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Embedded Finance

How Embedded Finance is Transforming Online Marketplaces

The Evolution of Online Marketplaces

Amongst the thousands of online marketplaces today, the ease of digitized buying and selling has never been more convenient. The old days of not finding exactly what you need in the local store has transformed into everything you could possibly need, being readily available, and only a click away from purchase and delivery. 

Furthermore, the opportunity for anyone to independently sell their own products and services through B2B, B2C, and P2P online marketplaces has propelled the way the world conducts financial business on a global scale. Merchants in their respective markets can now cater to larger consumer bases, breaking past previous geographical barriers, and users can access unlimited categorized products based on personal needs, wants, and price. 

In this evolution of marketplaces, the ever-changing landscape of e-commerce has always called for seamless, innovative customer experiences no matter the niche, product, or service, for both buyers and sellers alike. 

So what’s really the next step in the advancement of online marketplaces, especially with the fast-paced growth of competition

What will be the deciding factor in being the digital marketplace of choice to the many instead of the few? And how can online marketplaces improve to better serve merchants and users while continuing to move the world into the future? 

 

The Entrance of Embedded Finance

As the pioneers of e-commerce, competitive marketplaces are now branching out, initiating a new class of financial experiences across the world. Embedded finance has arrived, making its grand entrance with style into the financial ecosystems of enterprise online marketplaces. 

Marketplaces will soon be the major facilitators of embedded financial services; and with a predetermined market cap of $7.2 trillion globally by 2030, it’ll be hard to ignore the social influence and economic impact EmFi will have on the transformation of these marketplaces. 

By capturing customers where they interact most frequently in their daily lives, marketplaces are beginning to offer highly specialized financial tools and services fulfilling the increasing demand for decentralized financial accessibility worldwide. Online marketplaces will soon change how all financial products and services are distributed and consumed, almost everywhere. 

The emerging necessity to directly offer customers financial solutions expands business strategies around demands that are unchanging, and in turn further monetizes customer bases for a lifetime of growth, enhanced value, and greater profitability. 

 

Out with the Old, In with New Revenue

The true power of embedded finance allows your online marketplace to provide customers with upgraded engagement and loyalty tools that in turn provide the small businesses on your platform the opportunity to access business banking services tied directly to their sales on your marketplace. In partnership with Alviere, online marketplaces can drive new revenue streams by making money on all transaction types taking place on your platform, via branded bank accounts issued to small businesses on your own behalf. 

If your marketplace offers users the opportunity to purchase crypto, it gets a piece of every transaction. If your marketplace enables international money wiring, it gets a piece of every transaction. If your marketplace embeds payment processing, it gets a piece of every transaction. When marketplaces take back ownership of their financial processing services and networks, the interchange fees that formerly went to the bank are now feeding back into your bottom line. Countless new streams of revenue are created, and countless opportunities to better serve customers where they need it most are fulfilled. And that’s just the beginning. 

Imagine a frictionless shopping journey where users don’t have to leave your platform to complete their purchases. Imagine credit solutions and instant payment features for vendors and contractors all in one place. And imagine the cultural connectivity of exclusive branded debit cards, and providing merchants uninterrupted access to their hard-earned cash every day with instant payouts. 

Offering diverse financial services like branded bank accounts, peer-to-peer eWallet payments, ACH/EFT transfers, cross-border remittance, prepaid cards and customized gift cards to both merchants and users would not only skyrocket customer lifetime value, but customer experience is amplified by providing all the tools needed to power your customer’s financial lives every day. 

Additionally, providing the financial tools that reduce the dependency on traditional banks opens the expansion of addressable markets, increasing customer adoption among the unbanked and underbanked populace. By allowing customers to bank with who they want to, instead of who they have to, online marketplaces can truly deliver the type of highly personalized financial services people have been waiting for. 

 

Finally, Take Control of Your Financial Network. 

Now that an online marketplace can own its financial network, you possess direct access to all of the transaction data as well. The same data banks use for their own financial gain is now private to your marketplace. This governing access to spend data can better align your marketplace with consumer spending habits and preferences, being able to see when, where and how card users are spending money 24/7. With complete financial transparency, your marketplace can boost core profitability through advanced analytics of spending data, target unrealized revenue through strategic marketing partnerships, and hone in on future promotion opportunities that can better serve your unique customer base. 

The flexibility and scalability of your marketplace is now unrestricted with access to next-level consumer insights. Your marketplace can now more efficiently track the supply and demand pipeline at massive scale, and in turn strengthen marketplace incentive alignment for both merchants and users, enhancing rewards programs with the data received directly from consumer spending. Whether offering exclusive discounts, merchant-specific cash-back options, or activating targeted rewards programs, online marketplaces can fuel brand advocacy in new ways progressing customer retention and solidifying customer lifetime value. 

 

The Perfect Embedded Finance Partner

Now, this can only be successfully achieved by having an embedded finance partner with the right internal support for cloud API infrastructure and the in-built security and compliance needed to make embedded finance work. This is exactly where Alviere comes in. Alviere provides the most complete embedded finance platform available today, allowing the world’s most visible, trusted, and beloved online marketplaces to offer financial services to their customers for the first time. 

So how exactly can Alviere really elevate the core of any online marketplace? 

Alviere’s platform and services allows any online marketplace to integrate new financial services into existing lines of business to dramatically increase profits, deepen customer relationships and insights, and increase satisfaction and retention. Offering financial solutions like branded bank accounts, eWallets, debit cards, and direct deposit accounts only scratch the surface of how marketplaces are extending their business offerings into a more profitable future while capitalizing on the endless potential of adopting embedded finance. 

The real beauty of embedded finance is that it streamlines all financial processes happening in real-time into one place- shifting marketplaces from platforms where you only make or spend money to platforms where you can make, manage, access, store, send, and spend money. 

This shift isn’t complicated or hard to implement either, with low investment and low risk, the ease of getting started without costly rollout or heavy legwork can increase speed to market, and get ahead of the competition even quicker.  

 

Embrace the Journey to Better Financial Services

When online marketplaces embed financial services, an endless upside of business opportunities emerge, forging the future of financial innovation, with your brand at the forefront. 

As this latest emerging trend of the fintech revolution is sweeping across the world, marketplaces in all sectors are finally adopting the integration of specialized financial services directly into their digital footprints for the foreseeable future. And for what it’s all worth, many progressive digital marketplaces are definitely taking the leap into the world of EmFi

If you’re interested in learning how embedded finance can take your online marketplace to a new level of providing best-in-class customer experience, contact us today. 

Written by Alviere