Spokesperson: James Butland, Managing Director UK, Mangopay
Consumers are once again driving a new type of demand— financial services embedded directly into everyday platforms. What was once a competitive advantage has now become essential for modern businesses, and this shift is unlocking new revenue streams, reshaping brand loyalty, and transforming how consumers engage with financial services.
With the average British worker spending £64 a week online and Britons collectively spending £1 every three and a half minutes on internet shopping, the digital economy is more active than ever. This surge in online spending underscores the growing need for frictionless payment experiences.
From e-commerce to fintech, platforms are expanding rapidly to offer intuitive, frictionless financial experiences. Digital wallets; Buy Now, Pay Later; and integrated payment solutions are becoming the norm. With the global embedded finance market set to reach $588.49 billion by 2030, the opportunity to adapt is ripe.
Despite inflation and financial instability, platforms continue to defy the odds, showing remarkable adaptability in a challenging environment. This diversification has driven market growth and increased consumer engagement. Industries are integrating at an accelerated pace. Fintech is merging with retail, delivery services are partnering with restaurants, and on-demand services are embedding financial tools into their offerings. This evolution is one you can’t ignore and one you can’t afford to get wrong.
Consumer loyalty, meet embedded finance
Today, loyalty is everything, but it’s not as simple as it once was. Consumer loyalty is evolving beyond traditional rewards programmes and exclusive offers. Instead, customers expect experiences that resonate with their needs and preferences,, and personalised financial solutions, and the convenience of accessing these tailored offerings
Embedded finance helps businesses develop lasting relationships by integrating financial tools into their platforms, making transactions frictionless and increasing user engagement. For example, account-based ecosystems, where registered members interact frequently with a platform’s embedded financial services, have proven to be a winning strategy.
These ecosystems enable businesses to encourage frequent engagement by offering in-app financial benefits such as cashback and exclusive rewards. It can also create closed-loop financial ecosystems where users are incentivised to store and spend money within a single platform. Furthermore, it provides tailored financial products, such as micro-loans or flexible payment options, based on individual consumer behaviour.
Loyal registered members, in turn, enjoy various benefits such as access to exclusive products and services, discounts, and other perks. Loyalty programmes make these memberships even more attractive by helping platforms expand their customer base and increase customer lifetime value.
Accelerating business growth through wallets
Wallet infrastructure is a game-changer for businesses. This technology allows users to store funds, make transactions, and receive payments without relying on traditional banks. This feature is especially beneficial for gig economy platforms, e-commerce businesses, and on-demand services where instant and seamless payments are essential.
There are numerous benefits for platforms that integrate wallet infrastructure. Firstly, it reduces customer acquisition costs. A unified and embedded payment experience improves customer retention and reduces the need for external payment providers. Platforms can also leverage this technology to expand their market reach, by offering localised payment solutions and multi-currency wallets. This capability also allows businesses to generate income from transaction fees, foreign exchange conversions, and other financial activities within their ecosystem.
Wallet infrastructure also enables platforms to hold stored value, allowing users to deposit and retain funds within the ecosystem. This creates a cycle of repeated engagement and new monetisation opportunities. Stored value mechanisms, including prepaid balances, gift cards, and digital wallets, are another way to generate additional income. However, it also provides users with compelling reasons to remain engaged with a platform rather than seeking alternatives.
A shake-up for traditional financial institutions
As embedded finance gains traction, financial platforms are redefining the way consumers engage with financial services. While traditional banks remain essential for account holdings, their dominance in everyday transactions is being challenged by fintech-driven experiences that prioritise convenience, speed, and personalisation.
A study shows that 42% of UK consumers use digital wallets for online payments, while younger generations such as Gen Z (19%) and millennials (12.5%) rely on them for peer-to-peer transactions. These trends indicate a growing preference for intuitive and flexible financial tools with users gravitating towards platforms that seamlessly integrate financial services into their daily lives.
To stay relevant, financial institutions must evolve beyond legacy banking models and offer fintech-like experiences. By embedding finance into their ecosystems, whether through strategic partnerships or in-house innovation, they can enhance user engagement, retain their customer base, and compete effectively in the digital landscape.
What’s next?
Embedded finance represents a fundamental shift in the way businesses and consumers interact with financial services. It is redefining convenience, loyalty, and revenue generation, making it an essential component The next phase of consumer interaction is already here, and embedded finance is at its core. Businesses that embrace this transformation will not only stay competitive but will also shape the future of seamless financial experiences.
Embedded finance isn’t the future, it’s happening now. Are you ready to lead the way?
