The financial world is an exciting place right now, and financial technology, or FinTech for short, is right at the center of it. In particular, one of its key innovations, Embedded Finance (EF), is changing what banking means now and what it will look like in the future.
Whether it’s shopping, paying bills, booking flights, or even playing games online, you’ve likely encountered embedded finance or some form of it (without knowing it) when closing your transactions. So, what is it, why are experts for it, and how is it being implemented in everyday life?
Embedded Finance: What Is It?
If we haven’t said it before, we’ll say it again: Finance just got better, and FinTech is changing your buying and selling. Think of your everyday app as a super-app, but for finance—you don’t have to switch apps to make transactions of any kind. That’s from banking services, like payments and lending to insurance.
And that’s what is at the core of embedded finance—from ride-sharing apps (e.g., Uber) to e-commerce sites like Shopify and even online casinos. Many platforms now offer financial services integrated directly within their interfaces.
Embedded Finance is Advancing
You are late to the party if you are only just finding out about embedded finance. At present, EF is so advanced that you have Uber drivers setting up bank accounts right from the app itself. Companies are getting smarter at how they use the tech now, so much so that you don’t realize it when your purchases are done until you get the notification on your smartphone.
Aside from the seamless nature of it, EF has also made smaller transactions more viable. In-game purchases on online casinos are a prime example of how smaller transactions work. While you traditionally need a minimum account balance to play games, you can now play roulette from just as little as 0.20 credits from the demo version you first clicked on. TikTok, Instagram, and YouTube will also let you gift a creator for as little as under a dollar. It shows the changing landscape and the inventive ways platforms are giving consumers control of their money, including how they spend it.
Why Everyone Is Okay With Embedded Finance
It all boils down to the benefits of having your transactions/finances where you need them the most. Research supports this, showing consumers are on board for EF for benefits like convenience, a smooth (unbroken) virtual experience, and speedy financial service, with no additional charges in transaction fees. In a few words, you get financial services where you need them the most. Brands are taking notice, too, and you will be hard-pressed to find a site without some form of EF on it these days.
Things Can Only Get Better From Here
Embedded finance is still a novel idea, most people don’t even know what to call it when they see it. That it has become so widespread is a clear indicator that embedded finance will live up to its name and embed itself into our daily lives. We can only speculate that financial services will get closer to us and more personal; it’s no longer just banking but getting financial services where they’re most needed—tailored to your preferences.
