Embedded Finance trends in Europe

In a recent study conducted by Forrester on behalf of Fabrick titled, “Embrace Embedded Finance for Seamless Payment Success: A Spotlight on Europe,” valuable insights were obtained regarding the state of Embedded Finance across Europe.

Embedded Finance trends in Europe

The research, which spanned across the period of September 2023 to January 2024, surveyed 600 decision-makers to assess the landscape of Embedded Finance and the critical factors influencing the choice of payment/Embedded Finance solutions providers.

Firstly, the research reveals a strong inclination towards investment in payment acceptance solutions over the next 24 months.

A notable 71% of surveyed organisations plan to either invest anew or increase their current investments in payment acceptance capabilities.

They will prioritise payment orchestration solutions (75%), digital wallets (with an 80% priority for the fashion retail sector), loyalty systems (73%), digital cards, and multi-country embedded payment solutions (71%).

Amid economic fluctuations, impending regulatory changes, and evolving consumer payment habits, European businesses are actively seeking ways to manage the increasing complexity and costs associated with payments.

The study found that 60% of respondents consider these complexities to be “challenging” or “highly challenging,” particularly regarding regulatory compliance (68%), technological innovation (63%), and the digitisation of payments (61%).

Furthermore, there is a recognised need among companies for advanced technology and expertise to navigate these challenges effectively.

Many acknowledge a reliance on third-party providers of integrated financial services to deliver value to their operations.

76% of participants deemed it “fundamental” or “very important” for payment service providers to offer comprehensive End-to-End payment cycle coverage, including back-office processes.

Challenges of reconciling payments across various methods were reported by 66% of respondents, with specific difficulties noted among insurance companies (76%) and non-banking financial institutions (71%).

Additionally, 66% of those surveyed across all sectors found it challenging to maintain a unified view of all payments across physical and digital touchpoints.

The issue of interoperability for End-to-End processing between technologies was categorised as “challenging” or “extremely challenging” by 64% of respondents, complicating the visibility of real-time payment visibility.

In light of the growth in cross-border e-commerce, the ability to accept multi-country embedded payments are prioritised by 71% of companies, with a significant 94% planning to increase their budget for this purpose.

Reflecting on the findings, Paolo Zaccardi, CEO of Fabrick, said: “This research confirms the industry’s shift towards integrated financial services.”

“As such, we have concluded that embedded finance enables companies in any sector to integrate financial solutions via APIs, allowing them to offer payment, banking, and insurance services without the need for proprietary financial infrastructure.”


The post Embedded Finance trends in Europe appeared first on Payments Cards & Mobile.