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Embedded finance: A game changer for B2B trade

23 August - 3 min read

Optimising and digitising payment processes and improving customer experiences are vital for businesses wanting to stay ahead of the curve. One significant development in this area is the concept of embedded finance, which involves integrating financial services, such as payment processing and lending functionalities, directly into a business’s existing software application or website.

In 2022, the global embedded finance market reached a value of USD 66.8 billion and is projected to grow to USD 622.9 billion by 2032. This trend has gained substantial traction across various industries, including eCommerce, Software as a Service (SaaS), and online marketplaces, and as buyers are increasingly embracing digital channels, the demand for frictionless payment experiences continues to grow.

Though embedded finance is already well-established for B2C transactions with, for example ride-share apps offering in-app payment options, or ecommerce platforms having digital wallets and financing options embedded into the checkout process, this concept is still evolving across business to business (B2B) trade. Access to more payment options that offer greater flexibility has now become the expected norm, and as technology continues to advance, we can expect embedded financial services to become even more sophisticated.

Keep reading as we delve deeper into the impact and importance of embedded finance in the B2B space.

How embedded finance drives efficiency for businesses

Across B2B trade, integrating financial solutions into existing platforms or processes to support the payment process ultimately empowers businesses to enhance their operations. This means suppliers can offer their buyers a user-friendly way to make invoice payments quickly and easily, and without being redirected to external payment portals.

For eCommerce players and online marketplaces, having the payment functionality integrated directly into the website becomes an integral part of the user experience, enhancing convenience and reducing friction during the checkout process. For traditional offline transactions, by using connected accounts receivable and accounts payable software that offers embedded financial services, it means being able view, manage and pay invoices from one convenient dashboard. It also means that buyers and suppliers are working from the same source of digital truth which removes the need for manual data entry and payment errors.

In both scenarios, the entire experience can be further enhanced by having the option to take advantage of on-demand lending solutions at the point of payment, which helps ease cash flow pressures and boost working capital.

Unlocking the benefits of embedded finance

By integrating financial services directly into software applications and websites, businesses can automate financial processes which reduces manual intervention and lowers operating costs. Here are some important advantages of enhancing the way your business accepts payments:

  • Accelerated digitisation: Embedded finance simplifies the payment process and speeds up the order-to-cash and procure-to-pay cycles, encouraging more businesses to use digital services.
  • Enhanced user experience: Customers can complete transactions within the platform, eliminating the need for redirections and reducing the chances of errors and late or missed payments.
  • Quicker payments and improved cash flow: When the payment process is streamlined, and where more flexible payment options are available, buyers are more likely pay their invoices faster, resulting in improved cash flow.
  • Better brand cohesion: Keeping the payment process within the platform ensures a consistent brand experience which fosters trust and loyalty.
  • Access to real-time data insights: Businesses can take advantage of valuable transaction data and analytics to make well informed decisions, optimise their offerings, and tailer services for better alignment with customer needs.

Supercharge your business with Spenda

As the demand for convenient payment processes continues to grow, embedded finance is set to become an integral part of the B2B landscape.

Spenda serves as both a technology solutions provider and a payment processor, delivering the essential infrastructure to streamline business processes before, during, and after payment events. Our comprehensive solution empowers businesses to effortlessly manage invoices, facilitate payments, and even access on-demand funding, all within the Spenda ecosystem. With our integrated platform, businesses can optimise their financial operations and enhance overall efficiency.

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