Imagine you want to buy a limited edition headphones, but they’re a bit expensive. For a moment, you change your mind but then a message pops up. It says you don’t have to pay for everything right now. You can get those headphones on EMI without even having to pay any interest for 3 months. In fact, it’s all possible in a minute. Too good to be true, isn’t it? Well, it’d be difficult to imagine something like this three years ago. But today, it’s not! Buying your favorite things on credit is a piece of cake, thanks to Buy Now, Pay Later. If you use any of e-commerce, grocery or food delivery apps, you must’ve noticed the frequency at which these apps nudge you to opt for a pay later option. But, Buy Now, Pay Later is just one piece of the puzzle. The significant advancement in Fintech – new technologies that automates financial services – have simplified finance for everyone. One of the most notable and disruptive examples of digitization in the fintech sector is Embedded Finance.
Embedded finance has allowed every traditional business to leverage advanced financial integration and take financial services on a whole new level. With Embedded Finance, any non-banking financial company, like an e-commerce store, can seamlessly offer ease of payments like EMI without interest to improve consumer experience. In the US, for instance, Google Maps allows its users to find and book parking spots through its app. The most recent example of Embedded Finance is Youtube’s pilot feature that allows users to shop for products while watching any live stream. The list goes on.
The size of the pie
The era of Embedded Finance is rapidly tightening its grasp over the fintech industry, presenting an estimated $7 trillion market opportunity globally by 2030 – which is almost twice the combined value of the world’s 30 biggest banks right now. According to Juniper Research, the market value of Embedded Finance will exceed $138 billion in 2026 from just $43 billion in 2021.
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