The ultimate guide to embedded finance

Embedded finance in the B2B space is the direct integration of financial services into a SaaS platform's brand and ecosystem. For platforms working with Adyen and selling to SMBs, this typically involves a core suite of four products: Embedded Payments, Capital (short-term, unsecured business loans), Accounts business bank accounts for pay-ins and pay-outs), and Issuing (physical or virtual credit/debit cards). This creates a white-labeled experience that allows platforms to offer these tools directly within their software under their own brand.

Embedded finance is changing the role of SaaS platforms from simple software tools into critical "financial hubs" that business users rely on daily. This shift unlocks huge new monetization opportunities, allowing platforms to capture profits that previously went to third parties.

By integrating embedded finance, platforms are actively closing the gaps left by traditional banks. Now, platforms can step in to provide customized, industry-specific financial solutions like fast access to capital or automated reconciliation that traditional banks often fail to deliver for SMBs.

Platforms integrate embedded financial services into their software through APIs and SDKs. Then, the platform can use the backend technology and banking licenses of their embedded service provider to build custom embedded financial experiences for its users. 

Most companies start with one embedded financial product, then use the data from that product to fuel growth for the next one. With Adyen, for example, you can use an SMB's payment processing history to automatically assess their eligibility for a business loan, which means you can automatically provide pre-approved capital without a lengthy application process.

We suggest asking four questions when choosing an embedded finance partner: 

• Do they offer a full suite of embedded financial products? Partnering with a single provider for multiple products (payments, capital, accounts, issuing) provides a single source of support and unmatched levels of inter-operability. 

• Do they have experience and deep integration capabilities? Because success relies heavily on integration depth, your partner must have proven experience and the development resources required to facilitate a direct, seamless integration.

• Do they have world-class compliance expertise in-house? The fintech space faces strict and increasing global regulatory scrutiny. You should look for a partner with deep, in-house compliance expertise to protect them from operational risks and service interruptions.

• Do they have global reach and local expertise? As your platform expands geographically, you need a partner with a global acquiring and banking footprint that can successfully navigate local market nuances.