Friday, January 8th, 2021
Embedded finance, also referred to as embedded banking, is the merging of traditional financial services, like the processing of payments, with another service. It can include the integration of an existing financial service into a website or even a “non-financial app”. If a customer pays via a ride-sharing app, they are essentially using embedded banking. The entire transaction takes place via the customer’s phone. There is no exchange of cash or credit card information.
Digital wallets are another good example of using embedded banking. In order to utilize the digital wallet, a user must store their credit card information within the app itself. Although the credit and debit cards used were originally issued by a traditional bank, the user can use the app to buy at brick-and-mortar stores, purchase online, or within the app store. Customers can also send money directly to other users of this same app without needing to enter their credit card or bank account information each and every time.
Weavr Wants To Bring The Bank To Its Customers
London-based Weavr, an online platform that specializes in creating and integrating digital payment flows, has raised €3.3M in seed funding.
Weavr offers embedded banking tools that were specifically created to build, integrate, and run services using embedded banking without the need of holding “specialist knowledge” within the financial services.
It also offers a particular set of APIs that make it easy for service sector companies to integrate with banking products as well as produce accounts, transfer funds, or issue cards.
For this round of seed funding, the venture capital firms that are currently part of the fintech and digital industries include: QED Investors, Anthemis, and Seedcamp.
Yann Ranchere, who is a partner of Anthemis said,
“As financial services continue to become embedded in all online and offline experiences, providing a scalable platform to let any company add banking to their services via APIs is a massive opportunity. The Weavr team is building this infrastructure and we can’t be more excited to support them by leading their Seed round.”
Shortly after receiving this funding, Weavr made the announcement that it has just launched its very first suite of embedded banking tools that were specifically created to benefit the service sector.
Alex Mifsud, who is the co-founder, and CEO of Weavr added:
“The need for simple and accessible embedded banking products could not be more urgent. As the world starts to look beyond the Covid19 crisis and the possibilities stemming from lasting changes in consumer and business behaviour, embedded banking offers extraordinary potential for the future of work, the move away from cash, and the integration of financial services into all manner of digital businesses.”
Weavr notes that innovators working within the services sector are leading with a new trend. This trend includes the “embedding of financial services into their digital applications.” It also anticipates that more financial services will be embedded into the action of consuming and buying of other services.
Service industries like education, logistics, and employment have surged with digital transformation since the COVID-19 pandemic. The forecast for services sold and carried out using digital channels is expected to reach $2.1T (or €1761B) in 2020 worldwide.
Opportunities Abound For Embedded Banking
If the trends speak for themselves, they reveal a telling story. The data reveals that embedded banking is headed to become the future of both finance and banking. With the powerful advantages it offers, both traditional banks as well as fintech companies are seeking to adopt it.