The promise of embedded payments, and the drive to embed everything, shows that commerce and the movement of money can be seamless and intuitive.
In an ongoing conversation in our “Next Steps in Payments” series exploring the rise of embedded finance, Doug Brown, chief product officer for digital banking at Candescent (formerly NCR Voyix), talks about how embedded finance is being done right. He said he could solve problems for companies. This applies not only to publishers but also to sellers. In other words, cart abandonment.
“This is a merchant problem, but it’s also a banker problem,” he says. “That’s a lost trade.”
Embedded financial solutions help guide end users to affordable and personalized payment options and are convenient enough to drive sales, he said.
“It’s a complete win-win overall cycle because you’re building in functionality wherever your customers are and when they want to use it,” Brown said.
However, beyond satisfied customers and satisfied sellers focusing on the transaction itself, banks also consider a variety of considerations when enabling built-in options such as buy now, pay later. have matters.
Brown said the parties assume the risk to ensure they are repaid and are “responsible for guaranteeing the funds and the transaction itself.”
If a particular financing option is not suitable, he said, “banks will incorporate more data in real-time to evaluate decisions and recommendations, which will reflect an overall ‘status.’ “We will also recommend alternatives.”
Beyond transactions
This means banks are in a better position than merchants to not only complete transactions. Banks have the responsibility and ability to clearly inform consumers about risks and long-term considerations.
This level of education goes beyond mere disclosure (which a merchant might make) and ideally requires consumers to consider whether they can afford to pay in equal installments over time, Brown said. said.
Data helps banks provide information to consumers. Risk must be taken into account not only at the point of transaction, but also when banks “get to know” a person, helping consumers maintain or improve their financial health. Understanding how financing options can change or even disrupt a consumer’s credit score and financial health means thinking beyond the purchase and gaining a comprehensive understanding of what happens afterward. Helpful.
competitive advantage
Mr. Brown said banks and credit unions already enjoy a high degree of trust, so ensuring financial health along with a wide range of financial options solidifies their competitive advantage. If a bank can repeat its success over time, trust will further increase.
“We’re seeing the introduction of post-purchase financing decisions,” Brown said, noting that some large and potentially difficult-to-finance deals can be paid in installments. “People can make changes, and issuers and banks are providing that service,” effectively telling consumers, “Maybe I didn’t make the best decision at the time, but now I can.” We know everything and can prescribe and prescribe.” Other options are recommended.
The conversation with Webster took place as two devastating hurricanes wreaked havoc in the southeastern United States.
“We’ve helped a lot of banks keep their infrastructure up and running, and we’ve helped them recover their infrastructure,” he told Webster. “These banks are under pressure themselves as some of their branches have been lost.”
But natural disasters illustrate how banks, data, and context can work together to not only provide consumers with the funds they need, but also to ensure they don’t become overfunded. Helpful. Many of Candescent’s financial institution customers, particularly community banks, have been instrumental in providing emergency funds and even payday advances to their customers.
In the long term, to fully realize the full potential of Embedded, we need to “bring technology to the ‘cutting edge'” across banking and commerce to support more of these real-world interactions. Brown said.
He said technology has advanced, particularly in recent years with the use of tokenization (replacing sensitive data with digital tokens that are merely representative and have no value). As tokens move with consumers through their daily lives, these commerce journeys will expand and become even more intuitive.
“It’s not just about reducing friction,” Brown said of the deal. “They will be safer and ‘guided’ to restore your financial health. This is within the broader framework of our relationships with banks and credit unions. ”
See more: banking, banks, BNPL, pay now, buy later, incandescent lights, credit unions, digital banking, Doug Brown, embedded finance, embedded payments, featured news, NCR Voyix, news, PYMNTS news, pymnts tv , Video, WhatsNextInPaymentsSeries, The Next Future of Payments: Embed Everything in 2024
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