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  • Writer's pictureNeil Martin

Embedded finance - richer finance experience for retail shoppers

Railsbank APAC Marketing Manager Darren Thang goes shopping and gets a nasty surprise.

Just over the weekend, I was at a famous household goods distribution retail store to purchase a new television and sofa set for my new home. Happy with my selections, I told the salesperson that I was ready to make payment and he led me to the cashier to check-out the items.

Instinctively, like any other consumer, I wanted to know what were the best ongoing deals and promotions that I could utilise. How could I ensure that these items would be successfully delivered to my place at the indicated date and time, and many other concerns that were on my mind. The subsequent “experiences” that happened, admittedly caught me by surprise.

From having to fill out physical forms to apply for membership (and not knowing what are the perks then and there), to having to look at a physical pamphlet to see which are the banks credit cards I can use to enjoy promotions, and being told that the store did not have any knowledge of the delivery details, and that the delivery person will call me on the day, to provide a time within a wide window - it was just all too much.

Being used to the holistic end-to-end digital customer experience that digital natives super apps provide, retail brands are increasingly expected to provide a frictionless seamless customer experience. The end result - I walked away from the store and chose to purchase the items from an online ecommerce marketplace which provided a holistic customer experience.

Post COVID consumer behaviour driven by digital consumption

The COVID-19 pandemic has led to seismic shifts in consumer behaviour - retailers will have to work even harder to meet ever-changing customer experience expectations in order to be successful and remain relevant.

These abrupt shifts have left many retailers to find different ways and means to effectively serve customers through other channels that are largely digital. Even though digital natives and omnichannel retailers have adapted relatively easier over retailers that have a more a bricks and mortar strategy, it is worth a note that as we enter into a post COVID world, consumers are welcoming more face-to-face experiential engagements with brands. One key thing that retailers must know is that the expectation of frictionless and seamless customer experience is just going to be more significant.

It has been correctly pointed out that retailers need to reimagine their omnichannel approach to create their own unique and relevant customer experience and in my opinion, embedded finance experience must take centre stage in this strategic exercise.

Offering financial products and services as a nonbank brand

Since the 1950s, there are some retailers that have tried to take ownership of the finance experience of their customers by offering credit lines and white-labelling banking services.

While that has been met with varying degrees of success and failures, the development of technology that has brought about turnkey API solutions, banking-as-a-service (BaaS), cards-as-a-service (Caas) technology and partnerships, brands we love can potentially offer a whole host of financial services on their own. This allows retailers to create stronger bonds with their customers, and most importantly, new revenue streams.

For customers, embedded finance reduces friction during critical moments in their journey. This is usually done to prevent customers from navigating away just to complete a payment transaction, or from having to physically pull out a wallet, or purse, to complete the checkout process.

By owning and offering financial products and services, this will bring about more data which can translate to building even tighter relationships with customers. Retailers can enable richer finance experiences to acquire, retain and increase customer lifetime value, all while generating new business opportunities. This digitises retailers’ offerings in a way that provides more customer data and incentivises customers to bank with their favourite brands, deepening the customer relationship.

On a side note, retailers can now also keep customer funds (and debts) with the company instead of relying on banks, or financial institutions. Fundamentally, this can create more new business models for the retailer, by generating revenue from financial services such as lending and insurance.

Loyalty Programmes

Membership and loyalty programmes are ideal and tangible ways to build out as forms of embedded finance experiences. Gone are the days when we kept easy-to-lose, physical loyalty cards. The loyalty programs that are enabled by embedded finance directly link loyalty rewards to payment methods. Customers can redeem and enjoy rewards seamlessly while digital mediums such as push notifications and chat services are used to engage customers across their entire customer journey, until they make a purchase.

Loyalty programmes are important as they incentivise future purchases and help generate additional revenue streams (for example, fees from every card tap). Retailers branded cards can be used for membership models in sports clubs and in airlines’ frequent flyer programmes.

Enabling embedded finance experiences also means that you are in control of building out a user-friendly digital customer experience journey optimised interface that will enhance “stickiness” with the brands’ ecosystem.

Expansion of trust by customers

As there are legal frameworks such as General Data Protection Regulation (GDPR) and Personal Data Protection Act in place, brands have begun collecting data and information from consumers and crucially, consumers are growing accustomed to sharing personal data with retailers and brands they consume from. Fuelled by the desire for seamlessness and convenience, it is observed that this is also an expansion of trust and acceptance into brands providing financial products and services in the form of specially curated and highly relevant embedded finance experiences.

As the saying goes, consumers do not wake up and specifically plan to consume banking services - consumers buy cars and not car loans, consumers buy furniture and not the instalment plans. Ultimately, they are interested in the products and services that financial products and services can help them get. As such, when brands that consumers love provide quality products and simultaneously provide non-complex financial products and services, the enriched finance experience is usually expected and well received. Retailers that focus on their value exchange with customers will find themselves adding tremendous value and optimising customer experience for their customers.

Buy Now Pay later (BNPL)

Buy now, pay later is a way for shoppers to buy their goods now and pay them off later. It is a short-term financing option where shoppers agree to pay for their purchase in instalments after a downpayment.

BNPL generally promises no interest and no late fees with minimal to no credit checks. However, some payment plans can charge interest, and some BNPL providers (Fintech startups and scaleups) do charge fees for missed payments, or renegotiating instalments as that is their main business model.

Traditionally, BNPL providers usually handle the financial aspects (including refunds) while retailers still manage the supply chain, commercial and resale strategy. This means that while the concept and adoption of BNPL is growing exponentially on consumers, retailers and brands still face the gap and consumers will still not have that complete frictionless and rich finance experience if they are not offering such financial services directly.

BNPL drives incrementality. At the end of the day, instalment payments give consumers an enriching finance experience by allowing consumers to manage budgets and purchasing behaviour. This will inevitably increase trust between retailers and consumers, leading to incremental sales and customers acquired.


The pace of change in the post-pandemic environment means retailers can never rest on their laurels. This means that retailers need to have complete ownership of their customers’ journey which will provide them with even more dynamic data which can be extracted and analysed for key customers’ insights.

With the rise of digital, companies will have a large pool of data at their fingertips, but the eventual winners are the brands that can offer the most enriching and relevant finance experience for their customers.

Retailers have much to do, and time is of the essence. Thankfully, the learning and adoption curve can be cut short by partnering with a company like Railsbank, the global Embedded Finance Experience Platform.

The next normal is already here and taking shape quickly, and that means, customer expectations will continue to shift towards even less patience towards friction in customer journey. Retailers that optimise customer experience by focusing on enabling richer finance experiences for their customers will find themselves in a much better position in strengthening their relationship with customers and improved business opportunities. Read through our website and speak with our APAC team to find out how retailers can create amazing moments for customers using embedded finance experiences, and improve their bottom line.


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