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In the past few years, one key idea has been dominating fintech: embedded finance. Describing the integration of financial services into businesses via API, it was originally estimated to be worth $7.2 trillion by 2030, over 10x its value in 2020.
However, this has recently been updated due to research by Bain and Company, which expect its value to reach $7 trillion by 2026, with a surge in B2B adoption being a key reason it is outperforming its already astounding predictions.
What you need to know is this: it’s becoming increasingly popular for B2B business and it isn’t slowing down any time soon. But be warned - not all embedded finance providers are the same. Their approach and requirements can differ, so it’s important to know exactly what you’re getting before you partner.
In this article, we outline the UNIPaaS approach to embedded finance. If you have any questions, don’t hesitate to get in touch.
While embedded finance can be defined as integrating financial services directly into a business, without the need for additional licensing, exactly what this integration looks like is up for interpretation.
For some embedded finance providers, financial flows are technically integrated, but they still redirect your customers to a third-party site to complete the action. At the very least, this may be a payment screen, which is completely off-brand and ill-fitting for your service.
This creates unnecessary issues. The aforementioned disruption in terms of your own designed flows and brand is obviously not ideal from a UX perspective, but what’s far worse is the loss of data your business can experience. If you are a B2B SaaS platform and your clients are directed to a third party to complete onboarding, you have no visibility of any complications in that process. If potential clients are not signing up due to a fixable part of the flow, you have no way of knowing.
Transactional data is also highly valuable. If you can see how your clients are using your service you can offer them a service which may better suit them, such as different subscription tiers. Again, if a third party fully controls the payment flow, you can lose all access to that data.
With UNIPaaS, all financial services are fully embedded and white-labelled. You retain all of your data and can design flows as you see fit. What’s more, you are able to create actions based on that data. For example, if you are a platform providing invoice and payment services for small businesses, you may want to send them an alert offering them a short-term loan when their balance drops below a certain level.
There are other services out there that will provide you with a fully embedded solution, but it will require a high level of work from your developer teams.
Stripe, one of the world’s largest payment providers, is upfront about this. They state on their website that for a ‘custom solution’ (an embedded solution which enables your business to use financial services as you wish), the level of technical input required is ‘very high’.
What this means for your business depends on the size of your developer team. For many SMEs, this is simply infeasible. For well-financed businesses that are considering hiring more developers, this is not as easy as it sounds. According to RPI, there is currently a shortage of developers with the requisite skills in fintech to match demand.
The UNIPaaS solution was designed to be integrated by teams of all sizes. Small businesses can massively benefit from embedded finance, it makes no sense to reserve access to enterprise businesses only.
We have different tiers to our approach, and the ‘low code’ option enables companies with the limited technical capacity to embed financial services with as little as one line of code. Businesses are also able to embed services as ‘widgets’. For example, you may want to offer the sellers on your platform eWallets as a form of a bank account. Instead of integrating an entire financial infrastructure, you are just getting what you need, which can be adapted over time.
What does the UNIPaaS approach to embedded finance look like in practice? Take the software company IRIS Pay. After integrating financial services with UNIPaaS, IRIS Pay customers can now send invoices to their clients and partners with a payment link embedded within it.
Combined with UNIPaaS’s instant payment processing, this drastically increases the speed at which businesses get paid and has significantly enhanced IRIS Pay’s offering.
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Ultimately, embedded finance should bring your business potential. For accountancy software businesses and B2B SaaS platforms, in particular, embedded finance offers so much opportunity.
We believe that an approach which respects different technical capabilities and truly embeds financial services is the best way to unlock that potential. That’s embedded finance the UNIPaaS way.
UNIPaaS Financial Services Limited is regulated by the Financial Conduct Authority (FCA) as an Authorised Payment Institution (No. 929994). UNIPaaS is certified as PCI DSS service provider Level 1.
