Uncovering Revenue Opportunities in 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.
Exploring Revenue Channels Built with Embedded Finance
1. Account Revenue
Through enabling branded bank 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 your 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 costs 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 debit and credit 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. Lending & Credit Revenue
Application processing fees, loan origination fees, and late payment penalties are just a few of the ways enterprises can create new revenue streams by delivering lending services. Enabling credit services also carries opportunities to collect interest, service fees, subscription fees, and annual fees.
5. International Payment & Cryptocurrency Revenues
When brands enable cryptocurrency exchange, or cross-border and global 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. Investment & Wealth Management Revenue
Modernizing asset and wealth management, embedded finance paves the path to offer financial features that assist existing customers in investment and wealth building. Lowering the barriers of entry to financial products that support wealth management, businesses can apply similar service and subscription fees to products like point-of-service lending, high-yield savings accounts, and asset management.
7. Promotional Programs Revenue
Unlike standard rewards programs, embedded finance powers innovative rewards programs that can be personalized at scale. Cash-back 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 purchase crypto, or international money wiring, provides a percentage to the business for every transaction. Embedding payment processing incrementally 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 uninterrupted access to their funds every day. Customer engagement is amplified and extended by providing all the financial tools needed to power customers’ lives.
Click here to talk to a member of our team about developing a revenue model for your financial services program or to learn more about how embedded finance can take your business to the next level.