Beyond the hype: what is banking-as-service (BaaS) and embedded finance in retail?; Getting started with Payment Orchestration; European neobanks are back;
Hi Fintech Fans, our agenda for this edition of Fintech Wrap Up below:
Insights & Reports:
1️⃣ Beyond the hype: what is banking-as-service (BaaS) and embedded finance in retail?
2️⃣ Why B2B Commerce is the $100 Trillion Market Technology Hasn’t been Able to Crack
3️⃣ Getting Started with Payment Orchestration
4️⃣ European neobanks are back
5️⃣ Pursuing a profitable business model for digital wallets — two potential routes to success
Curated News:
1️⃣ Apple Faces Legal Protest From Meta, Microsoft, X, Spotify and Match
TL;DR:
Insights & Reports Analysis:
- Banking-as-a-Service (BaaS) & Embedded Finance: BaaS and embedded finance are revolutionizing retail by offering seamless banking solutions integrated into the customer journey through APIs. This approach, known as B2B2C, is transforming how financial services are delivered and personalized.
- B2B Commerce Challenges: Despite the vast potential, B2B ecommerce adoption remains low globally, presenting complex procurement and transaction workflows. Adapting to omnichannel dynamics is crucial for future success in B2B trade.
- Payment Orchestration: Payment orchestration consolidates payment processing components, optimizing transactions and offering flexibility. Choosing between as-a-service and in-house solutions depends on business strategy and requirements.
- European Neobanks: High interest rates have spurred revenue growth for neobanks like Monzo, Starling Bank, and N26. Geographic expansion and regulatory adaptation are key strategies for future growth.
- Digital Wallet Business Models: Digital wallets can pursue profitability by specializing in niche payments or evolving into full-scale digital banks. Success depends on addressing customer needs and regulatory compliance.
- Open Banking APIs Worldwide: The global banking market is opening up, with regulations and market standards advancing across various regions, particularly in the EU, UK, and Australia.
News Highlights:
- Chime Plans US Listing in 2025: Fintech firm Chime, known for fee-free services, aims for a public listing in the US next year.
- Nationwide Faces Payment Delays: A “fault” on Friday morning caused payment delays between Nationwide and other banks and building societies.
- Apple Faces Legal Protests: Meta, Microsoft, X, Spotify, and Match Group protest Apple’s app store policies following a federal court ruling on alternative payment methods.
Insights & Reports
Beyond the hype: what is banking-as-service (BaaS) and embedded finance in retail?
BaaS suppliers provision banking services to retail clients typically through an API based platform, for onward distribution to customers. This is known as a B2B2C business model. When financial products and services are directly integrated by retailers into the customer journey, it is referred to as ‘embedded finance’.
BaaS providers are typically:
🔸 A fintech or neo-bank either:
- partnering with an agency bank that provides key enablers such as a banking licence, underwriting, BIN sponsorship, operations as well as strategic partners for other key products or capabilities like payments; or
- operating independently with its own banking licence and underwriting, but typically still working with strategic partners for key products or capabilities such as operations.
🔸 A traditional bank with specialised fintech units and core enablers in-house, but also partnering with strategic partners for best-in-class capabilities such as open banking.
Market leaders typically deploy modular, API-enabled platforms that provide a menu of products and capabilities for retailers to choose from, and easy integration for onward distribution to customers. Embedded finance may be bundled with personalisation capabilities in sales and marketing to seamlessly place relevant products and offers (e.g., credit card, personal loans) at the right point in the customer journey.
Why B2B Commerce is the $100 Trillion Market Technology Hasn’t been Able to Crack
If you’ve ever tried to procure a product or service for your business or one you work for, the right side of this image is likely a familiar sight — and not a welcome one. A business transaction isn’t just clicking a button — it’s a complex, hairy, and manual workflow with many decision makers. Procurement, pricing, payment, and fulfillment are highly bespoke. It’s no wonder, then, that when we look at the data, we find that B2B ecommerce adoption is so low — only 5.5% globally — compared to B2C at nearly 18%.
But the upshot is made clear by the towering bar on the right — the B2B market is 5x the size of B2C and description has started.
❓ Why now?
However clumsy the word, omnichannel is the key to an elegant future
When we throw around terms like “digital,” and “online,” it can be easy to get them mixed up. Just because an interaction is online doesn’t mean humans are out of the loop. We know for certain that the future of B2B trade isn’t going to consist of business buyers doing all their purchasing via self-serve ecommerce sites. Just as consumer retail is not 100% online or 100% in-person, but a dynamic mix.
The last three years — from a dramatic swing towards self-serve ecommerce channels back to a hybrid in-person world — have shown that we don’t know what’s coming. This is precisely why business trade needs digital and adaptable underpinnings to tie together interactions, whatever form they take: this is what it truly means to be omnichannel.
Curated News
Chime Targets Public Listing in US in 2025
Chime, a fintech firm taking aim at the bigger banks by offering fee-free services, is planning to list the company in the US next year, according to a person familiar with the matter.
