Blog Post|Product Resources

Four ways companies can make the most of embedded finance

In a digital-first economy, every firm that processes transactions have a financial services component as a part of its customer experience. Embedded finance provides the opportunity for companies to make this component of their customer experience as simple and engaging as possible, while increasing loyalty, retention, and spending.

Instead of outsourcing payments to a third-party, businesses can now integrate financial services into existing buying journeys, giving customers more flexibility and choice while also streamlining internal processes. In this article we’ll explore the four key ways businesses can use embedded finance to drive meaningful improvements in customer experience, business efficiency, and revenue.

1.   Streamline app payments

Mobile services continue to play an ever-greater role in our lives, especially when it comes to app-usage. In fact, only 12% of time spent on mobile is spent using a browser, with the rest focused on apps, social media and communication. 2021 saw time spent in mobile shopping apps up 30%, even after physical stores reopened.

Apps give businesses more control over customer journeys than web-based or browser experiences. Much like in a physical store, the app becomes the users’ environment, reducing distraction and increasing engagement. The length of time customers’ spend on using your app, known as ‘stickiness’, depends on the positive experience you can provide to them.

By integrating your app with embedded finance services, you can provide customers more options and flexibility at the crucial moment of closing a sale. These can include:

  • Offering multiple payment options without having to leave the app.
  • Accepting multiple currencies.
  • Offering adjacent financial services such as buy now pay later (BNPL) services, which make it easier and quicker for shoppers to access credit to spread the cost of a purchase.

2.   Create loyalty with branded credit cards

Whether for customers or employees, branded credit cards are an ideal way to control access to credit and capital while creating value-driven relationships based on convenience and loyalty.

Issuing a virtual or physical card gives your business an opportunity to create a new experience for your customers, rewarding repeat purchases with discounts, offers or exclusives. Not only does this improve retention, but you can also increase the lifetime value of customers and upsell additional services.

For example, Utu, a travel technology company that helps customers benefit from tax-free shopping abroad offers a virtual card. Powered by Nium, Utu’s card makes it easier for customers to claim tax refund by entering their card number in the credit card field of any tax refund form or kiosk.

3.   Enable purchasing with cryptocurrency

Interest in alternative currencies is growing, with nearly half of Millennials claiming to be knowledgeable about cryptocurrency, compared to 18 percent of all investors. As cryptocurrency becomes more mainstream, there is huge potential in opening up the range of payment types on offer for your business.

While most companies currently do not have the ability to process, store and convert cryptocurrency, there are now Crypto-as-a-service platforms that can help your business to buy, sell, and hold the most popular digital assets. By integrating cryptocurrency into your payment systems, businesses can benefit from:

  • Instant payments: Blockchain technology enables instant, more direct transactions.
  • Wider customer reach: By opening up payment options, you can broaden your target market and grow new visits. 
  • Reduced fraud: Due to their encryption, cryptocurrencies are difficult to steal and counterfeit, lowering the risk of fraud.

4.   Automation your payroll

Embedded finance can also transform internal finance processes by giving your finance teams more control and flexibility in how they access, move and monitor funds. A key opportunity is payroll, which can be time consuming and inefficient, involving managing multiple data sets and stakeholders.

By internalizing control of payroll process with embedded finance, companies can give employees more options in how to manage their salaries. For example, maritime business BSM used Nium’s platform to give their employees access to their money from almost anywhere around the world and enable remittances to be sent to their bank accounts directly, with no need to wait for bank transfers or Bankers’ Automated Clearing System (BACS) payments to clear.

Embedded finance can unlock flexibility and better experiences

As businesses increasingly compete on customer experience and efficiency, embedded finance will be an essential tool for shaping buyer journeys and leveraging financial services to their full effect.

In this new era, there can potentially be as many financial experiences as there are customer types. This is why it’s essential to work with a finance partner that unlocks maximum flexibility and exceptional experience.

Nium is a trusted partner for financial institutions, retailers and travel businesses worldwide, giving them instant access to a world of real-time APIs, powerful tools and tailored support. To find out how you can get the most out of the integrated financial future, get in touch with our team today.

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