Hi friends

Welcome to the very last Embedded Finance Review newsletter in 2024. Personally, 2023 has been an extremely exciting year with many ups and downs (I am sharing some details in this newsletter). I can’t wait to take two weeks off over the holidays and recharge. The next newsletter edition will be in your inbox on January 14th or 16th, depending on whether I decide to go with Sundays or Tuesdays for sending out the newsletter in 2024.

Kudos to Shaul David for jumping onto the Beckham meme trend and creating an excellent embedded finance version of it. I hope it makes you smile, even if you are on Victoria’s side 😀

In this edition, I covered:

• 🏍️ Motoring and Cycling merchant Halfords extends its credit product offering.
• 📰 Non-financial brand news covers the first German city to launch a Social Card, SAP Concur embeds virtual cards, another bank makes losses on its partnership with Apple and more.
• 👨‍🎨 My personal review of the year 2023
• 📰 Infrastructure provider news covers companies such as Toqio, Liberis, Enfuce, Neem and Lithic.
• 🎙️ Insightful reads covers podcasts with Marqeta, NatWest Boxed as well as regulatory activities in the UK.

I wish you a great end to the year 2023 and hope that you have an even better start in 2024.

Until then,

Lars Markull

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Motoring and Cycling Merchant Halfords launches credit product

Halfords Group PLC, the UK’s largest leading provider of motoring and cycling products and services, has launched a credit product for its trade account customers. Personally, I have never set foot into a Halford store before, but the merchant is selling everything from car parts to new and second-hand bikes for your children. They have also partnered with Klarna, enabling their consumer customers to finance a purchase.

Besides the consumer business, Halford also serves more than 250,000 small business and enterprise customers. With the Halford Trade Card, these business owners were already able to participate in deals and discounts, and therefore, Halford could ensure to be the partner of choice for many of these businesses.

Halford is now partnering with Kriya (previously MarketFinance) and is enabling their trade account customers to finance their purchases. Cashflow is one of the biggest challenges for mechanics and tradespeople, who often have to purchase various car parts and keep them in stock until a customer needs that specific part. With the Kriya-powered solution, the business owner can receive these items first and pay for them at a later point in time, ideally when he is able to sell the item to their own customer.

The interesting part about the credit offering is that it does not only work on the Halford website but also in the offline store. Initially, a business owner has to apply and get approved for the credit product. After that, he can use the credit either on the Halford website or in one of their stores. I would assume this is an important key element in making the credit product for Halford and their customers.

Halford also highlights that the new embedded finance offering increases the efficiency of the overall business since many of the existing trade credit processes will be automated, thus improving the speed and quality of the customer experience.

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Non-Financial Brand News

🇩🇪 City of Hanover is the first German city to offer a Visa-powered SocialCard to refugees in partnership with Publk.

🇨🇦 SAP Concur launches virtual cards, empowering its customers to create and use virtual cards without leaving the platform. The product was developed in cooperation with Extend and the Canadian bank BMO.

🇬🇧 Airbnb launches Pay Over Time in the UK, in cooperation with Klarna.

Adjacent embedded finance news:

🇰🇪 M-PESA is taking a pivotal step into payments with a partnership with Visa. M-PESA will debut tap-to-pay capabilities, thus extending its virtual GlobalPay offering and setting its sights on the cash-reliant retail sector. M-PESA has over 60 million customers across eight African markets.

🇹🇼 foodpanda launches a co-branded credit card with CTBC Bank.

🇰🇷 Hyundai Card reports losses of more than $1.7 million following its partnership with Apple Pay.

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My personal 2023 review

Photo by Behnam Norouzi on Unsplash

There were many firsts for me in 2023. At the end of 2022, I had left the safety of a full-time job and decided to become an embedded finance advisor. There were many reasons for this decision. One of them was that I believed that many non-financial companies could benefit from embedded finance, but many didn’t know how. I was quite certain about that; what I didn’t know was how to find these companies and how willing they were to work with an external advisor.

But how did 2023 look for me? Excluding event sponsorship and a handful of small, one-time projects, I have worked with eleven companies in 2023. My first proper project started in March 2023, roughly three months after leaving my full-time job (including the Christmas season).

The eleven companies I worked with can be split into the following categories:

• Five non-financial brands
• Four Fintech infrastructure providers
• Two financial institutions

As you can see, only five of the eleven total customers were non-financial brands (and two of them are borderline non-financial brands, but I kept them in there due to the nature of the project). It is my goal to get this number to at least 67% in 2024. But four of the non-financial brands I worked with in 2023 were in the second half of this year, and thus, I am optimistic about achieving this goal.

At the beginning of this year, I set myself a goal in terms of revenue that was somehow realistic but still ambitious. I have just hit the goal this week, which I am very happy about since it took me some time to find projects at the beginning of the year and also because summer was really quiet for me. The quiet weeks in the European summer definitely feel different when you are self-employed ;-)

I have been asked many times in the past few months if I want to remain a self-employed advisor for a longer period of time or if I am planning to return to a full-time role. In the first half of the year, I didn’t answer this question and always said that I wanted to be in this position for a full year. In 2019 and 2020, I was already self-employed but after a year, I decided that I wanted to join a company full-time again, as I was not happy. This time, it’s very different. Back then, I did not have a strong focus in terms of projects and did not have a goal that I was working towards. Now, I am extremely happy with the setup I found, especially the newsletter, events, and a few other initiatives I am working on, which help me stay balanced in addition to the advisory work. Additionally, I had a massive learning curve this year and a bit of free time to support my wife’s startup. So yes, for the time being, I will remain in the self-employed advisor setup.

But I am not being naive, and I know that this could change in a couple of years. At the moment, the mix of advising with a few smaller projects is sufficient. If I want to keep this lifestyle, then the smaller projects need to become bigger and replace some of the advisory work, both in terms of time and revenue. This basically means starting my own business and selling products instead of time. That could be a potential path for me. Alternatively, I think it’s also not unrealistic that I will join a company at some point again. But instead of joining another fintech, it would most likely be a non-financial brand that wants to build fintech products. But it’s definitely too early for that; maybe in 2025 😀

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Infrastructure News

🇪🇸/🇬🇧 Toqio announces the evolution of its platform, which is now a fully customizable embedded finance orchestration platform.

🇬🇧 Embedded lending provider Liberis announced it has secured $112 million in debt financing to support its further growth in North America and Europe and expansion into new markets, including Canada and Germany.

🇫🇮 Issuer processor Enfuce announces it is expanding its partnership with Visa with the launch of the Visa Fleet 2.0 card. Unlike traditional cards used by fleet operators, the new solution is not restricted to specific retailers or products and can be used at any location accepting Visa cards.

🇺🇸 Infrastructure provider Lithic crosses $1 billion in annual charge card volume.

🇨🇦 Synctera launches embedded banking platform in Canada.

🇵🇰 Neem and Mastercard launch the first embedded finance partnership in Pakistan

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Insightful reads

🎙️ Podcast corner

• ‘Since the Diners Card, it’s just been a distribution game’; Marqeta’s Simon Khalaf explores the future of credit.
• Andy Ellis, CEO of NatWest Boxed, and Noah Sharp, new CEO of Vodeno, speak about their partnership, banking-as-a-service and more.

🧾 Innopay launches their Embedded Finance Radar.

🏭 Manufacturers favour digital giants over banks to deliver real-time payments.

🇬🇧 The Bank of England, PRA and FCA issue joint proposals to increase the resilience of the financial sector by overseeing critical third parties. At the same time, UK e-money licence approvals are up following the 2022 "disaster”.

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Job Board

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