“Finance is not a mathematical puzzle,” wrote economist John Kay in his post-financial-crisis tome, “Other People’s Money”. Instead, Kay reminds us that “finance exists to serve households and businesses”.
The point may sound obvious or prosaic but it’s one the financial services sector does well to remind itself of. Embedded finance, and what it represents in terms of the partnership between fintechs and the real economy, has advantages for several groups – not least merchants. Let’s talk about how to define embedded finance, why it’s on the rise and how merchants can benefit from the value created by it against the backdrop of challenging economic times.
What even is embedded finance?
Fundamentally, embedded finance refers to integrating financial services and products into non-financial products and services, such as mobile apps, social media platforms and ecommerce websites. This allows companies in non-financial sectors to offer financial services to their customers without having to build a financial infrastructure from scratch.
For consumers this…