Embedded Finance is a big trendy umbrella term for all embedded finance. Please see also our other embedded finance related content for the more specific information for your use cases.
Here is also a more thorough explanation in case we missed something important above.
Embedded lending is a subcategory of embedded finance. It refers to the integration of lending services within a non-financial platform or application. This can include online marketplaces, e-commerce websites, or even mobile apps. By offering lending services directly within the platform, users are able to easily access loans and credits without having to leave the application. This can streamline the lending process and provide a convenient way for individuals and businesses to obtain financing.
Embedded finance is often facilitated by embeddable application processes or application programming interfaces (APIs). The biggest advantage of the embedded lending is that the customer can fill the application process
For example, an e-commerce platform could offer a payment service that is integrated with a customer's bank account or credit card, allowing them to complete transactions without leaving the platform. Another example is a budgeting app that allows users to connect their bank accounts and credit cards, giving them real-time insights into their spending habits and helping them manage their finances more effectively.
It has the potential to improve financial inclusion by making financial services more accessible and convenient for a wider range of customers.
Embedded finance and banking as a service (BaaS) are both terms used to describe the integration of financial services into non-financial platforms or applications. However, they differ in their focus and scope.Embedded finance typically refers to the integration of specific financial products or services, such as payments or lending, into the user experience of non-financial platforms or applications. The goal of embedded finance is to make financial services more seamless and convenient for users.Banking as a service, on the other hand, is a broader concept that refers to the provision of a full suite of banking services, including deposit accounts, card issuance, and lending, to third-party platforms or applications. BaaS enables non-banking companies, such as fintech startups or e-commerce platforms, to offer banking services to their customers without having to build their own banking infrastructure.In summary, while embedded finance focuses on the integration of specific financial products or services, BaaS provides a full suite of banking services to third-party platforms or applications.