3 Ways Embedded Finance Is Changing the Future of Global Finances

3 Ways Embedded Finance Is Changing the Future of Global Finances

Embedded finance is a rapidly growing industry that has revolutionized the way businesses and consumers interact with financial services. In the past few years, its popularity has skyrocketed as people have become increasingly aware of the advantages it offers. Right from empowering businesses with the ability to integrate their own products into existing financial systems and offering more value to their clients to delighting consumers with customized solutions that meet their individual needs and preferences, embedded finance does it all.

However, despite the significant uptick in this technology's popularity, most are still unaware of how this technology is changing the future of financial services in real time. Thus in today's article, I will share with you 3 real-life use cases on how embedded finance is changing the way both businesses and consumers interact with financial services.

A Blue-Sky Opportunity

The potential for embedded finance is immense. From payments to lending and investments to insurance, virtually every financial service of today can be transformed through the power of embedded finance. Several companies across industries are already leveraging this solution to revolutionize how both businesses and consumers interact with financial services.

For instance, not long ago, consumers would need to approach a third-party lender in case they required financing for a big purchase. Today thanks to advancements in embedded finance, consumers can seamlessly apply for a loan and effortlessly split their payments in multiple instalments right from within the POS machine.

In addition to this, embedded finance allows customers to access multiple services from one place without having to jump between different providers. This, along with the integration of financial services in traditional non-financial environments, empowers the customer to not only effortlessly complete transactions but also keep better track of their finances.

As such, it's no wonder why this innovative technology has become so popular recently; its ability to provide customized solutions that meet individual needs and preferences makes it invaluable for both businesses and consumers alike!

Use Cases in Action

1. Embedded Payments

Embedded payments have revolutionized the way consumers pay for products and services. Instead of having to take out their wallets or enter credit card details into a website, consumers can now make payments seamlessly from within the application. This has made it easier than ever before for customers to purchase goods and services without any hassle.

For instance, Uber allows consumers to pay for their rides from within the app using embedded payments. By directly integrating with a customer's bank account or credit card, it enables them to seamlessly pay for their ride with just a few taps of their finger. This means they don't have to worry about having cash on hand or taking out their cards when riding with Uber. Additionally, customers can also store and view their past payment history in one location within the app, increasing its convenience further.

Similarly, Starbucks also uses embedded payment technology in its mobile application. Customers can add funds to their Starbucks account through linked debit cards, credit cards, or even PayPal accounts. Once loaded, customers can simply share their registered credentials with the barista, and the order amount will be seamlessly deducted from the account balance every time they make an order at any participating Starbucks store. This eliminates the need for customers to carry around physical money or swipe their cards each time they visit Starbucks, making it a much more efficient and seamless experience.

2.  Embedded Lending

Another example of how embedded finance is impacting everyday financial services can be found in embedded lending, which has revolutionized the way consumers apply for loans and finance their purchases. It has made it easier than ever to apply for credit without having to go through a long and tedious process. Through embedded lending, customers can quickly access financing for large purchases or borrow money in just a few clicks.

One of the most popular examples of this can be found in buy now pay later or BNPL services like Klarna. Klarna allows customers to finance purchases immediately and then pay for them in instalments over time, making it much easier for customers to afford big-ticket items such as furniture or electronics. With Klarna, customers don't have to worry about long application processes or disbursement times; all they need to do is choose the desired item they want to purchase, pay a small fee upfront - and then make payments over time at no extra cost.

 3.  Embedded Investments

Last but not least are embedded investments, which has revolutionized the way consumers invest their money, making it easier than ever to start investing no matter how much or how little they have. Embedded investments allow consumers to automate their investment process by linking up their bank accounts, credit cards, and other sources of wealth to an automated investment platform.

For example, Acorns is a popular embedded investment platform that makes investing easy for anyone and everyone. It automatically rounds up the spare change from everyday purchases and invests it in stocks and bonds. This means customers can easily begin investing without needing to transfer a large sum of money, as Acorns can make small investments on their behalf with just spare change. This makes investing accessible and easy for all types of investors, regardless of budget, size, or level of experience.

Takeaway - The Future of Finance Is Embedded

Embedded financial services have revolutionized the way consumers access and use their money. From embedded lending to investments, customers can now manage their finances in a much more efficient and cost-effective manner than before.

Right from leveraging applications like Klarna, which empowers customers to seamlessly split big purchases into bite-sized payments, to Acorns, which enables automated investing with spare change, embedded finance is making its way to every financial service we interact with on a daily basis, and this is enough proof to forecast that the future of finance will be embedded.

Looking to offer your B2B customers an embedded finance experience today? Get in touch with us to know more about how we can delight your customers and increase your revenue.


To view or add a comment, sign in

More articles by CrediLinq.Ai

Insights from the community

Others also viewed

Explore topics