Companies that offer in-app payments and financial services within their respective platforms are examples of applying embedded finance to non-financial services.
Embedded finance is changing the way financial and non-financial companies approach finance, and businesses are already seeing the benefits it can bring. For example, 88% of them see an increase in customer engagement, and 85% report an increase in new customer acquisition. By 2029, the embedded finance sector is estimated to generate $384.8 billion, a notable increase from $22.5 billion in 2020.
Incorporating embedded finance into service offerings enables businesses to discover new growth opportunities. Embedded financial solutions enable financial industry leaders such as large banks, payment systems, and e-wallets to expand their customer portfolios and niche products in geographies and countries that were previously too expensive and risky to enter. You will be able to do it.
Examples of how fintech and financial companies are applying embedded finance to their services include:
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Integrating mobile banking apps with food delivery or rideshare apps
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Non-financial businesses use in-app payments to create continuous customer interactions
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Retailers offering POS financing options
Addressing unmet financial services needs in a growing market
The vast affiliate marketing market has a dire need for financial services that current financial institutions cannot adequately serve. This is an ideal example of an industry where embedded financial solutions can offer huge profit potential to financial institutions. This gap also leaves publishers facing cash flow problems and lack of credit.
One way to start reaping the benefits of these solutions is to join a partnership. In March, international technology leader Mitgo Group acquired embedded finance platform Embedded to launch a new business unit. The company's expansion is aimed at helping more fintech services enter the affiliate marketing space, where spending is estimated to grow to more than $15.7 billion this year.
Embedded provides end-to-end solutions designed to equip non-financial businesses with embedded financial products to reduce payment costs, improve business processes, and increase customer lifetime value. Built-in use cases cover businesses in a variety of industries, including pharmaceutical and healthcare companies, e-commerce and retail, and electronics manufacturing companies.
With this acquisition, Mitgo Group aims to drive 7% of its transaction value, estimated at more than $1.5 billion, from its affiliate marketing division over the next three years. The company plans to establish cooperation with global payment platforms and financial institutions, which are the main players in this market. In this way, fintech companies can collaborate within the affiliate marketing industry and benefit from it.