Just as Google Maps transformed the logistics industry, seamless mobile-based payments have revolutionized the way fintech firms and non-banking businesses engage customers.
While Banking-as-a-service (BaaS) stemmed from the need for dedicated payment applications, it has made inroads into the mobile apps of non-banking vendors in the form of embedded finance. The primary goal is to facilitate an uninterrupted customer experience, allowing people to shop and pay for their purchases on the same platforms. This is one of the main factors propelling the embedded finance sector, which is expected to reach $121.5 billion, expanding at a CAGR of 21.4% from 2022 to 2029.
The Evolution of BaaS
Ecommerce platforms were the early adopters of BaaS and have benefitted tremendously from this. With its widespread adoption, BaaS has become increasingly powerful, allowing online retailers to offer more payment and financing options to customers without ever having to leave their mobile app.
How is BaaS Helping Retailers?
In Europe, 92% of businesses are planning to embed banking, 83% to embed payments, 28% insurance, and 23% lending in their non-financial business applications by 2025. This is because BaaS has unlocked many opportunities for retailers by creating new revenue streams and simplifying the customer journey: