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Embedded finance in the US - huge potential for brands



Embedded finance is set to create one of the biggest shake-ups the US financial services industry has seen, with wide implications for all those with a stake in the game, especially brands. We take a look at what´s likely to happen over the coming years.


Research has shown that the embedded finance industry in the US is expected to grow by almost 40% on an annual basis to reach US$67,562.0 million this year. Over the decade, it is expected that the industry will record a CAGR of 23.5% and relevant revenues will increase from US$67,562.0 million in 2022 to reach US$212,862.3 million by 2029.


These numbers show that the potential is huge for brands that are willing to embed financial service as part of their brand journey.


While observers have correctly pointed out that the overall infrastructure seems to be on a decline, brands can thankfully embrace new technology by a new generation of fintechs such as Railsr which is expected to accelerate market growth.


Embedded finance experience - the way to consumers’ heart, mind and pockets


Overtime, brands have realised the importance of delivering brand experience, as positive engagement with the brand creates deeper, more emotional connections, at times inspirational and most importantly, converting consumers to paying customers. A positive brand experience more often than not is the determining factor of a consumer’s choice, whether the brand wins, or loses the sale.


Embedded finance experience


Moving beyond the scope of “branding via marketing and communications”, brands are increasingly seeing the value of using financial products and services as drivers for consumer engagement.


Just think of brands such as Uber. More importantly, the epitome of positive engagement is for brands to curate their offerings such that on the surface, they are not recognised as financial transactions. Such a “veil” presents a seamless and richer experience which is aligned with the expectations of new age digital consumers.


Credit card-as-a-Service (CCaaS) - important part of the overall embedded finance experience in US


Consumers, as they become more savvy would have noticed that non-financial brands are starting to issue cards, debit or even credit cards. Immediately, companies like Apple, Uber, DoorDash and even some sports teams have issued their own cards. These have brought about tremendous benefits and enhanced finance experience for consumers.


As mentioned above, consumers from some industries such as airlines are used to such thematic credit cards. The key difference is that traditionally, brands need to work with banks to issue credit cards. The entire process could take years to materialise. The good news is that brands need not be restricted to just working with traditional banks any longer to issue their white labelled branded credit cards - in fact, brands can work with companies like Railsr, where the platform has pre-packaged together the near 100 complex integrations, including the commercial agreements, global financial operations, regulatory and payment scheme licences and finCrime monitoring.


All the "boring stuff" is expertly handled by the Railsr turnkey platform powered by proprietary technology. This means that brands are equipped to tap on the huge embedded finance potential by going-to-market at pace.


As the potential of embedded finance experience is truly realised in our day-to-day lives, there is an opportunity for brands to create entirely new consumer experiences and business models, which in turn can lead to more revenue streams, better margins and valuable brand equity.


For anyone wishing to meet the Railsr team at Money 20/20 USA and learn more about embedded finance experience, please see here.