Embedded finance, which goes beyond payments, is now a key growth driver for Software-as-a-Service (SaaS) platforms. It currently serves less than 20% of the market. This means that now is the time for platforms to tap into this revenue pool and accommodate the increase. SMB demand. SaaS platforms that incorporate financial products are set to increase revenue by up to 3-4x.
SAN FRANCISCO , Oct. 28, 2024 /PRNewswire/ — Adyen, the financial technology platform of choice for leading enterprises, today releases a new report in collaboration with Boston Consulting Group (BCG), announcing a $185 billion game-changer for SaaS. market opportunity has been identified. BCG analysis reveals that this market growth is being driven by a favorable interest rate environment due to increased revenue from bank accounts and an overall expansion of the bank revenue pool.
In parallel, demand for embedded finance from small and medium-sized businesses (SMBs), which are typically underserved by traditional financial institutions, is expanding far beyond payments. 1 This is coupled with the expansion of the market for SaaS platforms to incorporate more sophisticated financial products such as business accounts, loans, and issued cards into their services. Given the typical margins for these products, most platforms have the opportunity to increase their current revenue by up to 3-4x.
“Incorporating financial products creates a win-win scenario,” said Blake Breathitt, senior vice president of platforms and financial services at Adyen. By responding to these needs, we will open up new sources of revenue.” “Our research highlights that SaaS platforms must embrace embedded finance to remain competitive or risk being left behind. There is tremendous market opportunity here for SaaS platforms. , we are ideally positioned to deliver these within our existing ecosystem.”
This market is filled with strong demand from small and medium-sized businesses, with 50% of them expressing that they are likely to utilize a full suite of embedded financial products in the near future, reinforcing its growth potential. It has been.
“We are observing an appetite among small and medium-sized businesses to access a wider range of financial services from within their SaaS platforms, particularly with simple cash advances and checking accounts that are tightly integrated into their accounts receivable and payable workflows. ” said Stefan Dab, founder of Payments and BCG. Fintech practices.
The report highlights that top platforms currently generate more than 50% of their revenue from embedded payments and finance, highlighting embedded finance as the next significant growth vehicle for SaaS. To differentiate in an increasingly competitive market, platforms should consider integrating financial products into their services.
Adyen and BCG’s report provides a strategic playbook for SaaS platforms looking to succeed in the embedded finance space. Outline practical insights on differentiating your products from traditional banks, optimizing your go-to-market strategy, and forming effective partnerships to drive growth. Click here to access the full report.
methodology
In partnership with Boston Consulting Group, we collaborated with up to 30 leading platforms across eight industries (including restaurant and retail) across North America, Europe, and Australia to reassess the state of embedded finance for SaaS platforms in 2024. We conducted quantitative and qualitative research among up to 2,000 small and medium-sized enterprises. And hospitality.
About Adyen
Adyen (ADYEN:AMS) is the financial technology platform of choice for leading enterprises. Adyen helps businesses achieve their goals faster by providing end-to-end payments capabilities, data-driven insights, and financial products in a single global solution. Adyen has offices around the world and works with companies such as Meta, Uber, H&M, eBay, and Microsoft.
About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and seize their greatest opportunities. BCG was a pioneer in business strategy when it was founded in 1963. Today, we work closely with our clients to take a transformative approach aimed at benefiting all stakeholders, helping organizations grow and build sustainable competitive advantage. We strive to make a positive impact on society.
Our diverse global team brings deep industry and functional expertise and a broad range of perspectives that question the status quo and inspire change. BCG provides solutions through cutting-edge management consulting, technology and design, corporate and digital ventures. We work in a unique collaborative model across the firm and across all levels of client organizations, driven by the goal of helping our clients grow and making the world a better place.
1 We surveyed 2,000 small and medium-sized businesses (SMBs) across eight industries including food and beverage (F&B), hospitality, and retail in Europe, North America, and Australia.
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Source: Adyen
