What You Need To Know About Embedded Finance

What You Need To Know About Embedded Finance cover

What You Need To Know About Embedded Finance

May 28, 2024

Recently the Canadian fintech startup, Teal, raised $8 million in seed funding. And with this news, the conversation around embedded finance has sparked once again. According to TechFundingNews, Teal adds accounting features to Vertical SaaS platforms, turning them into financial intersections that increase the use of services such as payments, invoices, and banking. Why does this information matter? It shows that embedded finance is becoming increasingly popular in the fintech industry. 

Embedded finance involves integrating financial services into non-financial products or services, such as e-commerce platforms, mobile apps, and other digital platforms. Essentially, it means incorporating financial services directly into the products or services that consumers already use, potentially changing the way Canadians access financial services.

Examples of Embedded Finance

E-commerce payment integration: One example is embedding payment systems into e-commerce platforms. Consumers can pay directly through the platform without needing a separate payment gateway or financial institution, making transactions more streamlined and convenient.

Mobile banking tools: Another example is integrating financial management tools into mobile banking apps. This allows consumers to track spending, set budgets, and manage finances in one place. They can also access additional financial services, such as loans or credit through their banking app.

Benefits for Canadians

Accessibility and convenience: Embedded finance makes financial services more accessible and convenient. Consumers can access various financial services through the platforms they already use. This is especially beneficial for Canadians who may not have access to traditional banking services due to eligibility requirements or living in areas without a physical bank presence. Embedded finance helps bridge this gap and provides more people with necessary financial services.

Cost reduction and efficiency: Embedded finance reduces costs and increases efficiency for consumers and financial institutions. It minimises the need for intermediaries and reduces transaction costs, making financial services more affordable and accessible for everyone.

The emergence of embedded finance will bring a significant shift in how Canadians engage with financial services. Through the seamless integration of financial offerings into existing platforms, embedded finance holds the promise of enhancing accessibility, convenience, and affordability for all users. With ongoing technological advancements, anticipation for further groundbreaking applications of embedded finance is poised to redefine the landscape of financial accessibility and user experience in the years ahead.

The Paramount Commerce team is thrilled to attend the Payments Canada Summit on May 29–31, 2024, at the Beanfield Centre in Toronto. Meet us there to chat about payments and innovation; we’re eager to connect with industry peers and share insights! Book a meeting with our team:  https://www.paramountcommerce.com/contact

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