The US corporate expense management provider Brex announced that it is launching an embedded product (Brex Embedded). Does this mean that US companies have another banking-as-a-service provider to choose from? Well, not really. Let me explain.
The product name ‘Brex Embedded’ should be taken quite literally. US companies cannot use Brex to embed a white-label card product with their own branding, but they embed actual Brex cards. This may sound small, but it is quite an important element. Don’t get me wrong, I am also excited that Brex made this move, and this could be very beneficial for them and the market, but it is not another provider as we know it.
Therefore, the opportunity for Brex is actually twofold. Firstly, it will generate additional revenue with each partnership. They will likely directly charge their customers for the product usage, and they will most likely also retain (part of) the interchange. As we all know, the latter could easily be a multifold of the former. Secondly, the company will be able to use its new Brex Embedded partners as additional channels to acquire more customers for its core product. Brex might have a strong brand name in the US industry, but obviously not everybody uses them. What if your business relies on a specific industry ERP tool that launches a Brex Embedded integration with a strong feature set? This will likely be the strongest push for you to use Brex, even if you had decided previously against using Brex. On the other hand, the companies integrating Brex Embedded will have to think very carefully about how hard they want to push such an integration.
And if you wonder if something similar providers have tried already something like this, let me remind you of German corporate expense management provider Pliant. In addition to the credit card-powered expense management solution, it offers Pliant card-as-a-service. The major difference is that this product can be white-labelled, and embedders can apply their own brand.
