PALO ALTO, CA / ACCESSWIRE / May 20, 2022 / Almost half of non-financial companies in the United States are already investing in and intending to launch embedded finance – this according to a new study report entitled Embedded Finance Market Analysis from top fintech company Whillet in California.
The report also found that 88% of those who have already implemented embedded finance in their company are satisfied with the integration, and 85% say it has helped them gain more customers. Embedded finance is predicted to grow at a staggering rate of 215% over the next five years.
Basically, embedded finance refers to the use of financial instruments by non-financial enterprises. It allows any type of company or online store to incorporate banking software directly into their websites or mobile applications.
The new Whillet survey is its third and final report on the fintech market in North America, having previously made available survey documents on Mexico and Canada. Within the study, the main factors of embedded finance market development and the advantages of technology implementation for merchants, also new trends and characteristics of the main actors were considered, as well as such phenomena as PayFac and PSP were thoroughly analyzed.
Advantages over reselling services
Embedded finance, rather than reselling financial services, is appealing to digital brands and sellers because it generates new revenue streams at very low marginal costs. The brand that implements it usually already has a customer base and embedded finance helps to develop a more qualitative approach to revenue generation. This creates a unique client experience that encourages loyalty and repeated purchases, as well as allowing merchants to better understand relationship economics.
Embedded finance can be a great development booster in almost all spheres of our life, and the report sheds light on some prospects of that kind. Whillet’s study thoroughly examines all aspects, explicit and implicit, of embedded finance function and gives several projections of how may, and, most certainly, will, enter the embedded finance market and help it to develop in the coming years, bearing current trends in mind.
Embedded payments market will grow due to a number of emerging Drive Factors:
Desire to share personal data. Many startups will probably explore and use this opportunity to extract more profits.
Growth of subscription-based services. The pandemic’s trend-accelerating effects have extended to the subscription economy, which will double to $1.5 trillion by 2025.
The rapid expansion of the marketplace market (300% every year), as well as a shift in customer behavior toward e-commerce, again aided by the pandemic.
There are also several Industry Trends which are often connected with the development of new financial services solutions and internet platforms aimed at the specific market sector:
Health. Innovative technology infrastructure that will connect healthcare providers with lenders for the flow of capital and quick and seamless financial transactions. As a result, patients will gain improved access to healthcare services.
Real Estate. An internet platform that allows tenants and landowners to directly complete transactions, without the need of tenant brokers. Can help with a variety of common issues, such as deposit escrow and renter’s insurance to safeguard both sides.
Transport. Ridesharing businesses have already developed seamless payments for consumers in the transportation sector, and they are now extending this to the insurance market by offering a special system of insurance for their cars that is valid only for the on-the-line period.
Municipal management. Cities have a great potential to harvest from financial digitalization, and citizens can benefit from embedded finance since it centralizes their financial data and allows local governing bodies not only to create new solutions but also to improve and adapt existing services and policies.
Generally, analysts distinguish three or four actors of the fintech process. Each actor provides specific services to one of the actors that jointly constitute the full process of the implementation and usage of fintech:
Providers – government-licensed banking institutions that produce financial services themselves that are then integrated into various platforms.
Enablers – they are the conduits via which information and data is exchanged between providers and distributors, usually with the help of APIs.
Distributors – those companies pool services from many sources to create a platform or network that opens access to the best solutions to the end-users (consumers).
Whillet is a new generation fintech solution, based in Palo Alto, California. It provides embedded finance services allowing clients to open digital wallets for their users and to manage them using application programming interface (API) integration. As a BaaS provider, Whillet handles all licensing requirements, relieving the client of that responsibility.
Its prime focus is on the B2B and B2C markets. The fintech solution from Whillet enables across the board installation and support for all processes. This includes websites, apps, marketplaces and other platforms set up for client users, facilitating such things as bank accounts, electronic money accounts and bonus accounts.
Name – Dana Cony
Email – [email protected]
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