Embedded finance is the force multiplier for PayFacs and software platforms
Payment facilitators (PayFacs) are transforming how and where we conduct commerce. Entities such as independent software vendors (ISVs) and online marketplaces offer services and products, but they need additional help to be able to receive payments. PayFacs can provide that help.
New embedded finance solutions enable the direct integration of banking and credit products into retail platforms. This integration presents the opportunity for new revenue streams. PYMNTS Intelligence’s data shows that ISVs and marketplaces offering two core types of features — payment acceptance and embedded finance features — are the most likely to report payment processing fees make up a greater share of the revenue they generate. ISVs and marketplaces — like PayFacs — increasingly recognize the value of offering both payment acceptance and embedded finance features. Top features on their innovation plans include buy now, pay later (BNPL) and loyalty and rewards programs. PYMNTS Intelligence finds differences in emphasis among the innovation plans of PayFacs, ISVs and marketplaces.
Report highlights
41%: Portion of PayFacs that expect new embedded finance offerings to increase their revenue
73%: Share of ISVs that expect to expand or start offering embedded finance capabilities in the next two to five years
74%: Share of marketplaces that find embedded finance features highly important to their innovation strategies
These are some of the key findings explored in this edition of the “Business Platform Survey: Why Embedded Finance is the Next Big Bet,” a PYMNTS Intelligence and Carat from Fiserv collaboration. This report explores the characteristics, sentiments and behaviors of PayFacs, marketplaces and ISVs regarding payment acceptance and embedded finance. We surveyed 280 executives — 40 at PayFacs, 120 at marketplaces and 120 at ISVs — between May 28 and July 30, 2024, to determine how they facilitate payment and embedded lending processes for their customers.
Inside the study
- Insight into the benefits of offering both payment acceptance and embedded finance
- Changes in firms’ payment offerings in the last year
- How expanding these offerings can increase revenue and market expansion for PayFacs, ISVs and marketplaces
- How PayFacs can support ISVs and marketplaces meet regulatory requirements, reduce security risks and alleviate operational constraints in payment processing
- What embedded finance features PayFacs, ISVs and marketplaces show interest in innovating and enhancing
- Innovation timelines for PayFacs, ISVs and marketplaces
Download the report here: Platform Business Survey: Why Embedded Finance Is the Next Big Bet.
