6 areas of innovation that are crying out for embedded finance

Wherever money flows through digital platforms, embedded finance can be the game-changer. Once plugged in, embedded finance can speed up payments, automate processes and streamline the user experience. It’s a powerful cost saver and revenue generator. The only limit is the imagination of the innovator building the solution.

From managing employee expenses and supplier payments to making property and freelancer marketplaces more convenient to use, there are plenty of sectors crying out for answers to longstanding and complex pain points. For founders building digital products to meet that demand, embedded finance will be a key part of the solution.

1. Accounting and expense management

There are plenty of SaaS tools out there for expense management, but making the payments at the end of a process still typically means going outside of the software and logging in to a bank. And when employee expenses aren’t so much a single invoice as frequent collections of receipts for ad hoc purchases, managing those reimbursements is a time-draining chore.

What if the expense management platform could not only make it easier for people to file an expense claim but also make the resulting payment automatically once approved? Or imagine if the package gave companies the power to issue cards to employees to make pre-approved purchases for training, travel or research, all nicely connected up for ease of reconciliation.

With an embedded finance solution like our Employee Finance Plug-in, these payment capabilities can be easily embedded into an expense-management platform or any similar solution. Businesses can also issue physical or virtual cards to make “as and when” expenses more convenient for employees, as well as locking funds to specific merchants or services to prevent misuse.

2. The gig economy

The heart of the gig economy is freedom. Freelancers choose that lifestyle because they want the freedom to do what they love and when they want to do it. In theory that freedom should extend to deciding how, when and in what currency they get paid, but building in that flexibility from scratch is often beyond the means for freelancer marketplaces.

And it’s not just about freelancers getting paid. Finance management is a steep learning curve when you’re new to the gig economy, with plenty of pitfalls like taking international payments and declaring income correctly.

Our Worker Finance Plug-in has been designed to overcome these challenges. With an easy way to implement card modes, bank accounts and currency controls, marketplaces can give freelancers the tools they need to set themselves up safely and earn a secure income.

MONET, for instance, set up a platform which fills the gap between work completed and work paid for, advancing earnings to creators so the status-quo stress of chasing invoices is taken off their shoulders. But of course, all this happens in an invisible, frictionless, automated way behind the scenes, using the Weavr Worker Finance Plug-in.

What if you used embedded finance to give them the power to get paid how they want, when they want – and even manage payments to subcontractors? You’d be giving freelancers back their freedom and helping fulfil the promise of the gig economy.

3. Logistics

Finance plays a huge role in keeping international supply chains going. From managing shipping insurance and cross-border payments to keeping track of all that money, it’s a complex sequence that easily gets bogged down by all the manual steps along the way.

There are plenty of software tools out there for warehouse, order and freight management, but finance needs to be plugged into that to make logistics truly efficient. By moving away from monthly invoices and towards automated payment flows and reconciliation, embedded finance can power faster, cheaper and smoother international payments.

For rapidly scaling companies, this can result in a serious cost saving. With cash flowing faster and automated processes, the business won’t need to expand their back-office team at the same rate as their operations. Also, when the company expands into a new region, many of the same automated processes can be carried directly over, or recalibrated, without needing to dramatically reorganise the business.

Embedded finance can also add flexibility. With connected payment flows, it makes purchases easier to insure and lend against. What if companies could see how long it takes for an asset to become cash and make strategic decisions on this basis? They could even offer automated payment discounts if an invoice is paid in quick time.

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