Embedded Finance - The Next Profit Frontier

In today’s competitive market, B2B businesses are constantly seeking innovative ways to enhance their offerings and increase profitability. One emerging solution is embedded finance. By integrating financial services directly into their platforms, B2B companies can address key challenges for their customers, such as funding and money management, while driving growth and customer loyalty.

What is Embedded Finance?

Embedded finance involves integrating financial services, like virtual cards, business funding, and bank accounts, directly into a business's existing product offering, which is typically non-financial. This seamless integration allows SMEs to access financial services directly alongside other features, from their existing and trusted partner. This can both unlock financial services they would otherwise not have access to, as well as providing an overall simpler supplier ecosystem. The benefits of embedded finance technology include:

   Increased Revenue Streams

By offering financial products, businesses can create new revenue streams. For example, by charging fees on processed payments, or interest from loans and bank accounts. These can be substantial, with some businesses now earning more from these embedded services than their ‘core’ proposition. And, together, a range of products can be offered to create a connected ecosystem of revenue streams.

   Enhanced Customer Loyalty

Especially for businesses that offer transactional goods, rather than a continuous service, the implementation of embedded financial products supports the foundations of a continuous customer relationship. A restaurant owner that not only purchases food goods from a supplier, but also relies on them for a credit account, spending tool or even a promotional debit card, is expected to be a much more loyal shopper.

  Operational Efficiency

Embedded finance can streamline operations for merchants/business customers by reducing the need to manage multiple financial accounts and services separately. It’s now possible for B2B providers to offer digital dashboards that bring together account and spending activity, making it quick & easy to receive and send money, as well as tracking profits & losses. This efficiency can lead to cost savings and better resource allocation.

How Red Badger and Adyen Can Support Platform Businesses

Why You Need Embedded Finance:

Building the Right Proposition:

Creating Impactful Digital Products:

Getting It Right:

A continuous product mindset is essential for long-term success. This involves regularly updating and improving your product proposition based on customer feedback and market trends. Red Badger and Adyen support a long-term view on product development, ensuring that your underlying technical capabilities make the process of changing and expanding a product offering one that’s agile and simplistic. 

Steps to Implement Embedded Finance