financialtreat – will explain about embedded finance: Integrated Financial Services Simplify E-Commerce which you will get in the following article. let’s look at this article carefully!
The electronic commerce (E-Commerce) sector has emerged vitally since the Covid-19 pandemic hit the world, when consumers turned to online shopping to fulfill their needs and desires. For this reason, using embedded finance will be easier in trading.
Although e-commerce and digital services have not been the most accessible in previous years, the Philippines has recently adapted and caught up with its Southeast Asian counterparts in terms of using digital channels within the retail industry and using embedded finance services.
Integrated Financial Services Simplify E-Commerce
A study by e-commerce company iprice Group, in collaboration with app analytics system App Annie and web site analytics service Similarweb, revealed that the Philippines experienced the highest increase in shopping app usage (53Percent) in Southeast Asia since Q2. At the same time, the country has also seen an increase in spending (57 Percent), compared to neighboring countries, since the pandemic hit.
The upward trend seen in these activities poses challenges for the retail industry, including the need to change traditional retail tactics and to cope with changing consumer conduits. This is what integrated financial services want to address.
Simplify transactions through embedded finance
Integrated finance aims to improve the customer experience through seamless integration of banking, payments or credit in a transaction. This is when recent years have looked at customer preferences in terms of comfort and convenience in their shopping experience.
According to Vishwas Mysore, Senior Director of Credolab, for global presales and consulting on solutions, improved customer experience only follows as a consequence of implementing such integrated finance, as simplification of transaction processes is at the core.
“It’s as simple and intuitive as advertising on social media and within the search ads then, and retail embedded in social media today,” added Mysore. A report by private equity firm Lightyear Capital states that integrated financial markets are expected to increase tenfold from $22.5 billion in 2020 to $230 billion in 2025.
This type is usually seen in online marketplaces like Lazada and Shopee, especially on checkout pages. Mysore said that payment cards are available via Shopeepay or through the option of using a credit or debit card. At that time, the Gcash mobile wallet application was also available on Lazada, along with Buy Now Pay Later (Bnpl) options such as Cashalo and Billease. For merchants, there’s Shopify, an integrated banking that provides sellers an easy revenue management on their own system.
Mysore also noted that although integrated finance appears to be an accelerating measure in the Philippine retail market, there are still gaps that need to be addressed, among them the case of shopping cart abandonment for e-commerce merchants.
A report by market data firm Statista found that, 88 Percent of shoppers worldwide leave their shopping carts on retail systems. The reason they need more time to contemplate a purchase, change their mind about the purchase, to not have a preferre payment method.
Mysore mentions that alternative payment options, as well as lines of credit such as BNPL purchases or purchases in equalize Monthly Installment (Emi), have significantly reduce cart abandonment. However, he shows that implementation is the key to solving the case.
“Security cases, development costs, down-time and other cases make businesses hesitant to study stronger payment options. And underwriting credit is an unknown risk to retailers and not lenders. Integrated credit needs evaluation that is also integrate and this is where our partnership with fintech companies like Credolab will be an integral part of implementing these integrate financial solutions.
Making credit more accessible
Credolab’s integrate evaluation solution takes a new approach to risk. As it leverages smartphone metadata to provide additional in-depth risk information in a highly predictive. And assistive approach to personal data. “Through our machine learning algorithms. We turn a non-personal digital footprint into a strong credit score that can identify customers. With willingness and ability to pay.”
He adde that by adding integrate evaluations for digital banks. Digital fintech lenders, P2p systems, market aggregators, Bnpl, and e-wallets. Credolab is modernizing its approach to lending as they make risk evaluations more thorough. Robust and conducive. “Through collaboration with these industries. It is more possible for many Filipinos to open up credit for consumption, lifestyle or business.
Uprooting traditional retail tactics
Integrate finance benefits customers and e-commerce businesses in terms of convenience. For customers, the ease of payment is one of its biggest advantages because “Creating a frictionless checkout experience, it allows customers to pay by whatever method they prefer.
“The BNPL option also encourages more responsible spending that allows customers to manage and meet their monthly budgets. On the other hand, integrate finance can help e-commerce businesses by reducing their customer turnover at checkout through streamlining the customer experience.
“With far fewer cart abandonments and a better customer experience, businesses can benefit from higher conversion rates, revenue and customer loyalty in the long term. Integrate finance can also help small business owners easily manage their revenue and minimize the cost of acquiring customers.
As the Philippines has had the biggest increase in online shopping since the pandemic. The first ways of shopping online have increase. Integrate finance has made online shopping more accessible. To Filipinos with little or no credit history as it streamlines the process. And allows multiple payment methods.
Businesses are now being force to adopt a framework like banking. And financial services where in the Philippines is shifting online. And this is changing the way consumers pay for or apply for credit. “Store credit was replaced by credit cards. And BNPL on the consumer side and P2p and aggregator lending systems. And also the market on the business side.
As consumers check out and crave for a more convenient. And personalize shopping experience today, providing them with multiple integrate payments can speed up. The total process as it allows them to skip dealing with third party vendors for transactions.
Consumers today are also more likely to spend their money more responsibly. Given that many have been impacte especially financially by the pandemic. Having a BNPL option can take the ‘pain’ of making big purchases by spreading them out into smaller sections.
He also mentione that e-commerce businesses could also work. With embedde financial solution providers like Credolab to offer profitable payment options with controlle risks.
Credolab specializes in alternative credit evaluation, which can access doors for Filipinos with little or no credit history. This will allow businesses to not only reach a broader set of consumers. But also focus on their core business tactics when credit risk is controlle through integrate credit evaluation.
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Integrated finance that is still a ‘Baby’
Although the trend is developing in the use of integrated finance, it is still in an era of development. E-commerce businesses should convince more Filipinos to opt for. This solution over cash, as the Philippines has the lowest banking penetration in Southeast Asia.
A survey conducted by Bangko Sentral ng Pilipinas found that approximately 51.2 million Filipinos do not have a bank account.
More Filipinos have accessed bank accounts since the pandemic hit to receive government cash protection. Naturally, if more Filipinos use their smartphones to connect their bank accounts. For shopping or other payments, fintech and integrated finance will grow exponentially. In the near to medium term.
However, integrated finance will also be present in other sectors such as banking, investment. And insurance. Mysore also believes that the Philippines will adopt this framework on. Abroader scale in the years to come, especially as it continues to push for cashless people.
By working with our own financial service providers and e-commerce systems. We hope to help increase financial independence. And empowerment through our alternative credit evaluation solutions.
Thus the review of this article which discusses embedded finance may be useful and thank you.