The Covid-19 pandemic played a massive role in digitisation, specifically within the fintech industry. Many businesses were forced to diversify their offerings or risk failure. Through embedded finance, businesses are now integrating financial mechanisms into their business models.
What is Embedded Finance?
Embedded finance facilitates the integration of financial services into almost any business. This helps streamline access to financial services without having to divert a customer to a third-party organisation. Through embedded finance, a business can integrate financial services directly onto its website or mobile app, making it easier for their customers to access the services they need, directly when they need them.
There’s no longer a need to visit a physical banking branch to apply for credit. With embedded finance, you can purchase a product from an online store and get credit all in one place. Almost any business can now seamlessly integrate a number of banking products into their service offering, including loans, insurance, debit cards, and other financial instruments.
Embedded Finance and Traditional Financial Services Providers
Embedded finance will enable the underbanked population of the world to have better control over their finances, ultimately reducing their reliance on traditional banks.
With embedded finance, the offering of financial services and products no longer needs to be done through banks. This is because it is no longer necessary to have a banking licence to provide finance services. With embedded finance, almost any business can offer financial services and products to their customers.
Traditional banks are expected to face difficulties due to embedded finance. Fintechs will continue to thrive and grasp every opportunity they can building customised embedded finance solutions for businesses. For incumbents to succeed in this challenging and ever changing industry, they will either need to develop their own embedded finance tools or collaborate with fintech firms to leverage off of each other. Embedded finance is set to be a huge driving force of innovation in 2022, especially for incumbents who want to stay relevant.
Looking For an Embedded Finance Partner?
Traderoot Africa is a strategic financial software development company that provides advanced, global, PCI PA-DSS certified and validated payment solutions which leverage the latest technology to provide direct business benefits.
Traderoot Africa offers a number of white label embedded finance solutions including:
Traderoot Payment Pages
Traderoot Payment Pages is an online payment system that enables your merchants to accept payments on their websites. This product is certified and complies with Mastercard SecureCode and Verified by Visa requirements (3DS 1.0).
Traderoot Payment Pages ensures transaction data integrity, security and accuracy for transactions originating from the merchant’s website. By implementing a platform for secure payment technologies, your merchants are assured that transactions are managed with privacy, reliability and security.
The solution uses two-factor authentication between the merchant’s website and the payment software, thereby isolating the merchant’s web payments from public networks, which reduces the risk of fraud and gives them full control of their online payments.
Traderoot’s PSP–Channel is an all-in-one solution that can acquire, authenticate and route transactions across multiple channels in real time. It supports full functionality for all payment channels, including mobile, P2P, P2B, debit and credit cards, and prepaid cards. Traderoot’s PSP–Channel product ensures seamless and secure payment acquiring and aggregates the transactions into a single channel. The solution provides a uniform outcome, whether your customers make card-present transactions at an ATM, kiosk or point of sale, or card-not-present transactions such as e-commerce and m-commerce transactions.
Traderoot Merchant Reach
Whether you need to migrate an existing card switch or implement a new solution from the ground up, the Traderoot PSP–Channel solution can ensure easy POS system integration and real-time transaction processing. The solution extends the reach of the payment system to give you more control over transactions from the instant they are initiated, through any channel, to the time of settlement. This reduces the risk of fraud by increasing visibility
In the meantime, banks will need to behave as nimbly and innovatively as the fintech startups if they want to keep up with demand for digital finance services.