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Embedded Finance

4 Embedded Finance Tools to Boost Your B2B SaaS Platform

The B2B SaaS industry is on fire — in a good way. Currently valued at $145 billion, the market is expected to grow 40% over the next two years as more businesses around the globe embrace the ease and convenience of using cloud-based software. 

As competition within the market continues to intensify and more players enter the space with the hopes of snagging a piece of the profits, brand differentiation has become a top-of-mind concern for B2B SaaS companies everywhere. Today’s tech-savvy consumers don’t just expect personalized experiences from their cloud-based software providers; they also expect their favorite platforms to deliver new digital technologies and services to better serve their everyday needs. 

One particular technology that many B2B SaaS platforms are utilizing to set themselves apart from competitors is embedded finance. Simply put, embedded finance is an invisible layer of financial technology that enables any brand or business to offer financial services directly to their customers. From bank accounts and branded credit, debit, and prepaid cards to payment processing products and digital wallets, embedded finance works behind the scenes to put the best tools of the banking world directly into the hands of non-financial brands. 

Why should your B2B SaaS platform consider integrating embedded financial services into its core offerings? Because the upsides are infinite. From improved customer experiences and streamlined financial components to lower churn rates and enhanced core offerings, embedded finance has the ability to elevate your platform’s offerings and increase brand loyalty.  

Here are four embedded finance tools that can enhance your B2B SaaS platform.

 

Accounts

Imagine being able to offer your users branded bank accounts for all of their platform-related activities. This would not only give customers an easy way to pay for their subscriptions and manage their money, but it would also empower your platform to create a self-contained sustainable ecosystem that drives customer loyalty and minimizes churn. 

In the world of embedded finance, accounts can be thought of as the bedrock foundation that sets the stage for SaaS companies to offer different financial products and services. When your platform works with an embedded finance company like Alviere, it gains the ability to offer checking accounts and savings accounts to customers. These accounts can then be used to make purchases, pay bills, and transfer funds locally and internationally on a 24/7 basis.  

For SaaS platforms that help small businesses manage their growth, bank accounts can also be a pivotal tool when depositing funds, receiving sales deposits, and paying bills and outside vendors.

 

Payments

Most B2B SaaS platforms offer customers some type of standard payment program to minimize friction points. While these programs are designed to make it easier for users to pay for their subscriptions and other platform-related costs, they typically don’t add much value to a platform’s bottom line. 

But when a B2B SaaS company uses embedded finance to fuel its payments program, it unlocks real-time payment processing power for instant bottom-line control. 

For example, say your SaaS company decides to offer branded bank accounts to its customers. The users are able to easily add funds to those bank accounts so they can seamlessly pay for their subscriptions and other platform-related purchases. Sounds like a typical payment program, right? Wrong. When embedded finance enters the picture, all of the funds and payments that move through the branded bank accounts are considered “in-network payments.” Because of this, your SaaS platform gets to bypass the transaction fees and delayed settlement times, which can add up to huge numbers on balance sheets. 

 

Card Issuing

Offering branded cards is a great way for your B2B SaaS platform to stay engaged with its customers. When you work with the right embedded finance partner, your SaaS becomes the sole issuer of all branded credit, debit, and prepaid cards. This not only allows your platform to bypass costly card processing fees, but it also enables your SaaS to:

  • Collect new revenue: Every time a customer uses your platform-issued card, your SaaS captures a portion of the transaction revenue, known as the interchange. Typically measured at 1% of a transaction, interchange fees can add up quickly and be funneled directly into your bottom line.  
  • Capture first-party transaction data: By issuing open-loop cards, your platform gains instant access to the spending data that once went straight to the banks. Seeing where, when, and how customers spend with your cards lets your platform create unique reward opportunities that can be tailored to individual users. For example, Toast Capital utilizes first-party transaction data to analyze the account cash flow of the restaurants they service. With that data in hand, Toast can then offer its clients short-term loans or funding for new ventures. 
  • Offer meaningful rewards: Personalized perks have the power to keep customers coming back to your platform again and again. With embedded finance, the rewards that your company can create are limitless. For example, to encourage customers to spend with your card, your platform could provide cashback savings for every $5 spent. Or, to entice customers to join your platform as they near the end of their free trial period, your SaaS could create a new program that focuses on driving adoption rates by offsetting subscription costs. 
  • Provide unique tools: Prepaid cards are one of the most versatile tools that a B2B SaaS platform can offer. Whether your users need to issue expense cards to their employees, payout commissions, create new customer adoption incentives, or issue refunds, prepaid cards can do it all.
  • Get creative: While cards come in various shapes and sizes, one thing is certain: with embedded finance, your B2B SaaS platform gets its unique logo printed on every card it issues. And the best part? No sharing! Because a traditional bank didn’t issue the cards, your platform isn’t required to share any of the “real estate” on the front of the card. This means your company’s logo is the main attraction — which is great for marketing outreach efforts and helpful for creating brand affinity.

Lending 

A B2B SaaS platform is oftentimes the first place that a small business will turn to when it’s looking to grow. It’s no secret that cash flow is one of the most important components of sustaining a small business, but many traditional financial institutions make it challenging for these businesses to gain access to credit.  

With embedded finance, your B2B SaaS platform has the ability to use account cash flow data to measure a small business’s creditworthiness — something that traditional banks can’t typically do. From there, your platforms can then issue credit in the form of a credit card or a small business loan.

 

It's Time for Your SaaS to Do More

In 2021, there were more than 25,000 SaaS companies doing business around the world. As the industry continues to grow, now is the time for your B2B SaaS to differentiate itself from the crowd. 

At Alviere, our mission is to enable your platform to do more for its customers. We offer a full suite of embedded finance products and services that are designed to deepen customer relationships, increase retention rates, and enhance your core offerings. 

Reach out to us today to see what embedded finance is all about. 

Written by Sammi Jones