Hi folks, Welcome to the bi-weekly Embedded Finance rundown. The past two weeks have been a bit more quiet on the infrastructure provider side, but luckily we had some interesting activities on the non-financial brand side. Let's dive in!

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Non-Financial Brands News

Non-Financial Brands are the 'Frontend' in Embedded Finance. By definition, these companies are not from the Financial Service industry but are offering financial products 'embedded' in their non-financial offering.

🇺🇸 Shopify adds direct bill payments in bid to be a single-stop fintech for merchants: Shopify extends its existing Fintech product portfolio and aims to increase the time that merchants are using Shopify products.

🇺🇸 GrubMarket Launches Payment Platform for Food Wholesalers and Distributors: B2B marketplaces tend to solve many problems but the payment process has often not been one of them. This is changing since a few years and GrubMarket now also covers this pain point.

🇺🇸 Apple launches savings account: The US tech giant is adding another financial product to its offering and unlike the previous ones, this is not aimed at payment/spending.

🇺🇸 GoDaddy offers merchants iPhone tap-to-pay: Offering financial products has been extremely complex in the past, with tap to pay solutions by Apple and Stripe, companies like GoDaddy can start this journey with relatively low effort - if their customers have a strong iPhone base.

🇦🇹 corplife Whets Appetite for Employee Benefits with Weavr Partnership: Employee benefits have been around for some time but due to Covid this trend has multiplied. Many providers start without a debit card product, like Corplife, but sooner or later these providers need to add it.

Share was founded in 2018 and is selling bottled water, cereal bars, caps and many other products via German supermarkets. As their brand name suggests, Share has a strong social angle and with every product sold, they provide a similar product to a person in need (e.g. for every water bottle sold in Germany they finance a water ration in emerging markets).

Now they launched their first financial product: a current account in cooperation with ING Germany (news; website). The bank account costs one Euro per month more than the standard ING bank account and ING contributes one additional Euro per month to the project. The bank account owner can choose which initiatives should be supported with these amounts.

The underlying bank account is a standard ING bank account and since Share does not have an extensive digital product offering, the solution is not really "embedded". It is an interesting product launch for the industry nonetheless with an interesting partnership. Basically, ING is bringing the 'banking offering' to the table and Share adds their brand and social angle to it.

I have mentioned before that more climate / social supportive banking products are likely to emerge and ING partnering with a brand like Share makes a lot of sense. It will be interesting to follow if additional financial products will be offered and how the partnership will evolve.

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Infrastructure Provider News

Infrastructure providers are the 'backend' of Embedded Finance and empower the non-financial brands to offer financial products. In this section, we cover pure technology companies, financial institutions or a combination of both.

🇬🇧 GPS rebrands as Thredd: The payment processing powers various Fintechs and BaaS providers. The change of name highlights that the market has changed fundamentally since GPS was founded in 2007.

🇸🇪 Intergiro and Incharge join forces: The Swedish BaaS provider is targeting financial and non-financial brands, and in this partnership with financial service provider Incharge is targeting students.

🇧🇬 Paynetics receives UK EMI license: The Bulgarian BaaS provider is operating in the EU and due to Brexit grandfathering rules also in the UK, but with their own UK license they show a long term commitment to the British market.

🇺🇸 Array launches debt manager embeddable tool: When non-financial brands start to offer financial products, they discover that surrounding services and tools are necessary. Array enables such companies to educate their own customers about their existing loan products.

What to embed?

Embedded Finance is shaking up different industries and the thinking behind it, is often the same: create additional customer value and turn this into increased revenue, higher customer lock-in and lower churns. When we talk about Embedded Finance, we typically refer to five different financial products: Payments, Banking, Lending, Insurance and Investing. Depending on the industry and customer needs, a non-financial brand can integrate one or more financial products.

But who says this can only happen with financial products? Let me introduce you to Gigs, an embedded telecommunication provider. Gigs enables any company to offer phone contracts to their customers. The company has been operating since a few years but just made Fintech news when they hired Rafael Plantier a former Nubank, Stripe and Tink manager. His goal? Enable financial institutions and Fintechs to offer phone contracts.

From my perspective, embedding a mobile phone contract into an non-telecommunication offering is quite similar to embedding a financial product into a non financial product offering. Both products are must have in many countries, the traditional frontends and product offering tend to be complicated, in-transparent and consumers often feel they are overpaying. Thus, embedding such products into a brand that customers already use and trust, could be a powerful offering.

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Insightful reads

🎤 Demystify Podcast: Demystifying embedded banking with Paul Staples: The former Head of Embedded Finance at HSBC shares his insights why Embedded Finance is so hot right now.

📦 How SaaS platforms can deliver on the all-in-one promise: Adyen provides their perspective on the opportunities of Embedded Finance and created an insightful post.

🔀 How Embedded Finance is Changing the Financial Operations Market

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