Almost ninety percent of Small and Medium Businesses (SMBs) consider Embedded Finance to be indispensable.
Small and medium-sized businesses (SMBs) are increasingly demanding embedded finance services, viewing them as essential for their daily operations, according to a report by an unspecified organization's Intelligence Payments Optimization Tracker Series, commissioned by Worldpay.
The report reveals that 90% of small businesses now consider access to embedded financial services indispensable, a significant shift from viewing these tools as a convenience. Integrated financial tools like payments, credit, and lending have become as crucial as data analytics for SMBs when evaluating platforms.
This shift is driven by the transformative impact of embedded finance tools on businesses. SMBs using these tools report sales gains of 25% to 50%, highlighting their potential to boost revenue.
The demand for embedded finance services is not confined to one sector. Logistics firms are seeking automation to untangle complex supply chains, while healthcare firms cite the need for frequent innovation to keep pace with regulation. Retailers, too, are chasing omnichannel consistency across online and in-store experiences.
Across sectors, nearly half of small businesses expect their software partners to continually deliver upgrades. Dissatisfaction with embedded finance tools carries sharper consequences than before, as the bar for "good enough" keeps rising. The willingness to switch nearly doubles when SMBs have tested embedded lending and found it lacking.
In 2022, nearly two-thirds of SMBs were prepared to switch providers if they failed to deliver embedded finance services, compared to just over half in 2024. This trend underscores the importance of embedded finance in retaining customers. Embedded finance has become the frontline of customer retention for tech providers.
In response to this growing demand, software providers are recommending embedded financial services. In 2023, notable providers include Banxware and Nuvei. Banxware enables digital platforms like marketplaces and payment providers to integrate embedded finance solutions, while Nuvei offers seamless digital banking services including multi-currency accounts, card issuance, and real-time money access tailored for enhanced customer retention and operational efficiency. Both have prepared comprehensive platforms that simplify financial operations, ensure regulatory compliance, and provide flexible and secure financial transaction capabilities to clients.
Moreover, 90% of small businesses want to be proactively contacted about new solutions, and one in five businesses are actively searching for better-suited providers. This indicates a market ripe for innovation and disruption.
In conclusion, embedded finance is reshaping the competitive landscape for software providers, with frictionless credit access, one-click payments, and lending options becoming determinants of vendor loyalty. As more SMBs embrace these services, we can expect to see continued growth and innovation in the embedded finance sector.
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