ConnectPay is an enabler of Embedded Finance, offering financial solutions with built-in compliance for online businesses, mostly focusing on marketplaces and platforms. As an all-in-one financial services platform, we give our clients the ability to choose financial modules tailored to their specific operational payment needs, eliminating the necessity to have multiple financial solutions providers. Through one API, clients gain access to fast, omnichannel solutions, including multicurrency accounts, SEPA and SWIFT payments, currency exchange, and white-label cards.
Our target group is quite broad and includes diverse e-businesses that could benefit from our offer of integrated financial solutions rather than scattered products. Specifically, we focus on B2B2B and B2B2C online businesses, platforms, and marketplaces. These include crowdfunding platforms, retail businesses, loyalty programmes, neobanks, and fintechs. We also cater to sports clubs with dedicated fan bases, like football and basketball clubs, who use digital platforms to improve fan engagement and streamline transactions during events.
Embedded Finance can benefit any business that engages in frequent transactions and therefore requires access to reliable and streamlined financial processes. For instance, online B2B2B and B2B2C platforms can use integrated payment solutions to simplify transactions between vendors and buyers, while crowdfunding platforms can use embedded financial tools to efficiently manage contributions and the distribution of funds.
Embedded Finance can also help solve problems related to traditional banking limitations. Neobanks and fintech companies, for example, can utilise Embedded Finance to offer tailored financial products that traditional banks may not provide, such as microloans or specialised insurance products.
In all cases, Embedded Finance can help ensure that businesses adhere to strict compliance regulations while providing a seamless financial experience for their users. When financial services come with built-in compliance, businesses can rest assured that compliance is being taken care of for them, allowing them to focus on what they do best, scaling their business and streamlining their operations.
Payment flexibility and inclusivity are also major advantages offered by Embedded Finance, giving users the option to choose from various payment methods, including traditional bank transfers and digital wallets, accommodating a wide range of preferences and needs.
Digital wallets, in particular, are beneficial for online platforms with large customer bases that involve transactions between merchants and buyers. Because digital wallets facilitate instant payments, merchants can execute orders right away, leading to quicker order fulfilment. Buyers, in turn, gain peace of mind knowing their order is on the way sooner than expected. This efficiency boosts satisfaction for both merchants and buyers, fostering increased loyalty to the platform.
Embedded Finance also opens up opportunities for hyper-personalised offerings. Platforms can leverage data analytics to offer highly tailored financial products and services, such as customised loan options and exclusive discounts.
Embedded Finance can improve user engagement and overall experience across a wide range of industries. A good example is one of the most recent cases we worked on with BeMyBond, a bond crowdfunding platform that aims to make bond investing accessible and straightforward.
Their main challenge was ensuring smooth and compliant payment flows between investors and the issuer while providing a unified transaction experience for users. By integrating our solution with built-in compliance and a single set of detailed APIs, the platform simplified the customer onboarding process to 8 seconds, eliminating any unnecessary steps. As a result, 406 new customers were onboarded during the first couple of days of platform launch, each receiving IBAN accounts. Additionally, the company can now offer tailored solutions directly to end customers.
Another practical example could be our integration with Softloans, an embedded lending solution that businesses can integrate into their own platforms to offer revenue-based loans to their merchants. To allow their lending solution to be easily embedded into other businesses’ platforms, Softloans leveraged Embedded Finance to facilitate seamless access to merchant accounts, balance notifications, and streamlined payment processes. To add, because our EF solutions have built-in compliance, the company can reduce the risk of bad debts and improve operational efficiency, too.
Besides our cases, more examples can be found in non-financial industries as well. In the sports sector, for instance, digital wallets, like the one offered by the Minnesota Gophers, are improving fan experiences by offering convenient platforms for receiving team news, tracking stats and scores, and purchasing tickets and merchandise. The ‘F1 Paddock Club’ digital wallet takes this innovation a step further, allowing fans to collect points for their interactions and redeem them for merchandise and VIP experiences.
The food and beverage industry has used Embedded Finance to offer hyper-personalised loyalty programs. Starbucks, for example, has integrated a digital wallet into its mobile app, offering features like easy payments, balance reloads, and a rewards programme, all accessible in an easy-to-use interface.
Embedded Finance is also a major component of the gig economy. Airbnb, for example, has streamlined its financial interactions with hosts by incorporating a direct payout system into its platform. This allows hosts to receive earnings either directly into their bank accounts or through a chosen payout method.
A well-designed solution prioritises ease of use. This means creating user interfaces that are intuitive, clear, and seamless. Reducing friction at every step – minimising the number of clicks necessary to complete a transaction – means greater user satisfaction and higher customer retention.
Another key element is adaptability. This is particularly crucial for ensuring compliance with ever-evolving regulatory standards. For instance, under the EU’s PSD2 regulation, Strong Customer Authentication (SCA) is required for many types of online transactions. This means that Embedded Finance applications must use multi-factor authentication (MFA) methods rather than simple password-based authentication. Designing with flexibility in mind ensures that Embedded Finance solutions can adapt quickly, to avoid noncompliance, service disruption, or added UX friction.
As Embedded Finance continues to evolve, we expect financial services to be incorporated seamlessly into more non-financial environments, making transactions more streamlined and user-friendly. This development brings significant value to consumers by making financial services accessible where and when they are needed, with simplified processes and personalised offerings.
Digital wallets, for example, will be at the heart of new and innovative modes of customer engagement and relationship management. Hyper-personalised loyalty programs and custom-tailored perks will not only boost customer satisfaction and retention but also provide valuable data on consumer preferences. Such insights can facilitate highly targeted marketing strategies for increasing engagement, improving transaction rates, and, ultimately, boosting revenues.
One integral part of Embedded Finance is embedded compliance. Its tools will also facilitate adherence to financial regulations, offering advantages such as real-time monitoring, advanced verification mechanisms, and thorough risk assessment. These enhancements will streamline Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, making regulatory compliance more manageable and ensuring conformity with evolving standards.
In the future, Embedded Finance will also likely expand into the Internet of Things (IoT), introducing machine-initiated transactions. For example, a smart refrigerator could automatically reorder groceries when supplies run low, creating transactions without human intervention. AI-facilitated negotiations are another possible horizon for Embedded Finance, where buying and selling could be conducted by digital assistants guided by pre-set criteria, intelligent algorithms, and insights derived from personalised data.
This editorial piece was first published in The Paypers' Embedded Finance and Banking-as-a-Service Report 2024, which is the latest comprehensive market overview and analysis focusing on the key players and products within the Embedded Finance and BaaS ecosystem.
About Marius Galdikas
Marius Galdikas is the CEO of ConnectPay. With over two decades of experience in digital product development and business growth, Galdikas specializes in leading the creation of advanced financial platforms, driving the vision of ConnectPay to be a major B2B fintech innovator in the EU. His leadership focuses on fostering strategic growth and technological excellence within the industry.
ConnectPay is an all-in-one financial platform for online businesses, offering embedded financial solutions with built-in compliance. Its modules include SEPA and SWIFT payments, multi-currency IBAN accounts, wallets, Banking-as-a-Service, and merchant services. All processes operate via a fraud prevention and compliance management ecosystem, with KYC verification and AML/CTF monitoring. ConnectPay holds an EMI license from the Bank of Lithuania, and is a member of the Eurozone monetary authority.
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