Embedded Finance Keep Firms Agile in Emerging Verticals

Prioritizing adaptability, innovation and customer relationships will enable firms to navigate an unpredictable landscape, Thredd Chief Product Officer Ava Kelly writes in a new PYMNTS eBook, “Beyond the Horizon: How to Identify Unexpected Threats That Could Impact Your Business.”

In today’s volatile market, the only thing that is predictable is the unpredictable. The ability to adapt quickly to changing market conditions is paramount, particularly when “wild card” situations arise.

At Thredd, we’re well positioned to act with our modular platform and agile teams. We empower clients worldwide to launch new payments programs quickly, issue virtual cards and provision them to mobile wallets as well as add supplementary services such as real-time fraud monitoring.

This need for quick adaptability can occur at a more macro level for businesses but can also apply to cardholders’ everyday experiences. This became real for me while traveling out of the country this summer on holidays. Fraud was detected on my card and after validating the charge was not mine, I had to close my account and get a new card. Fortunately, a new card was delivered to my mobile wallet immediately and we didn’t miss a beat on our vacation.

Acceleration of Digital Payments

One major tailwind is the continued global shift toward digital commerce. Consumers are increasingly adopting digital payments, and businesses are moving away from checks. This trend is accelerating the demand for flexible, scalable payment solutions. For example, the online travel agency (OTA) sector has led the way in adoption of virtual cards to manage payments to a large, international supplier base.

The Role of Embedded Finance

Embedded finance is another area where we see tremendous potential. There are many potential wild card opportunities here, as I expect to see the industry move toward supporting non-financial brands that want to seamlessly incorporate payments into their everyday customer experience.

We’re seeing many verticals, from ridesharing to retail, embed innovative payment solutions into their offerings. For those new to the issuer side of payments, managing the requirements and multiple stakeholders involved in the process can be complex. Working with partners that can provide the necessary expertise and go-to-market execution capabilities will help brands   start generating new revenue streams faster while reducing operational overheads and providing greater control.

Global Market Expansion

Another significant tailwind is the increasingly global economy. Our clients are expanding their businesses worldwide, and Thredd is there to support them with our global market presence. We have recently opened operations in the U.S. market in response to client demand, and our APAC business is already well established and growing rapidly. Our continued expansion beyond Europe, APAC and North America will allow our clients the ability to operate seamlessly across borders via a single relationship, and leverage our on-the-ground expertise.

Regulatory Impact

Navigating regulatory complexity and changes will always be a wild card as legislators contemplate new laws that could potentially impact FinTechs as well as banks.

Organizations and their partners who excel in compliance management, and consistently invest in keeping their programs secure, build trust with their customers. While ecosystem participants may not be able to predict the outcomes, having the right processes and partners in place to uphold the highest levels of compliance will always be a good investment.

With the only given in our industry being ongoing change, I remain confident that businesses who prioritize adaptability, ongoing innovation and the importance of the relationship with their customers will be well-positioned to navigate the unpredictable landscape.