What is Embedded Finance?
Embedded finance refers to the integration of financial services into non-financial platforms or services. This means businesses outside the traditional banking sector can offer financial products like payments, lending, insurance, and investment directly within their own ecosystems. The growing demand for embedded finance is driven by several factors:
- It is convenient for end-users, who prefer seamless financial transactions within their daily digital experiences, such as making payments through ride-hailing apps or receiving financing at the point of sale.
- It is profitable for companies. They can enhance customer loyalty, optimise transaction processing costs, and increase revenue streams by offering tailored financial services. For instance, instead of refunds to a card, companies can propose instant refunds to a wallet, addressing the common issue of high refund costs.
What is a software platform for embedded finance?
A software platform for embedded finance provides the necessary tools, infrastructure, and APIs that enable non-financial businesses to integrate financial services into their offerings. These platforms act as the backbone, facilitating smooth execution of financial transactions and ensuring regulatory compliance.
What features are covered by the embedded finance software platform?
An embedded finance software platform typically includes the following features:
- Stored value account for storing customer balances.
- Payment orchestration module to support various payment methods, including credit/debit cards, digital wallets, and bank transfers.
- End-user profile management for customer support and compliance.
- Additional authentication for security.
- APIs that allow businesses to connect their applications with financial services seamlessly.
- Analytics and reporting for monitoring financial transactions, customer behaviour, and business performance.
What is the difference between BaaS and SaaS for embedded finance?
BaaS platforms provide the licensed fintech infrastructure and banking services needed to embed financial products into applications. They partner with traditional banks to offer services like payments, loans, and account management through APIs.
SaaS for embedded finance focuses on delivering software solutions while licensing remains with the organisation. SaaS platforms offer ready-to-use software functions that can be integrated into existing systems.
What are the advantages of SaaS or on-premise software?
Fintech Software as a Service (SaaS) and Banking as a Service (BaaS) both enable businesses to integrate financial services into their offerings, but they do so in different ways. Fintech SaaS offers several distinct advantages over BaaS, particularly in terms of flexibility, ease of use, and cost-effectiveness:
- You can run your software in any country (subject to basic worldwide trading rules and limitations). You are not dependent on the license of a BaaS provider, which can be tailored only for particular regions/countries and specific use cases.
- You fully own your data.
- You can fully control the software if you deploy it on-premise.
Veengu – a software platform for embedded finance
Veengu is an excellent choice when you need software for embedded finance. It can be used for the following use cases:
- Closed-loop wallets for retailers and marketplaces, enabling refund collection, cashback loyalty programs, and more.
- Closed/open-loop wallets for super apps, enabling the same functions as closed-loop wallets but also other advanced functions like incoming and outgoing transfers, utility payments, and cross-border remittances.
The Veengu team will help you tailor the Veengu software platform for your needs and integrate it with third-party payment providers of your choice.
Veengu has extensive experience in implementing its software platform for digital wallets, money remittance companies, and electronic money institutions (EMIs) across the Middle East and Africa. Our platform supports financial services of various sizes, catering to end-users ranging from thousands to millions.
Veengu offers flexible pricing tailored to your specific business needs. Our software platform enables you to maintain stored-value accounts for embedded finance services, run loyalty programs, accept incoming transfers, and send outgoing transfers through integrations with third-party payment gateways, payment service providers (PSPs), and partner banks. Additionally, the Veengu software platform consistently meets compliance and security standards during regulatory audits.
Want to know more about our embedded finance software platform? Contact us today!
