Appearing on paymentexpert.com, this new interview piece features our very own Michael Galvin. The primary focus of the article: That embedded finance must be high on the agenda for corporate decision makers. Companies must ensure they are not late to the market and that in terms of corporate embedded finance, first mover advantages are still open.
According to Mike, B2B embedded finance adoption logically lags behind the consumer space:
Consumers have been quick to take up the fintech-driven finance options that have emerged in recent years, with the pandemic pushing adoption into overdrive. It was perhaps not a particularly big leap for consumers when one considers store credit cards and loyalty cards had already been around for many years before digital options hit the market.
But as is the case with many finance trends, the B2B market for embedded finance has not developed as rapidly as the B2C market.
One of the main barriers to entry seems to be a lack of internal knowledge. Implementing embedded finance requires expertise across business operations and many companies lack the internal capability to execute such complex projects effectively.
The other barrier is often risk aversion. Many companies resist change, often preferring the status quo. Embedded finance projects are still considered to be an innovation project and as not having enough success stories to justify the investment.
Mike goes on to detail what's been happening lately in the space as more companies begin to discover the benefits of embedded finance and how it can drive corporate growth. The relationship between improved data gathering, targeted products, and merchant loyalty becomes abundantly clear. As Mike summarizes:
Using data-driven insights from embedded finance platforms, businesses can create customized financial packages for their merchant clients, whatever industry they are in. These packages, tailored to the specific needs and business cycles of both the corporate and the merchants, are almost always more attractive than standard industry terms.
Shopify is a great example of a business that has looked at its target market – budding entrepreneurs and small businesses – and created embedded finance solutions that cater to this market.
In doing so, it has not only ended up generating more than 75% of its revenue from merchant solutions, but it has also ensured a loyal client base.
For more insights, read the full article here:
Toqio: Seize the embedded finance first mover advantage while it lasts