Insights & Reports Analysis:

Hey fintech fans, let’s dive into the latest buzz on fintech adoption in vertical software and beyond but before that I want to mention that I am speaking at London Tech Week 2024 here is why you should join me.

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So, here’s the scoop on fintech adoption in vertical software: everyone’s jumping on the bandwagon, preferring those all-in-one suites that come with embedded financial goodies. Think about it: payments are like the gateway drug for fintech strategies. But it’s not just about swiping cards; we’re talking about lending, insurance, investing, and even banking sneaking into your software suite. Each vertical has its own flavor though. For example, while everyone’s cool with payments, not everyone’s sold on embedded payroll just yet. It’s like trying to find the perfect fit for each niche.

And speaking of niches, crypto banking is booming, especially in places like the US, UK, and all across Europe, where everyone’s scrambling to offer crypto banking services. Meanwhile, in Europe, the mobile payments scene is like a battlefield, with global giants, local heroes, and regional contenders duking it out for dominance.

And hey, even though fintech funding took a little dip recently, there’s still plenty of action and investment swirling around. So, keep your eyes peeled; there’s bound to be more excitement ahead!

News Highlights:

Now let me break down some recent moves in the fintech world for you. First up, Stripe’s back in the crypto game after a 6-year break! They’re starting slow with USDC stablecoin payments on platforms like Solana, Ethereum, and Polygon. It’s a cautious step, especially after dropping Bitcoin back in 2018 due to its volatility.

Next, Monzo’s making big moves with a massive £500 million fundraising round, teaming up with a top-tier tech investor. They’re really flexing their muscles in the consumer banking scene.

And speaking of Stripe, they’re shaking things up by uncoupling payments from their core offerings, doubling down on embedded finance. With a valuation of $65 billion and a jaw-dropping $1 trillion in payment volume last year, Stripe’s not slowing down anytime soon, even with competitors nipping at their heels. It’s a fast-paced world out there, but these fintech giants are keeping us on our toes!

Insights & Reports

A data-driven look at fintech adoption in vertical software

Businesses of all sizes rely heavily on software increasingly built for a specific vertical. Within verticals, businesses increasingly prefer the convenience of integrated, all-in-one suites over multiple disconnected vendors. These software suites have started embedding financial products to provide more value.

The right level of resolution for takeaways is not in the specific numbers (e.g., 20% lending adoption in hospitality versus 29% in restaurants and retail) but in the major differences between products and verticals.

Payments is the beachhead of vertical software’s fintech strategy.

Every business needs payments. Handling payments also give the software vendor access to critical data and downstream workflows, including the ability to fund banking, card, and payroll products, underwrite lending products.

Non-payments adoption is still in its infancy. Nearly every company explored uses nearly every financial product described here, although most do so directly rather than through the software vendor — for now.

For example, none of the verticals had >50% adoption of embedded payroll, although ~100% of the companies use some payroll solution. This is more a question of time and right to win/embed than anything else. More on this below.

Insight continues…

What are some examples of embedded finance?

1. Embedded payments

‍15 years ago, online payments were almost unheard of. Today, the idea of enabling customers to make purchases on your website or mobile app is so commonplace that it’s practically its own category. Common online payments providers include Checkout com, Adyen, Finix, and Stripe.‍

2. Branded payment cards

‍American Airlines pioneered the branded payment card back in 1934. Since then, thousands of companies have recognized the value in providing branded cards (including virtual cards) to engaged customers and followed suit.

3. Embedded lending and financing

‍Perhaps the most recognizable form of embedded lending and financing is buy-now-pay-later (BNPL). In addition to Affirm, checkout options like Klarna enable customers to spread a purchase across several monthly or biweekly payments. But there are many other flavors, including cash advances (DoorDash), invoice factoring (Outgo), credit and charge cards (Ramp), term loans (Toast), and revolving lines of credit (Amazon).

Insight continues…

Curated News

After 6-year hiatus, Stripe to start taking crypto payments, starting with USDC stablecoin

Stripe, the fintech giant, continues to inch its way back into the cryptocurrency market. On Thursday the company announced that it would let customers accept cryptocurrency payments, starting with just one currency in particular, USDC stablecoins, initially only on Solana, Ethereum and Polygon. This will be the first time that Stripe has taken crypto payments since 2018, when it dropped support for Bitcoin due to it being too unstable.

News Continue…

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Sam Boboev

I am a fintech enthusiast and product leader passionate about crafting simple solutions for complex problems. Subscribe