Why Embedded Finance is the Next Evolution in Fintech

Welcome to the world of embedded finance. It is the evolution of fintech, bringing radical changes to digital banking and payment ecosystems. Future embedded finance services are anticipated to exceed $183 billion by 2027, with growth driven globally by innovation, rate of adoption and new revenue opportunities for non-financial organisations. And this growth will, says Bain & Company, be driven by the proposition of ‘better together’, where customer experiences and access to financial services are transformed, and where businesses benefit from reduced risks and costs.

Fintech - a portmanteau of finance and technology - has been reshaping the boundaries and capabilities of financial institutions and transactions for decades. Embedded finance, reliant on digital and innovation, has evolved from the foundations of fintech to provide platforms and marketplaces with the tools they need to expand revenue streams and increase customer stickiness without becoming licensed financial institutions.

Five Reasons Why The Future of Embedded Finance is Now!

Embedded finance is evolving and offers some impressive benefits. Here are some of the best.

1. The Flexibility of Embedded Finance

Embedded finance is described by McKinsey as the most promising for the future, especially for enhancing commerce journeys and ‘integrating finance products into non-finance ecosystems’. Leveraging the capabilities of APIs and customised integrations, embedded finance solutions can be seamlessly injected into different ecosystems to create customer journeys that resonate and create stickiness. For example, many businesses are already using embedded finance to offer their customers the ability to pay with a variety of third-party payment processors.

The payment solutions that emerge from the foundations of embedded finance are flexible and accessible. For platforms and marketplaces, it allows them to build a flexible payment architecture that simplifies and streamlines payment experiences. For customers, it makes it easier for them to manage marketplace payments within a centralised ecosystem.

2. White-labelled Branding is the Future of Embedded Finance

Developing a comprehensive, holistic, secure and compliant embedded finance ecosystem with many moving parts is expensive [link to our blog post]. However, thanks to its ubiquity and popularity, there has been an equal surge in solutions allowing platforms and marketplaces to white-label their functionality to achieve exactly the same results. A well-designed white-labelled embedded payment solution will also hand you another critical success metric – transformed user experiences. By making it easy and convenient for customers to pay, you can improve their overall satisfaction with your platform or marketplace.

UNIPaaS has a proven track record as a white-labelled embedded finance solution and has been used by multiple organisations to create an independent payment engine designed to help you embed financial services seamlessly into your digital platform without losing control over your brand. When your solution is seamlessly integrated and comprehensively white-labelled, your brand remains at the front and in your control. As an added bonus, you gain access to a comprehensive kit of services that you can integrate into your digital platform without the costs.

3. Putting the Power Back in Your Hands

Embedded finance puts the power back into the hands of the platforms and marketplaces as they can create payment ecosystems that fit the needs of their customers while their customers enjoy the benefit of being able to make and manage payments on their terms. This doesn’t quite capture the full value of this technology, though…

Juniper Research defines it as the route companies can take to solve ‘genuine challenges targeted specifically at their customers’ so that they don’t lose out to competitors. Bain captures the other side of the coin, where embedded payments empower customers, allowing them to develop better relationships with financial providers while enabling them to feel more engaged with the platforms and marketplaces they use. The firm’s research also found that embedded finance allows platforms to reduce costs for their customers and create cross-sell opportunities that can improve overall customer stickiness and reduce risk.

Customers also hugely benefit from the fact that they can manage their real-time cash flow and payments in one central space - their platform or marketplace of choice - meaning they need fewer passwords and usernames, fewer tabs opened to manage payments and a significantly reduced risk profile. They get to balance cash, reconcile payments and manage transactions all in one ecosystem, which is much better for their success stories and the stickiness of the platforms they choose.

4. The Future of Embedded Payments is Financial Growth

Embedded payments allow companies to create new revenue streams and explore new business opportunities while enhancing customer experiences and building solid digital ecosystems. These embedded, real-time finance solutions open new distribution channels, providing inclusive and accessible digital transactions that can be added to any third-party environment to create seamless and frictionless B2B payments.

Platforms and marketplaces with the wherewithal to implement embedded payment solutions today are setting themselves up as leaders in an increasingly complex and competitive market. Customers seek frictionless and seamless, and these platforms deliver it in spades. Perhaps McKinsey captures it best by saying that ‘providers using embedded finance may continue to have the competitive edge, given the relationship with the customer and their larger ecosystem of services’.

How UNIPaaS is the Embedded Finance Future

UNIPaaS delivers all the benefits listed above, and so much more. With UNIPaaS, you get an embedded payment solution that understands exactly how to make your platform thrive and shine in a challenging market. Our solution is designed to help you ditch the pain points usually associated with payments and replace them with frictionless experiences that help you transform your growth.

Our agile digital marketplace payment design has been built specifically for marketplaces and platforms, providing you with comprehensive visibility into your ecosystem. Our solution is completely white-labelled to fit within your brand and comes with our assurance that your payment processing is in line with regulatory standards. Welcome to the future of embedded finance revolution - where UNIPaaS is here to guide you every step of the way. Meet a UNIPaaS expert today.