How embedded finance is helping brands reimagine the point of payment

People’s favourite brands are the ones that they create experiences with, such as the football team they have a season ticket with, or their favourite band that they see live every time they tour. However, despite these potent brands winning people’s hearts and minds, their day-to-day purchases and interactions are still the preserve of brands that most likely inspire indifference. After all, you never hear people discuss their main bank, café or petrol station with the same zeal as the brands they created memories with.    

Embedded finance could change this, however. The importance of finance products, and frequency of their use, is an opportunity for people’s favourite brands to turn intermittent interaction to constant connection. Take the McLaren Racing team; they launched their own branded debit card experience, with loyalty rewards like exclusive access to the pit lane at the Grand Prix. What was once a brand that a customer would interact with intermittently can leverage embedded finance experiences to become a meaningful part of customers’ day-to-day lives. For brands with die-hard fans yet infrequent interaction, ranging from sports stadiums to live music venues, customers’ daily purchases are a unique opportunity to create a more constant relationship and make peoples’ favourite moments a ubiquitous part of their lives.

The embedded finance opportunity also exists for day-to-day brands who are realising the true value of such frequent customer touchpoints. Tesco Clubcard Pay+ is a great example. The debit card enables users to get membership points for every transaction they make (even outside of Tesco) which, combined with in-store membership discounts, offers more meaningful incentives and a greater loyalty experience than simple cashback ever could. Not to mention that customers experience the brand supporting them every time they pay for something.

A brand new dynamic… will redefining customer relationships precipitate new business models? 

The question that remains is whether deepening customer relationships are simply a tool to grow existing revenue streams, or whether it can bring about entirely new opportunities? Services such as Tesco Clubcard Pay+ have already demonstrated how to leverage daily customer touch-points to cultivate customer loyalty in pursuit of their own bottom line, but what is the value in allowing other brands to tap into this relationship? The retailer’s numerous loyalty partners triple the value of clubcard points when customers spend with them on experiences such as holidays, eating out and subscription services. 

Though allowing other brands to tap into your customer loyalty may sound ludicrous, brands are beginning to understand that there is value in becoming more to customers than many businesses would otherwise be able to be. Brands that offer memorable experiences such as holidays understand the value in becoming a more regular part of customers’ experiences, and brands like supermarkets that act as a daily point of purchase see the value in playing a part in their customers’ more meaningful experiences.

Paying with purpose… helping brands make a positive impact on their customers and society 

Embedded finance can not only create new sources of revenue, but brands can also leverage the point of payment to become a positive force for their customers. Fitness rewards platform, Paceline, launched a credit card that offers incentives and cashback if cardholders meet their fitness goals. It also offers greater cashback for health and fitness brands that want to play a part in their customers’ fitness journey. 

In addition to supporting customers in their own personal goals, the point of payment can align with customer values as well. For example, social impact payment platform HELPFUL launched a digital branded wallet that reduced CO2 emissions from payments by as much as 80%. Although embedded finance can be leveraged to cross-sell and drive revenue growth, brands which communicate shared values with their customers have the potential to form strong relationships that pay steady dividends as time goes on. 

Time for switched-on brands to respond

Whether brands are a point of day-to-day customer interaction, an infrequent but special experience, or a source of personal growth for customers, all of these purchase touchpoints have their own value. Brands are able to come together as mutually beneficial ecosystems and collectively maximise the value of all their different touchpoints. This doesn’t only have the potential to grow the bottom line, it has the potential to redefine customers’ relationships with brands.