Whether it’s Global Processing Services customers Zilch, WeLab, or another business, it’s likely you use embedded finance regularly. You’re just minutes away from discovering just what embedded finance is and how it’s increasingly filtering into our everyday lives.
What is embedded finance? When non-financial businesses offer financial options to their customers. They do this through their own technology or third-party tech.
A merchant offering Buy Now, Pay Later is an example of embedded finance. Think about a shopper buying a new coat online. They can simply pay with a Buy Now, Pay Later provider, like WeLab, which is offered to them as a method at checkout. Another example is where car lift companies take a payment through the app so customers don’t pay the driver with physical cash. This can make things easier for the customer, the driver and the company.
Our partner Currencycloud help to embed finance into the core of businesses – no matter what industry. And you can see the upward trajectory in the sector through their growth - since 2012, Currencycloud has processed more than $100 billion to over 180 countries. Weavr is another big name in embedded finance. The embedded banking provider was selected as part of Tech Nation’s Fintech 4.0 cohort for 2021/22, and in 2021 announced a £7 million seed funding.
With Banking-as-a-Service, any business could potentially integrate financial services into what they offer their customers. GPS partners, like Mambu who service more than 200 customers, with over 53 million end users, who help to enable embedded finance and offer Banking-as-a-Service.
So what’s Banking as a Service (Baas)? Businesses who have embedded finance will often use a Banking-as-a-Service provider to add banking capabilities to their business.
Why is embedded finance key? Firstly because it is increasing in popularity. Think about the last few times you took out a new financial product or bought something. Chances are one of those occasions was actually via an embedded finance solution. Perhaps you tipped your delivery person through the app after they dropped off your food, or maybe you took out insurance when you bought your new phone.
The fact embedded finance can make transactions and financial decisions easier for customers, results in an uplift in customer satisfaction for businesses so they’re more likely to be loyal and make repeat purchases. Plus there’s an anticipated revenue boost for businesses too – European brands expect embedded finance to add an additional €720.78 billion in revenue over the next five years.
It’s already surging in growth globally. In Asia from 2020 to 2025, embedded finance could grow by as much as 60 percent a year in products ranging from embedded payments to insurance and lending. It’s predicted that the value of the embedded finance market will exceed $138 billion in 2026.