costs.

The offer is a first-to-market solution that connects debit accounts, card networks, and payment systems to move money dynamically. By automating this process, the partners aim to reduce the unpredictability customers face at the checkout and lower the operational costs associated with contact center inquiries regarding declined cards. The solution is currently being rolled out to FIS debit clients to help them recover revenue that would otherwise be lost to NSF declines.

"As money moves between merchants, companies, and financial institutions and card issuers, every transfer should be timely and seamless. This partnership underscores FIS' commitment to helping our clients unlock new revenue streams and deliver smooth payment experiences."

Jim Johnson, co-president, Banking Solutions, at FIS

The companies involved

FIS, listed on the New York Stock Exchange as FIS, is a global provider of financial technology solutions. The company operates extensively across the banking and payments sectors, providing the infrastructure required for financial institutions to manage core processing, card issuance, and merchant acquiring. FIS has a significant footprint in the global market, frequently updating its suite of tools to address shifting consumer behaviors and regulatory requirements in the debit and credit space.

Letskipp Ltd., operating as Kipp, is a collaboration platform designed to bridge the gap between card issuers and merchants. The company focuses on optimizing transaction approval rates and enhancing the relationship between financial entities and retailers. Kipp is a subsidiary of The Lifetime Value Company, a parent organization that oversees a portfolio of data-driven businesses. By positioning itself as an intermediary that facilitates communication at the point of authorization, Kipp seeks to resolve long-standing inefficiencies in the payments lifecycle, particularly those that lead to transaction abandonment.

What FF News has reported before

FF News has recently tracked FIS’s expansion into AI-driven financial tools and data clarity. In October 2024, the company released findings that UK Finance Leaders Struggle to Measure AI Value in Cash Management Despite High Adoption. This followed the launch of the FIS Launches Agentic AI Suite to Revolutionize Cash Flow Forecasting for CFOs, a move aimed at providing corporate leaders with better risk surfacing and cash visibility.

The firm has also focused on compliance and transaction transparency, having recently made the FIS Launches AI-Powered AML Investigations Agent to Slash Bank Compliance Costs commercially available. Furthermore, FIS worked to improve the debit experience earlier this year when FIS Integrates Spade to Provide Real-Time Transaction Clarity for Debit Issuers, allowing cardholders to see more precise merchant data.

What this means

This partnership represents a significant shift in the "who pays" dynamic of payment failures. By moving the cost of a low-balance authorization from the consumer to the merchant, FIS is effectively commoditizing transaction certainty. This puts pressure on traditional overdraft revenue models, which have faced increasing regulatory scrutiny globally. The move raises questions about how merchants will calculate the ROI of paying these premiums—essentially deciding which customers are valuable enough to "save" at the checkout. For the broader industry, it signals a move toward more collaborative, data-driven authorization processes where the binary "approve/decline" logic is replaced by a negotiated settlement in real-time.