How small businesses can harness the power of embedded finance

It wasn’t that long ago that you had to pull out your credit card and enter a number every time you wanted to pay for something online. Today, you can complete purchases instantly with a few clicks, such as Amazon’s “Buy Now” express button. This is an early example of embedded finance – one of the key trends in fintech that is changing the way people use and move money.

Built-in finance combines Financial instruments or services – such as lending, payments or even insurance – in a non-financial experience that you can use every day. For example, Apple has incorporated “Buy Now, Pay Later” into the iPhone, Amazon now offers seller loans, and you can sometimes add insurance when buying a device online.

Why embedded finance is taking the world by storm

Embedded finance affects almost every industry around the world, making it easier for your customers to buy from you. As a result, Retailers, tech companies, insurers, banks and other financial institutions are racing to create products that make accessing financial products more convenient than ever for you and your customers.

This growing popularity of embedded finance has fundamentally changed the way people do business. Not only does it have the potential to enhance customer relationships and streamline transactions, but it also has the potential to create new revenue streams for your business.

How can you take advantage of built-in finance?

Small businesses are expected to keep up with rising consumer expectations Provide an intuitive and connected digital experience more than ever.

Start thinking about how your customers pay for products and services. Can you make it faster and easier for them? A seamless online payment system that requires little effort from the customer can dramatically improve their experience and help you pay invoices quickly.

Embedding a ‘Pay Now’ button on your Xero invoice and connecting it to Stripe or GoCardless is a great first step. This gives those paying the invoice more choice in how to pay – for example via Apple Pay – making it really convenient for customers to pay on multiple devices.

Access your finances in one place

While embedded financial solutions often provide a more beautiful user experience, there is also the risk that it can lead to fragmented services that become confusing for your customers. It can also make it difficult to get a complete picture of your finances.

For example, Logging Switching in and out of different applications to run your business is incredibly time-consuming. and What starts as one or two services can quickly become more than a dozen. You and your customers can inadvertently sign up for multiple buy now, pay later options, cards and accounts – some of which you may forget and go unpaid.

Through open platforms, using open banking standards and APIs, you can connect banking channels from your financial institution to compatible accounting software like Xero for a true view of your cash flow in one place. This allows you to look at your finances holistically, giving you more confidence and control over your money management.

Ready to get built-in finance?

The world of embedded finance is evolving rapidly, so it’s important that you understand embedded finance and be ready to embrace new financial services on offer. Buy now, pay later options are really just the tip of the iceberg. Imagine your car paying its own parking tickets, or your shopping cart paying your credit card when you leave the supermarket.

In the future, it is expected that such seamless financial transactions will become the norm not only for consumers but also for small businesses. It won’t happen overnight, but the way businesses interact with their customers will definitely change.

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