The Benefits of Embedded Finance for Retailers

The UK financial services market continues to grow with more and more options becoming widely available for consumers. In 2023 alone, over 100 million UK consumers had an average of just below two debit cards with over 90 million of them being contactless.

With demand for different financial products showing no signs of slowing down, it is no surprise that embedded financial service revenues are expected to surge to $25,810 million by 2029. With huge projections and already established providers, this market has untapped potential for retailers looking to grow their offerings.

What is Embedded Finance?

Embedded finance, is where businesses offer their customers financial services integrated directly into their core products and user experiences. This practice brings numerous advantages that can lead to revenue growth, improved customer relationships, and optimised business operations.

How do Retailers Benefit from Embedded Finance?

New Revenue Streams

The first benefit of embedded finance is that it has the potential to create a new stream of revenue for your business. By partnering with an embedded finance provider such as Optimus, businesses are able to avoid the costs and intricacies that come with building and maintaining their own financial infrastructure, while benefiting from the additional revenue that it generates.

Get to Market Faster and Cheaper

Embedded finance comes with significantly fewer overheads and a less hefty technology investment when partnering with an established provider. This enables retailers to speed up their time to market by leveraging existing infrastructure, expertise and toolsets.

Additionally, retailers can benefit from a price advantage, as embedded finance providers are able to provide an already functioning framework for a lower price, rather than establishing a new system from scratch. Furthermore, by partnering with Optimus, retailers are able to provide Mastercard backed services for their customers, providing them with products from an established name within banking.

By incorporating embedded finance into their existing framework, retailers can offer an additional service to their customers, integrating further into their everyday lives. From debit cards, to a central banking application Optimus offers functionalities that enable a brand to become more integrated into a customers’ daily lives.

Avoid Regulatory Hurdles

Regulatory hurdles are another reason why partnering with an already established provider can significantly reduce the time it takes to get to market. Embedded finance allows non-financial companies to lend, accept payments, and more without going through the process of financial regulation themselves.

Retailers can enter the world of finance confidently, knowing they will comply with all financial regulations without having to worry about any complexities themselves.

Seamless Integration

Seamless integration is a key benefit of embedded finance for retailers. This approach allows retailers to outsource financial services to established providers, enabling them to run separately and seamlessly integrate with the retailer’s existing technologies.

Embedded finance providers, such as Optimus, offer easy connections to work with retailers’ technologies, making it more convenient to implement and customise solutions.

This nimble and flexible approach is more able to provide customised solutions rather than just providing off-the-shelf products, allowing retailers to tailor financial services to their specific needs and branding.

Benefits to Customers and End Users

Higher Number of Finance Options

Key research indicates that embedded finance is expected to be worth $7.2 trillion globally, with retail accounting for almost half of this. As the market expands customers will be interacting with a broader range of financial products directly from trusted retailers. With more options available to them, customers will be able to choose and tailor products to best suit their individual needs and preferences.

Multi-currency Payment

As the world becomes more digitised, it makes interactions between customers and retailers easier, no matter their location. Recognising this, companies like Optimus enable multi-currency payment options, allowing customers to transact in their preferred currency.

This capability significantly improves the customer experience, particularly for international transactions, by providing greater flexibility and convenience in payment methods.

Buy Now Pay Later

A staple benefit for consumers utilising retailer branded financial services is buy now pay later schemes. Similarly to a package holiday, these schemes allow customers to confidently purchase high cost products and subsequently pay off the debt without involving a third party. This flexibility in payment options not only enhances the overall shopping experience but also provides a sense of financial control and convenience to consumers.

In conclusion, embedded finance offers retailers the potential to tap into a market worth trillions by partnering with providers such as Optimus. The wide range of benefits include new revenue streams, faster time to market, and seamless integration to match the current systems and branding.

Additionally, customers and end users benefit from a higher number of finance products, multi-currency payment, and buy now pay later options, ultimately improving the overall retail experience.