One of the most important things for every business is the need to increase revenue and maintain a strong customer base. Businesses often become overwhelmed with the task of pivoting into new and innovative ways to do this and while there may be a number of things business owners and startup founders alike can try, one promising way to build a solid customer base is with embedded finance.

Embedded Finance, which has been regarded as the future of the financial service industry is a promising opportunity for many businesses to not only increase customer loyalty but grow their business and stay in line with the progression of a digitised financial world.

What is Embedded Finance?

Over the years, we have seen major innovations with technology via the infusion of tech into many sectors, however, for many businesses, the global coronavirus crisis was one major propellant that led to the rethinking and acceleration of their digitisation strategies. Notable examples of digitisation continue to revolve around the fintech sector where financial mechanisms are being integrated into business plans for many non-financial players in the industry. One of these financial mechanisms is embedded finance.

Embedded Finance is the seamless integration of traditional financial services with other services. This happens when a non-financial website, app, or platform such as an e-commerce retail company integrates a financial service that allows new and existing customers to access financial services anytime and anywhere. Embedded Finance may also exist when local provisions and grocery stores offer financial services with the aid of point of sale machines (POS) and other technology devices or services.

The era of embedded finance is growing stronger. With an estimated market value of over $138 billion in 2026 according to research, it is quite clear that this is not just another financial fad, but the future.

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How Embedded Finance Can Help Your Non-Financial Business

Non-Financial Businesses first need to design a finance strategy that is in line with their digitisation needs and direction. This, among others, consist of analysing the business’ digital needs which goes on to inform what financial tools the business can embed in its services. 

For example, a buy-now-pay-later embedded finance model could make goods and services more accessible to certain customers, thereby increasing customer satisfaction, embedded insurance can also make it easier for your business to become a one-stop-shop concept. However, in order to pick the right solution, you first need to understand your needs.

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Here are five common embedded finance models your business can try:

Buy now, pay later (BNPL)

BNPL is a totally new line of credit service for modern market communities. Making it possible for your customers to have a wide range of products that can be paid overtime empowers your customers to shop differently. This model of Embedded finance is mostly common for e-commerce platforms. Examples of businesses that have this model of embedded finance are CDCare, CredPal, AltMall, Spreda, Menopays e.t.c.

Embedded Payments/Card Payment

Imagine making payments for goods on your platform by the touch of a button. Adding this feature to your business leads to faster checkouts and a better experience for your customers. Embedded payments provide options for customers to make payments with ease. Startups like Jumia enable users to make purchases via embedded payments, customers make payments without switching between apps.

Integrated Insurance Services

This is very important for customers who want to ensure the security of their money when making a purchase. Embedding an insurance service for customers informs businesses of the behaviour of their customers when making a purchase on their platform. Platforms like CDCare embed insurance when making BNPL purchases on their platform.

Fintech-as-a-Service

This is everything from invoicing to customer acquisition and everything in between, financial technology-as-a-service tools as a whole are increasingly being added to company offerings.

Technology has become a strong tool to bridge the gap between financial services and end consumers - with embedded finance making it easier for consumers to access financial services fast and hassle-free, thereby improving customer satisfaction and financial inclusion.

As more non-traditional players enter the financial technology space, we can only expect and encourage strong adoption of embedded finance among direct-to-consumer businesses.