Insights in Five:
Is Embedded Finance the Future of eCommerce?
A Suzy Micro Report
June 2022
Insights in Five:
Is Embedded Finance the Future of eCommerce? Embedded finance, or when nonbanking companies integrate financial services and tools into their products and services, offers convenient ways for consumers to shop. The opportunities are also seemingly endless, from embedded payments and insurance to digital wallets and one-click checkouts. So, what do consumers think about the embedded finance in their lives, and about the opportunities in the future?
32% of consumers say it’s very important for a financial tool or platform to be convenient.
32%
TAKING A DEEPER LOOK:
Consumers are most interested in using these financial services from companies:
41% Credit cards (i.e. airline credit cards, Amazon Credit Card, Apple Card, etc.)
39% Payment options on ecommerce sites
28% One-click checkout
26% Buy now, pay later
That’s good news for embedded finance offerings since they can help speed up or simplify the process for consumers.
Consumer adoption is low for embedded finance tools within insurance, extended warranty and financing.
47%
12% Currently purchase insurance
Nearly half (47%) of consumers are comfortable with storing their financial information within a nonbanking app, like Uber, Apple Pay, or Starbucks Rewards.
11% Currently purchase lending or financing options
6% Currently purchase extended warranties
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The top factors that appeal to consumers about using financial services from a nonbanking company are:
Key Takeaways Convenience At All Costs
32%
Faster payments
33%
More payment options
44%
Whether it’s increased options on ecommerce sites, one-click checkouts, or buy now, pay later, consumers want choices when they pay. Preferably, those options make check-outs faster too. By integrating with more platforms where consumers shop, embedded finance companies have an opportunity to offer convenience and change the way consumers shop.
Take Preferences Into Account While consumers are comfortable storing financial info with companies, they were split when asked if they’d be interested in using a checking account from a nonbanking institution such as Amazon, Apple, or Uber. Companies can lean into brand-owned credit cards instead, like the Amazon Credit Card. They’re convenient, and nearly half of consumers are interested in using them.
Convenience
Add-ons Have Some Work To Do 44%
Ability to earn store credit
Not only is adoption low for add-ons like insurance and financing plans, consumers aren’t that interested in those options either. Reviewing a policy or filling out an application for financing isn’t very convenient, even when it is tacked on to a shopping cart. If insurance and financing providers can offer faster options for their products, they may see better adoption.
Bottom Line: Convenience is key. The more embedded finance brands and nonbanking companies can offer new and faster payment options, the better.