Embedded Finance Ecosystem: Mapping the Path to Transformation of Goods and Channels Industries

January 2024

Embedded finance is a critical factor in improving the customer journey and driving transformation. Leading embedded finance partners enable non-financial clients to offer diversified financial products and services, with simplified integration, privacy computing and risk tools to ensure privacy and security. Competition in electronics, retail e-commerce and messaging has been intense, while opportunities in appliances subscription, social commerce and gaming emerging.

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This report comes in PPT.

Key Findings

Seamless finance experience critical for the overall customer journey

Finance enables transactions for all goods and services, so improving satisfaction with the overall customer journey depends significantly on the finance experience.

As payment is visible to end customers, the success rate, speed, cost and security of payment is particularly critical among all embedded finance products and services.

Diversify payment options with a single integration

Increasing diversity of payment methods and complexity of local payment markets make payment a challenging task for non-financial firms, especially those expanding overseas.

With value-added services in collection and fraud management, payment aggregators which support a single integration for most cards, digital wallets and fast payment are rising.

Electronics manufacturers active in embedded finance, while appliances firms venture into subscriptions

Leading electronics manufacturers, such as Apple, Samsung and Huawei, have been active in embedded finance to drive sales of their devices, especially smartphones.

Finance in smart appliances has not gained traction yet. Appliances businesses including Electrolux, LG and Bosch have been exploring Appliances as a Service (ie subscriptions), embedding finance, especially recurring payment.

Social media, especially streaming and gaming, require a frictionless finance experience

While Tencent, Kakao and Line successfully embedded finance into messaging, increasingly popular streaming generates new opportunities for e-commerce and embedded finance.

Embedded finance, especially payment with no friction, and fast and secure payment, are in demand, especially for cross-border transactions involving social media content creators and game developers.

Key commerce developments in 2023
Customer experience and diversity of payments critical for goods and channels industries
Why relevant for regulators, financial services, manufacturers, retailers and social media?
Structure of the strategy briefings in embedded finance
Embedded finance is the fuel driving growth of multiple industries
Financial firms can hardly compete with non-financial businesses on usage frequency
Mapping key leaders of embedded finance solutions in key industries
Leveraging handsets to expand to finance
High penetration of smartphones leads to a high rank in device choice for embedded finance
JP Morgan contributed to build Apple Pay
Why did JP Morgan break up with Apple?
Apply Cash platform provided by Green Dot Bank
Apple Card issued by Goldman Sachs, which may need to improve credit decisioning
Apple Pay Later powered by Mastercard and Goldman Sachs
High risk of loss for Apple’s high interest savings account powered by Goldman Sachs
Solaris powers virtual debit card, lending and eKYC for Samsung Pay in Germany
Fragmented banking market for card payment in Germany
Huawei established partnership with bKash in 2017 and enhanced it in 2023
Huawei powers KBZ Pay, G-Money and Vooma loan, while promoting AppGallery
Why did KBZ Bank adopt a dual-app strategy for its retail business?
Opportunities and challenges for embedded finance in electronics
Embedded finance to play a key role in every phase of customer journeys of appliances
Payment method and ownership of appliances
Embedded finance in smart appliances has not gained traction yet
Appliances rental shows higher potential than smart appliances in embedded finance
Electrolux and Stripe partner to create a subscription service for appliances in Singapore
DBS powers Haier to provide digital financing to its distributors by alternative data
Bosch takes on sustainability with rental subscription service BlueMovement
LG’s transformation to a “HaaS” provider presents opportunities for embedded finance
Bolttech teamed up with Allianz to offer embedded device and appliance insurance
Samsung Food provides services that can be accessible from a fridge or a phone
While opportunities for embedded finance are big, key challenges need to be addressed
Embedded finance driving conversion in each key phase of sales funnel
Payment experience and loyalty critical for consumers to choose shopping channels
Pinduoduo aided by partnership with Tencent and access to WeChat and WeChat Pay
Pinduoduo – the fastest growing retail e-commerce platform in China over 2017-2022
Mapan community commerce leveraged GoTo Group to expand
Ant Group and Razer enabled 7-Eleven Malaysia to accept GCash, Kakao Pay, True Money
Ant Group supports Shopify to enable its merchants for cross-border transactions
Airwallex enables Saturday Club remitting/collecting B2B global payment like a local
SleekFlow deploys multi-currency accounts and business cards solutions from Airwallex
Fuiou powers Amazon’s lending to sellers in China
IDFC and ICICI powers Amazon Pay Later for shoppers purchasing on Amazon India
NEC supports AEON for POS and CRM, while powering Mastercard for face recognition
Opportunities and challenges for embedded finance in retail and retail e-commerce
Digital social media, especially livestreaming and online shopping of games, gaining traction
Embedded finance powers the ecosystems of social commerce (s-commerce)
WeChat embeds local and foreign banks’ mini-programs to drive traffic and usage
Visa Direct and Checkout.com teamed up with Bigo to support cross-border payouts
Kasikorn Bank teams up with Line, while JP Morgan supports TikTok
The core asset of TikTok is its huge customer base globally
Embedded finance powers the ecosystems of video game software industry
Mobile games is less consolidated than online games and subscriptions
Adyen’s partnerships with Travian Games and Aliyoop
Nuvei powers Microsoft for payment, while Citi Bank teams up with NetEase
Airwallex powers World of Neopets for remittances and commercial cards
Opportunities and challenges for embedded finance in social media and games
Digital transformation: Barriers hindering digital effectiveness
Privacy and security key consumer concerns on embedded finance
Finance expertise, privacy and security critical for success in embedded finance partnerships
Euromonitor International’s cross-industry impact analysis to assist in formulating strategies
How to access Fintech topic page and Loyalty topic pages
Key definitions: E-commerce by platform
Key definitions: Retail e-commerce and streaming services

Consumer Finance

This is the aggregation of ATM, charge, credit, debit, e-purse and retail cards. Note that smart cards are not included in financial cards.

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