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Question

Why would my customers want embedded financial products?

Last updated:

September 12, 2023

3 minutes

Answer

Embedded finance is relatively new, so it’s natural to wonder why your customers would want it. 

In fact, as companies like Lyft, Affirm, and Shopify have shown, demand for embedded finance is robust and growing fast. One of the primary reasons is that American small businesses and consumers aren’t getting their needs met by traditional financial institutions. (article continues below)

Uber drivers who have the Uber Pro debit card get paid out automatically, within five seconds of completing a ride.

Through embedded finance, you can differentiate your product and deliver more value to your customers by offering them:

  • Improved access and convenience. By making financial products available within the platforms that customers already use, tech companies can reach audiences that banks have had trouble connecting with.
  • Better cash flow. 63% of small- and medium-size businesses say it takes too long for funds to become available in their bank accounts. With embedded finance, platforms can send funds to their customers within moments or even on-demand.
  • Better financing options. Tech companies understand their customers’ business models and what they can afford to repay. As a result, they can provide more tailored financing, with better terms, when compared with a traditional bank.
  • Consolidated financial management. Small-business owners often use 4-5 software tools to manage their money. When you offer embedded finance, you become a one-stop shop, the single tool your customers need to run their businesses.
  • Tailored rewards. You understand your customers: you know what they value, what their pain points are, and how they measure success. As a result, you can craft a targeted rewards program that is truly meaningful to them.
Originally published:
July 17, 2023

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