What happened: A new study finds that 33% of SMEs in the U.S. have used an embedded finance product via a SaaS platform, compared to just 11% in the UK and 6% in Germany and France (TSG Payments). The global payment advisor PSE and analytics and consulting provider TSG analysed survey answers from 1,000 SMEs in Europe and the US.

According to the study, the major challenge is not a missing demand from SMEs in Europe for embedded finance solutions. Instead, European SaaS platforms have struggled to promote embedded finance and capture the interest of merchants.

My comment: Even if you are not the writer of an embedded finance newsletter, you will probably not be surprised that the adoption of embedded finance in the US is higher than in Europe (especially after reading this edition).

I am not going to go too deep into the reasons for this, but I want to highlight that the study focuses strongly on embedded finance use-cases from SaaS providers. It is important to understand that vertical SaaS companies tend to launch embedded finance products much faster than ‘traditional’ horizontal SaaS. And the US market is most advanced when it comes to vertical SaaS adoption. I do see a similar trend in Europe as well but likely smaller and a few years behind.