Embedded Finance: This trend line is very likely to continue into next year, with consumers increasingly familiar with the flexibility it offers. A growing number of online vendors are adding payment solutions to their offer, with Amazon perhaps the most notable.
“This creates an issue for legacy banking providers, as businesses and consumers alike vote with their feet to avoid paperwork and charges in favour of more convenient digital solutions.
“However, with enormous players like Amazon now offering their own one-stop solutions developed in-house, this also creates a challenge for providers like PayPal and Klarna as they miss out on these companies’ vast user bases.
“One way to meet this challenge is for payment solution providers to start providing their own marketplaces, or work in deeper collaboration with external partners.
“Alternatively, it’s feasible that we could see some industry consolidation – it’s very easy to imagine large brands buying out some of the smaller firms and integrating their solutions into their offer.
“Finally, it’s no secret that the economy is likely to face a tough 2023. However, embedded finance solutions are well-placed to weather this storm, as at a time of financial stress consumers are very likely to appreciate the flexibility and control they offer over their cash flows.”
