Embedded finance – Instant B2B Payments for SMEs

Embedded finance: At its core

At its core, embedded finance is about allowing organisations to extend their product through the use of financial services. Usually, businesses will achieve this through partnering with a speciality fintech company, which will take care of the technology and regulatory/licensing requirements needed for your organisation to thrive in this newfound digital world. Embedded finance allows organisations to provide instant payments, which provides a long list of benefits for SMEs.

The demand for Embedded Payments Post-Pandemic:

Over the last decade or so, the trends around embedded finance have gradually but steadily gained traction. It’s no secret that Covid-19 has exacerbated the demand for such services. While the industry was always going in this direction, global lockdown accelerated the necessity by many years. Although this was a big change for businesses initially and it produced many pain points, people began to see the advantages of operating digitally and investing in the development of embedded finance.

How embedded finance benefits SMEs:

Despite an increasing shift towards online payments, the B2B payment experience remains extremely outdated and slow, with many companies still depending on wires and cheques. The traditional business owner does not usually wake up and think to themselves, “what is the best way for me to accept payment?” Business owners mainly concentrate on improving their products or service and increasing their customer base. This means that a lot of organisations do not realise how embedded finance can increase customer satisfaction, save them time, and accelerate the business’s growth.

Customer satisfaction:

Embedded finance provides a seamless and instant payment method without the need to redirect and re-sell the customer to third parties, a current major source of friction for customers. The benefits embedded finance brings to your customers are very similar to the benefits it brings to you.

Saving time and headaches:

Embedded finance ensures businesses do not have to worry about regulations and do not have to deliver payments physically. This frees up a lot of time for owners and other employees to focus on different aspects of the business and prevents unnecessary headaches such as time spent invoicing processes.

Business growth:

The reliance on outdated payment methods by the majority of small to medium B2B businesses has drastically affected their cash flow and ability to scale at an optimum level. The use of embedded finance, would allow for quicker, easier access to funds, removing unnecessary blocks to their growth.

We have seen how much change there has been in the consumer market; people can now even pay for things with a watch. This change has slowly crept its way into the B2B market and shows no signs of slowing down. Seeing as 99% of the UK economy is based on small businesses, it is essential and sensible for these businesses to get in front of this and reap the benefits that embedded finance brings to the table.

By David Avgi, UNIPaaS