Nuban Institute

Oracle and Mastercard Enable Customers to Get Faster Access to Working Capital

For registration, live keynotes, session details, news and more visit or Whether it’s enhancing the B2C experience or facilitating new business opportunities for the B2B industry, embedded finance is the financial service of tomorrow. The increasing
complexity of B2B payments, the rise of technology, the growing demand for
seamless payment experiences, cost savings, and improved security are all
driving this trend.

And, at Tilled, we’ll be on the front lines, enabling that trend through monetizing payments. Given this data, businesses should consider integrating BNPL mechanisms into their websites or apps. BNPL is becoming embedded payments trends more popular among users, especially since most clients buy online today. BNPL is a $100 billion global industry, and only in the U.S do people aged 18 to 24 use BNPL more often than their credit cards.

Top embedded payment trends

That’s likely to lead to consolidation in the industry, with some companies bought by others. It will favor some areas over others though, with more interest in business-to-business (B2B) or infrastructure concepts, and less in consumer or cryptocurrency, payments players said. “In 2023, in the U.S., real-time payments will start becoming real,” said Sanjay Gupta, who heads the biller segment at payments company ACI Worldwide.

Paypal and Stripe users don’t even need to log into their bank accounts from their online banking apps to make payments. It refers to financial services that nonfinancial businesses can integrate into their infrastructures. With the integration of a secure payment processing tool within your website or app, you can streamline your checkout process, allowing for quicker and smoother transactions. Not only does this create a more seamless experience for your customers, as we mentioned, but it also eliminates the need for additional software and reduces the risk of data breaches.

Positioned for growth

Major banks are working with Oracle to improve the user experience and encourage virtual payment card adoption. HSBC is the first bank to embrace the solution and will offer the embedded virtual card experience to Oracle customers in the U.S. and U.K. The growth of
embedded B2B payments provides an opportunity for businesses to improve
efficiency and reduce costs while providing customers with a more seamless and
secure payment experience. Back in 2010, the fastest way to get money on the same day from New York to London was to fly it there yourself.

This is indicative of the continuing evolution in payments preferences, a general migration toward lower-fee instruments, and the gradually declining margins that accompany scale. For businesses, embedded lending can create new revenue streams, while making lending more accessible to customers. This is particularly the case for the underbanked and unbanked population that may have a harder time accessing traditional lending channels, such as banks or credit unions. More banks using real-time systems will mean more U.S. businesses have access to those services through their financial institutions and can increase the efficiency of their payments. A few banks and fintechs, including Cross River Bank and Banking Circle, fulfill both of these functions.

Emerging opportunities

Although some financial institutions operate with channel partners, many are accustomed to serving end customers directly. Those using direct channels will need to build a new set of capabilities to support distributors in selling embedded-finance products to their consumer or business customers. Over the longer term, unlocking the valuable cash flow assets running through an ecosystem even improves the fortunes of underbanked and underserved populations. A restaurant with modern payment solutions on hand can “push” tips and other payments to waitstaff and save them a trip to a payday lender.

For most banks with proprietary distribution, embedded finance represents a significant cannibalization risk. However, banks with limited footprints or localized relationships, such as community banks and regional banks, may see it as an attractive way to expand their revenue base. Some may be comfortable with growing deposits and earning revenues relatively passively, at least early on, but many will look for opportunities to differentiate themselves and boost revenues through more advanced products and support. At the moment, payments-focused technology providers are leading the charge on embedded finance, using their money movement capabilities to attract distributors and then expanding into products that have been the strongholds of banks, such as lending. In addition, embedded finance could facilitate short-term credit advances to merchants and offer greater insight into customer behavior and trends to spur development of new products and services. It should also integrate with business or accounting software, allowing users to access banking capabilities with a single click.

Embedded finance examples

This new form of partnership between banks, technology providers, and distributors of financial products via nonfinancial platforms underpins what has been hailed as the embedded-finance revolution. Sitting at the intersection of commerce, banking, and business services, payments has been one of the first use cases of embedded finance, and a large number of the aspiring embedded-finance providers originate from the payments industry. With the growth of banking as a service and open-access APIs, businesses now have the ability to leverage financial services technology to customize payment solutions for their needs. As the CEO of a company offering virtual cards, I’ve seen a number of companies streamline their employee procurement process, control spending limits and easily track and reconcile charges without manually reviewing every purchase. Among embedded-finance distributors and their end customers, demand is already maturing for a range of deposit, payment, issuing, and lending products (Exhibit 1).

  • At the moment, payments-focused technology providers are leading the charge on embedded finance, using their money movement capabilities to attract distributors and then expanding into products that have been the strongholds of banks, such as lending.
  • He also moderated a Fireside chat with Christie Stunkel, Head of Global Payments Partnerships at Square.
  • Moreover, the real-time updates offered by an embedded payments API mean you can monitor your sales and revenue in real time.
  • Payments and operations in the office of the chief financial officer are key places where they can increase those efficiencies, he explained.
  • Turns out, as economies reopened, many of the changes wrought by the great digital shift became permanent.

In addition, suppliers benefit from faster payment, lower collection risk, and streamlined accounts receivable. First, many embedded-finance distributors began by offering deposit and payment products before extending their product range to lending products such as credit cards and merchant financing. Put simply, embedded finance is the placing of a financial product in a nonfinancial customer experience, journey, or platform. For decades, nonbanks have offered financial services via private-label credit cards at retail chains, supermarkets, and airlines. Other common forms of embedded finance include sales financing at appliance retailers and auto loans at dealerships. Arrangements like these operate as a channel for the banks behind them to reach end customers.

Financial services firms can untap global growth by democratizing financial advice

Each successive era has also leaned harder into technology, fostering disruption and requiring established institutions to undertake extensive retooling. Payments have become more embedded into shopping journeys, making them increasingly important to users in pursuit of convenience. Finally, each era has seen more competitors enter the market, driving transaction volumes and lower costs in both consumer and commercial segments.

Today, even such industries as healthcare, education, employment, and real estate have a demand for embedded payments. It’s a type of payment that enables companies to offer more solutions to their clients, thus meeting their needs. As the digital age continues to progress, the importance of providing a seamless checkout experience for consumers becomes increasingly vital. Embedded payments offer businesses a solution to this challenge, allowing for the integration of a secure payment processing tool directly into their website or mobile app. As embedded finance becomes more popular and widespread, non-financial companies are seeking ways to integrate financial services into their business offering. In turn, embedded finance is becoming a more prominent presence in the daily lives of customers.

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Looking ahead, he said that banks would continue to revolutionize and modernize B2B by offering lending products and dynamic discounting to enterprises, which will improve supply chain dynamics. For the banks, there’s the incentive and the desire to monetize deposits and debit interchange, to name but two revenue streams. The banks, he said, have been able to expose their offerings to new audiences with the aid of BaaS middleware layers and application programming interfaces (APIs) that can help third parties connect with the financial institutions’ (FIs) systems.

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