The boom of online shopping and modern payment solutions are together penning a new chapter in the history of fintech observed Bahaa Abdul Hussein. E-commerce platforms are increasingly offering embedded finance services like lending and insurance to attract the tech-savvy consumers. Many online marketplaces have discovered that offering embedded lending services is beneficial in multiple ways. It increases consumer loyalty, yields greater ROI and even takes their consumer base into the global territory. In the competitive market, he who has integrated embedded finance into his company’s traditional finance system is the master.
Examples of embedded lending
The concept of embedded lending is nothing but allowing users to obtain credit or loan for the purpose of shopping within that app or platform. Klarna is a pioneer in embedded lending who have impressively cut the waiting time in filling out credit applications. You easily buy what you want from their retail partners by using the monthly payment scheme via Klarna when checking out. Amazon also offers a Buy Now, Pay Later scheme that encourages consumers to buy their products right now while availing a payback scheme that lets them pay in monthly fragments.
Why is embedded finance so popular?
All the digital payment solutions like Google Pay, Apple Pay, PayPal and Venmo are doing a good job of enticing the modern consumers with ease of access and instant transfers. Many services like movie theaters, concert companies, travel agencies, food giants, coffee chains, educational platforms and airlines are all offering embedded finance solutions. It has become commonplace to avail loyalty programs that enable easy shopping experience without concerning oneself with the hassles of using cash or card. Embedded finance is indeed the future of fintech industry as consumers increasingly become more impatient and want to buy things as soon as they possibly can.
How can embedded lending benefit companies?
Digital innovation and continuous tech enhancement are two key areas which can make or break an online business. Consumers will easily sever ties with a company they feel is becoming outdated or doesn’t have its best interests in mind. Therefore, constantly seeking financial solutions that save time and effort for them is the need of the hour. Embedded lending is one major area that can impact the purchasing behavior of the target audience of a company. It plays a role in deciding if they want to stick with them or find someone else who offers better fintech solutions to the problems they face.
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