WHAT’S DRIVING SMB DEMAND FOR EMBEDDED FINANCE IN 2023?

What’s Driving SMB Demand for Embedded Finance in 2023?

Guide

January 27, 2023

Small and midsize businesses turn to embedded finance to solve pain points. Here are 3 of the top key challenges SMBs are facing in 2023 and the opportunity.
Follow Galileo
Follow Galileo LatAm

Download the latest Embedded Finance Tracker®, a Galileo and PYMNTS collaboration. 

Small and midsize businesses (SMBs) face significant challenges when it comes to making payments, which often can be a high-friction, time-consuming and error-prone process. To solve these payment challenges, SMBs increasingly are looking to embedded finance solutions–and this growing demand is giving rise to what many see as one of the biggest opportunities in the payments industry. 

Solving SMB Payment Pain Points

Recent survey data reveal the key payments challenges SMB are facing, including:

  • High costs 

  • Time-consuming processes

  • Lack of financing options

Embedded finance tools offer the potential to significantly mitigate these pain points for SMBs by integrating payments into the non-financial systems SMB use to run their business, thereby streamlining the payment process, reducing costs and opening up new financing opportunities. 

“Small business owners are desperate for ways to drive more efficiency in order to realize critical financial savings and have more precious time to devote to actually running their company,” noted Scott Johnson, senior vice president of business development for Galileo Financial Technologies. “Now the technology is there to do that by embedding payments into the other non-financial systems SMBs use every day to manage aspects of their company."

The Market Potential of SMB Embedded Finance 

The potential business benefits of B2B embedded finance solutions aren’t being lost on the SMB sector, where interest in - and demand for - such solutions is growing quickly. 

A recent study found that 60% of SMBs said they desire embedded financial services to help them smooth their payments processes, while 50% believed embedded solutions would offer enhanced payment data that could drive actionable insights into their operations. 

What’s more, another recent study found that 52% of SMBs with between 50 and 249 employees were interested in banking through a non-financial services provider–and 57% were willing to pay a premium for the convenience of such an arrangement:

What’s-Driving-SMB-Demand-for-Embedded-Finance Galileo- (1)
What’s-Driving-SMB-Demand-for-Embedded-Finance Galileo- (1)

This increasing appetite for new embedded solutions represents a major opportunity for payments and financial service providers serving the segment.

Overall, the level of pent-up demand for these embedded finance tools in the B2B sector represents one of the highest growth potential opportunities in the financial services industry today...
Scott Johnson
VP of Business Development
Want to Learn More?

For more insights on the growing SMB demand for embedded finance solutions, download the latest Embedded Finance Tracker®, a Galileo and PYMNTS collaboration. 

Enjoy our Insights?

Recent Posts

Platform
September 29, 2023

Start Your Bank’s Tech Modernization Journey With This API

Discover how Galileo's API-driven approach can help banks modernize incrementally, enhance user experiences, and stay competitive in the digital era.

See More
Guide
August 28, 2023

BIN Sponsorship: What Fintechs Should Know When Choosing or Changing Sponsor Banks

Choosing a sponsor bank, or knowing if you need to change banks, is one of the many nuances fintechs must understand when navigating a payments program.

See More
Platform
August 16, 2023

How SMBs are Leveraging Technology for Better Liquidity Management

Amid economic challenges, SMBs seek tech for liquidity management, offering a significant market opportunity for solution providers.

See More
Platform
May 19, 2023

3 Ways Conversational AI Optimizes Banking Customer Journeys

Next-gen chatbots & intelligent assistants enable banks to transform automated customer service from frustrating to engaging, driving user satisfaction & happiness.

See More
Guide
March 15, 2023

How Any Brand Can Capture the BaaS Opportunity in 2023

Banking as a Service allows brands to create new revenue streams, improve CX, embed financial services, and enhance the customer value proposition.

See More