Payments Innovation in the Cloud: The Power of Embedded Finance for Non-Financial Brands

Today, leading brands are looking for ways to extend their connection with every customer, and embedded finance presents that chance.

The fintech industry has discovered how embedded finance can act as a lynchpin in the business-customer relationship, and non-financial brands must capitalize on this opportunity. Business demand alone is why embedded finance is expected to grow in market value from $43 billion in 2021 to $138 billion in 2026.[1]

At its core, embedded finance is about integrating frictionless, digital payments and financial experiences right into a business’ branded environments, giving customers a seamless and more feature-rich brand experience than ever before. Businesses that are already embracing this shift are reaping the benefits of increased customer loyalty, incremental revenue and more market share.

McKinsey’s recent analysis confirms how brands across all industries are including payments and financial services as a key component of their core business models: “Today, companies of all types and levels of maturity — including retailers, telcos, big techs and software companies, car manufacturers, insurance providers and logistics firms — are considering and preparing to launch embedded financial services to serve business and consumer segments.”[2]

Thanks to the power of the cloud and the advancement of open APIs, non-financial brands have seamless ways to swiftly integrate fintech products and services into their business ecosystem. Embedded finance provides a clear path for businesses to cement themselves deeper into their customer’s lives, while creating a sustainable growth model.

Equipped with access to these tools and technologies, non-financial brands now have the added benefit that comes with offering consumers greater payment accessibility and choice via their websites and apps — opening up innovative financial access points to more consumers and businesses.

Embedded Finance Use Cases: Enhancing Customer Digital Experiences

From digital financial services to digital wallets, embedded finance presents non-financial brands the chance to create new revenue streams, increase customer conversions and tailor offerings for customers. Businesses looking to enable quicker spending and frictionless payment experiences should look toward embedded finance solutions to create branded payment ecosystems that deliver richer, long-lasting customer relationships.

By creating digital wallet embedded finance solutions — typically through the application of open APIs — non-financial brands can offer traditional financial services such as direct deposit, mobile check and cash loads, ATM withdrawals, rewards, savings accounts and more. Collectively, playing a larger role in a consumer’s everyday financial life can help optimize business’ growth opportunities.

For retailers, embracing embedded finance gives the opportunity to offer a branded ecosystem that aligns better with how their customers are already interacting with them. Integrating digital payments into business’ infrastructure allows customers who already connected with a brand an easier path to both shop and pay.

Embedded finance solutions also help deliver a seamless commerce experience by helping brands integrate payment accounts directly into an app via a digital wallet. This reduces payment friction as it allows customers to stay in one environment to complete the entire commerce experience. In fact, These features have the potential to increase user adoption and build brand loyalty with customized rewards that can be tailored to optimize any business’ interactions with their customers.

Embedded Finance, Business Partnerships and the Power of the Cloud

Today’s consumers want integrated payments and commerce experiences.[3] By enabling non-financial brands to integrate fintech products and services into their websites, apps and business processes seamlessly using the power of the cloud, they can deliver reliable, secure and flexible solutions to their end users. This technology also enables greater industry partnerships that are expanding financial services between more businesses and customers.

Embedded finance also acts as a growth tool for non-financial businesses to leverage payments and digital banking innovation with simplicity, flexibility and at scale — without having to manage the complexities that come with being a financial service provider. This includes risk, compliance and fraud management services and the technology that allows businesses to integrate payments solutions — including contactless payments, digital payments and in-app payments.

These value-added experiences are what drive deeper connections that boost loyalty. Enabling an embedded finance experience across an existing business ecosystem is a key component to adding value to existing customers, while providing new features and functionality for prospects that are looking to conduct their business faster and simpler.

Partnerships across the payments, tech industries and even within companies — like that between Global Payments, Netspend and AWS — enhance technology and distribution reach, making Netspend’s innovative product offerings available to a broader base of, fintech startups and other ecommerce players in a cloud-based environment at scale.

In this instance, the power of AWS technologies within the cloud, coupled with Netspend’s open API’s, enable non-financial brands to quickly scale their financial service offerings and significantly increase speed to market in ways that wouldn’t be possible without this advanced technology. Cloud-based technologies also allows companies to deliver their customers frictionless payment experiences — with the necessary security, reliability, and flexibility to innovate across the digital commerce ecosystem.

For brands that want to secure a firmer position in their customers’ lives, embedded finance is the tool to expand those relationships through the power of fast, easy, digital payments. As mobile and digital payments continue to become part of consumers' everyday lives, having a role in how customers shop — and pay — is the next step in innovating what it means to be a customer-centric business designed to adapt to how, when and where customers are interacting with a brand.

 

About the Author: Walt Granville serves as Netspend’s Senior Vice President, Business Development. Walt leads a team of experts that are responsible for working with partners to unlock growth through payments and digital banking innovation. His Netspend partnership team has developed card programsemployer payment solutions and BaaS offerings across multiple industries including; Technology, Gaming, Ecommerce, Lending, Fintech, Healthcare, Retail and Alternative Financial Services. An industry veteran with over 20 years of experience in the US and European financial services and payment industry, Walt has held roles managing strategic partnerships and product innovation teams for payment networks, processors, issuers and technology innovators. Prior to joining Netspend, Walt held various roles with Visa, First Data, Affinion Loyalty Group, and Monitise. 

 


1. Juniper Research, “A new study from Juniper Research has found that the value of the embedded finance market will exceed $138 billion in 2026, from just $43 billion in 2021,” July 2021, https://www.juniperresearch.com/press/press-releases/embedded-finance-market-value-to-exceed-138bn

2. McKinsey & Company, “What the embedded-finance and banking-as-a-service trends mean for financial services,” March 2021, https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/what-the-embedded-finance-and-banking-as-a-service-trends-mean-for-financial-services

3. McKinsey & Company, “What the embedded-finance and banking-as-a-service trends mean for financial services,” March 2021, https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/what-the-embedded-finance-and-banking-as-a-service-trends-mean-for-financial-services