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12 May 2022

Is Plug-and-Play the next leap forward for embedded finance?

Embedded finance has developed quickly over the past few years and we’d go as far to say that it was the buzzword of 2021. As new solutions are developed and improved, uptake is surging in every industry as innovative businesses are empowered by the possibilities of integrating financial services with digital platforms. ​​Now 56% of retailers and ecommerce companies in Europe are either planning to ramp up their embedded finance offering or launch an offering in the next 12 months.

But even with those huge advances, mainstream adoption of embedded finance is still a long way off. Significant barriers remain for most businesses, in particular for non-technical innovators and smaller startups who don’t have the time, resources, and technical expertise to integrate and build out complex solutions. 

Many businesses aren’t even getting as far as these hurdles. There’s still a huge awareness and education need as to what embedded finance is and why it should be a strategic priority for all digital businesses. 

But so long as those barriers are up, adoption by smaller platforms will always be out of reach. Embedded finance needs to be easy to understand and implement. And that’s why we are approaching it from a new direction – with plug-and-play. 

What do we mean by Plug-and-Play Finance?

With embedded finance we can get caught up talking about how its seamless payment flows makes life easier for the end consumer – and for good reason. 

But for innovators to offer that in the first place, their experience of implementing embedded finance has to be just as painless. And sadly that’s usually not the case. 

Even with the landscape of solutions constantly evolving, the barriers can still feel too steep, especially for smaller innovators. It’s not just the time and money it takes to implement everything, it’s also the depth of technical understanding you need to wire it all up to your platform. Sometimes it can feel like going to buy a car and needing to know the inner workings of its internal combustion engine before you can take it home.

Plug-and-Play Finance is about enabling the simplicity that embedded finance needs. There’s no need to grapple with the infrastructure and compliance that’s under the hood. With a plug-and-play solution, you can simply take the lo-code keys and start driving.

Simplicity leads to speed

When the barriers of complexity surrounding embedded finance come down, it doesn’t just mean fewer headaches for innovators. It also means they’re able to integrate and deploy their solution in a fraction of the usual time.

Plug-and-play makes embedded finance as simple as tools like Shopify and WooCommerce make adding a checkout to your website. With a library of Financial Plug-ins on offer, it’s as easy as choosing a solution and dropping it in.

There aren’t months of build time or extensive costs to factor in, and you don’t even need to build out the control suite because that already exists. Where embedding individual financial services used to stretch your runway out into the distance, a comprehensive plug-and-play option means innovators can now get up and running in a matter of a few weeks.

Financial Plug-ins aren’t just a shortcut for non-technical innovators either. The need to get up and running fast remains the same whether you can build in a traditional embedded finance solution or not, and engineering resources are always limited.

In the agile startup world, every day you spend going the long way round is a day you could have been generating revenue and getting the jump on your rivals. If you’re trying to get to market, you’re going to go for the most efficient option that needs the least engineering resource.

Ready to scale with you

Innovators don’t just need speed when it comes to launch, they need it for when they scale, too. Most rapidly growing businesses want or need to expand internationally. But usually they need to add a new embedded finance partner every time they enter a new market.

The problem with embedded finance is that most platforms work in one region, e.g. the UK or the Eurozone. That means potentially finding new partners for the new region you’re moving into. It’s yet another barrier.

The point of international scaling – or extensibility as it’s often referred to – is another of the challenges we wanted to directly address when designing Plug-and-Play Finance. You want the solution you implement to just work and just work everywhere. It has to be like that for embedded finance to serve the mainstream.

With traditional embedded finance systems, the introduction of new features is always limited by the time it takes to integrate the software powering your new capabilities. But with a plug-and-play solution, every time a new service is launched it’s available to you right away without needing to build anything new in.

When you’re not integrating new, complex pieces of software, you also won’t have to hunt for more specialised financial infrastructure engineers each time you’re ready to offer new features. And most importantly, you won’t have to wade through oceans of red tape either. Instead you’ll have a future-proofed platform that’s ready to scale in no time at all.

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Whether your offering is an application, marketplace, or platform, if you’re looking to embed finance into your business, set up a meeting with one of our experts in your industry and request a demo today.

 

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