Relationship between different Embedded Finance stakeholders

Embedders are players or platforms that provide non- FS services and integrate financial products or services from providers into their own platform and their customer's transaction journeys.

These can be e-commerce platforms, mobile applications, social media networks, platforms for gig workers or any other firm that wants to offer FS to its customers without having to establish themselves as a full-fledged FI.

The APIs from FS providers are integrated by embedders to embed financial products and services into their existing customer journey. This makes the overall customer experience more seamless while also offering a composite value proposition.

For example, a retail e-commerce platform can integrate a BNPL service from a lending provider, allowing customers to finance their purchases directly through the e-commerce platform without leaving the website.

🔹 Providers

Providers are Fls, FinTech firms or other companies that provide financial products and services like banking, payments, lending, insurance or investing. The licences and regulatory permission required to provide these offerings are typically held by the providers. Providers in the EmFi space make their APIs available to facilitate integration with third-party platforms and applications.

For example, a bank might offer an API that allows a retail app to offer its customers the option to open a savings account directly within the app, or a payment service provider might offer an API that enables a ride- hailing app to process payments.

🔹 Enablers

Enablers refer to companies that have the necessary infrastructure and/or build applications which support the interaction between embedders and providers. They act as the connecting entity between the two for the exchange of data and information. Enablers provide the digital architecture for BaaS, embedding credit cards, payments and reconciliation, data security, data connectivity, verification, compliance and data insight generation. In simple terms, these firms provide APIs to the embedders, so that the companies can extend FS to the customers without having to develop all of them in-house. Therefore, these firms are required to maintain robust security measures and seamless operability

In certain cases, it is also possible for providers to directly take up the role of enablers. One such example could be a bank that offers netbanking APIs to embedders

🔹 Consumers

Consumers are the end users of the EmFi services. They are the customers of the embedders who interact with and use the integrated financial products and services within the platform or application. EmFi aims to improve convenience, accessibility and user experience for consumers by offering FS directly within the context of the services they are already using

Author

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