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Behind the Curtain: A Look at Modern Card Issuing for Fintechs & Embedded Finance


Seamless, Embedded Finance Experiences

As consumers and businesses increasingly look for convenient ways to pay, the race for digital transformation in both financial and non-financial businesses accelerates. Seamless, embedded finance experiences not only drive loyalty and new user experiences but can have a substantial flywheel effect on growing a business. The evolution of financial experiences has highlighted a need for embedded finance and modern card-issuing solutions to meet the expectations of changing behaviors.‍

What is Embedded Finance?

Embedded finance enables non-financial companies to seamlessly offer financial services, often branded for the company. With API integrations, businesses of any size can embed financial experiences into their core product without the need to redirect customers to a bank, broker, finance or factoring company, FinTech, or Insurer. By providing the right offer to the right customer at the right time, businesses can significantly boost engagement and loyalty. 

In the same way that Uber made payments an invisible experience (a person needs to get from Point A to Point B and can easily choose the vehicle type, time, and locations on the app without taking extra steps to make a payment), embedded finance is making it easy for people to go from Point A to Point B in the user experience and encounter frictionless, highly personalized financial offers along the way.

Challenges to Modern Card Issuing 

Historically, the ability to harness the power of embedded finance and modern card issuing has been reserved for banks and large organizations that have the infrastructure, in-house teams, and budget to bear the weight of technology and compliance requirements. While the ability to create embedded experiences has expanded to a broader audience more recently, there are still challenges that businesses face: 

The Democratization of Embedded Finance and Modern Credit Cards for Business

Many businesses today may not realize they can now offer innovative payment options to their customers. We’ve listed some verticals and card types below to demonstrate the flexibility that modern technology enables. 

Online Lenders 

Credit cards can be a valuable turndown program for lenders. Customers that aren’t a fit for the lender’s credit box can transform a straight decline into a credit card offer. For example, if a customer applies for a $20,000 loan but does not qualify, a lender may offer that customer a $5,000 limit credit card instead. This is a win-win proposition as the end customer gains access to capital and the lender earns an opportunity to build loyalty with a customer who may qualify for a larger loan further down the road.

B2B Vertical Operating Systems 

Platform providers that help small businesses manage everything from appointment-setting, marketing, and invoicing to payments and more have the potential to offer their business customers additional opportunities for capital in the form of credit cards. With access to real-time performance metrics on each of their business customers, these platforms can seamlessly offer credit card options to qualifying customers when they need it most, deepening that relationship. Helping customers enhance cash flow, manage expenses, and be rewarded for everyday spend.

B2B Marketplaces 

B2B marketplaces and platforms that enable businesses to sell products to other companies can also use credit cards to boost loyalty and offer unique financing options to customers. Credit card offers with customizable repayment terms can help business customers with cash flow and improve the marketplace’s customer relationships. 

Commercial Cards 

A wide range of companies can also issue commercial cards that can help with cost controls and policy enforcement. Fleet cards, for example, can be highly tailored with controls that dictate what parameters must be met for the card to be active (spend limits, digital signals/triggers, and other inputs).

Rewards Cards 

Many businesses can also benefit from bespoke rewards programs built into cards. A property management software company may issue credit cards to landlords and property management firms that include merchant-linked offers (like 15% off at a home improvement retailer, which also provides funding). Without a credit card, users may only tap into the property management software weekly. A tailored credit card offering is a way for businesses to engage with customers daily. 

While loyalty and customer relationship-building are key benefits of credit card programs, credit cards also increase stickiness and wallet share, decrease churn, and increase the lifetime value of the customers, all via the top-of-mind branding that credit cards embedded into core products enable. 

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