Uncovering revenue opportunities with Embedded Finance
Embedded finance creates the ultimate opportunity for enterprise organizations to fuel new sustainable revenue streams. By enabling customers to maintain access, usage, and multiple touch-points for different financial products and services, customers continue to re-engage constantly. While boosting customer engagement with core products and services, the everyday usage of versatile financial products can result in higher revenues across multiple digital channels.
Let’s explore the revenue channels that can be built with an embedded finance program.
1. Account revenue
Through enabling virtual accounts and digital wallets, businesses can assign customized bank and wire transfer fees, mobile check deposit fees, monthly maintenance fees, and overdraft fees at their own discretion. Being able to actively control revenue channels, digital banking services can also empower payment revenues and card revenues — directly contributing to the bottom line.
2. Payment revenue
Transaction fees from payment processing formerly went directly to a bank. Through an embedded finance program, transaction fees are collected solely on your own platform and can be offered at lower cost than a traditional bank. Your business makes money on all transaction types taking place on your platform, creating unlimited potential for revenue growth and expansion.
3. Card revenue
Every card tap, swipe, or purchase earns interchange fees. These fees are collected from branded cards used on your platform and out in the world. Card revenues are derived from custom fees, card issuance, chargeback fees, and ATM usage.
4. Yield
When customers hold funds in a branded account or wallet, the business earns interest on those funds. Customers can spend directly from the account or wallet, or have an attached debit card for everyday purchases anywhere. Stored value wallets will also earn interest as customers add money to pre-fund their next purchase.
5. FX and remittance fees
When brands enable cross-border money transfers or remittances, there is an opportunity to capture foreign exchange fees, wire transfer fees, and peer-to-peer (P2P) payment fees while lowering the cost of services for customers. Enterprises can participate in the global financial exchange, scaling into new global markets and expanding customer acquisition by empowering financial accessibility and inclusion on a global scale.
6. Promotional programs revenue
Unlike standard rewards programs, embedded finance powers innovative rewards programs that can be personalized at scale. Cashback rewards, digital wallet top-ups, and interchange fees from gift card usage are possible, all while keeping breakage in-house. Businesses can avoid losing funds from rewards programs through just-in-time funding, a method of automatically funding an account in real-time during the transaction process.
Build revenue streams that last a lifetime
Every transaction brings a percentage to the business. Offering customers the opportunity to send money abroad provides a percentage to the business for every transaction. Embedding payment processing adds revenue from every transaction. When businesses can take back ownership of their financial processing services and networks, new streams of revenue are created, and customers are better served where they need it most.
Imagine a frictionless financial experience where customers don’t have to leave your platform to complete their purchase and have access to any financial product they may need. And imagine the customer connectivity from exclusive, branded digital banking services, providing customers with unfettered access to their funds every day. Customer engagement is amplified and extended by providing all the financial tools needed to power customers’ lives.
