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By Faith Ashmore, Benzinga
It may now be lessnecessary for Americans to rely on a bank to succeed financially. Ase-commerce grows and digital products become more available, embeddedfinance has become an option for consumers and companies. Embeddedfinance comprises non-financial companies offering financialproducts and services. These products and services can include debitcards, payment programs, accounting software, etc.
An example of embeddedfinance in action is how Uber nowoffers its drivers a debit card where the money they make onthe app can be put on an Uber debit card, circumventing a traditionalbanking institution for its drivers. Certain brands now offer flexiblepayment options through e-commerce platforms like Klarna ; Klarna partnerswith many retailers like Ulta Beauty to offer its customers an optionto pay in full or to sign up for payment installments through Klarnawhich will break the purchase into several smaller payments.
It's estimated thatembedded financial services will produce $230billion in revenues by 2025 , a significant increase over the$22.5 billion generated in 2020. One of the main draws of embeddedfinance is the flexibility and increased options that customers gain.For businesses, embedded finance increases engagement. 88% ofcompanies that implemented some degree of embedded finance reportedincreased engagement and 85% reported that the embeddedfinance options helped them acquire new customers.
Embedded finance is onlyexpected to grow. Morethan 33% of global card spending takes place online; in theU.S. over 50% of spending takes place digitally. As Gen Z comes ofage, these percentages can be expected to climb.
Companies like Inter&Co (NASDAQ: INTR) understand the importance ofembedded finance in a growing digitized world. Inter is a digital bankthat offers a complete range of services in banking, investments,credit, insurance, and cross-border services. The company operates inBrazil and the United States. Everything on the platform is integratedinto a simple, easy-to-use app. Inter is now focused on expanding itsSuper App capabilities to the U.S. With the acquisition of remittancesbusiness USEND, Inter&Co began offering a global account andremittances services to both Brazilians abroad and locals.
Interrecently announced they have become a certified paymentprovider with Amazon. Now Inter’s Brazilian clients who are sellerson Amazon Marketplace will be able to receive and send paymentsdirectly to their Inter digital accounts.
AloisioMatos, Head of Cross-Border at Inter, shared, "Becoming acertified provider with Amazon is an important milestone for Inter aswe continue supporting our commitment to making our clients' liveseasier and helping them achieve their financial goals. To make thishappen, we have swiftly and successfully implemented significanttechnical and security developments. We are excited to see thisdevelopment as it brings benefits and peace of mind to ourusers."
Interis using embedded finance to empower entrepreneurs to succeedfinancially. Embedded finance could be a big player in e-commerce inthe coming years and companies like Inter can become essential tosmall businesses that are looking to leverage embedded finance tosucceed in their goals.
One way Inter is succeeding in building a powerful platformthat goes beyond banking is through its Inter Shop. Inter Shop started in 2020 and is a marketplace for its usersto shop at. Inter Shop has major partnerships like Amazon, Nike, andMagalu. The marketplace allows customers to access retail goods andget cashback without ever needing to leave the platform. As morepeople are drawn to simple e-commerce opportunities, platforms likeInter have the possibility to lead the pack and gain customers. Whilethe rest of the banking industry offers 4-5% cash back at the most,Inter is able to offer 10% cash back for purchases made with majorbrands and retailers, such as Apple, Target, Amazon, or airlines suchas Delta, American Airlines, and Southwest.
Supported by the success of the Super Appin Brazil, Inter is rolling out more and more financial andnon-financial services through its Super App to U.S. customers.Ultimately, Inter sees its users around the world using the app forshopping, insuring cards, investing through the investment platform,buying plane tickets, paying trip expenses through its GlobalAccount…and more, all in a single app.
This article was originally published onBenzinga here .
Inter&Cois the holding company of Inter Group and indirectly holds all ofBanco Inter’s shares. Inter is a digital bank that simplifiespeople’s lives, where everything is integrated in a single app. InBrazil, under the Inter brand, the company offers a complete suite ofservices in banking, investments, credit and insurance, in addition toa virtual mall that brings together the best retailers in Brazil andthe US. The company’s US digital account, under the Inter Globalbrand, allows individuals and companies to make transfers in U.S.dollars quickly, safely and 100% online, as well as process paymentsfrom several international platforms. It also offers debit cards, giftcards with cashback, and ACH/Wire transfers to any account in the US,serving as a hub for the needs its customers have in a world withoutborders. Inter&Co is listed on Nasdaq under the tickerINTR.
This post contains sponsored advertising content.This content is for informational purposes only and is not intended tobe investing advice.
This material may containforward-looking statements regarding Inter, anticipated synergies,growth plans, projected results and future strategies. While theseforward-looking statements reflect our Management’s good faithbeliefs, they involve known and unknown risks and uncertainties thatcould cause the company’s results or accrued results to differmaterially from those anticipated and discussed herein. Thesestatements are not guarantees of future performance. These risks anduncertainties include, but are not limited to, our ability to realizethe amount of projected synergies and the projected schedule, inaddition to economic, competitive, governmental and technologicalfactors affecting the Bank, the markets, products and prices and otherfactors. In addition, this presentation contains managerial numbersthat may differ from those presented in our financial statements. Thecalculation methodology for these managerial numbers is presented inInter’s quarterly earnings release. Statements contained in thisreport that are not facts or historical information may beforward-looking statements under the terms of the Private SecuritiesLitigation Reform Act of 1995. These forwardlooking statements may,among other things, beliefs related to the creation of value and anyother statements regarding Inter. In some cases, terms such as“estimate”, “project”, “predict”, “plan”,“believe”, “can”, “expectation”, “anticipate”,“intend”, “aimed”, “potential”, “may”,“will/shall” and similar terms, or the negative of theseexpressions, may identify forward looking statements. Theseforward-looking statements are based on Inter's expectations andbeliefs about future events and involve risks and uncertainties thatcould cause actual results to differ materially from current ones. Anyforward-looking statement made by us in this document is based only oninformation currently available to us and speaks only as of the dateon which it is made. We undertake no obligation to publicly update anyforward-looking statement, whether written or oral, that may be madefrom time to time, whether as a result of new information, futuredevelopments or otherwise. For additional information that aboutfactors that may lead to results that are different from ourestimates, please refer to sections “Cautionary Statement ConcerningForward-Looking Statements” and “Risk Factors” of Inter&CoAnnual Report on Form 20-F. The numbers for our key metrics (UnitEconomics), which include active users , average revenue per activeuser (ARPAC), cost to serve per active cliente (CTSAC) and crossselling index (CSI), are calculated using Inter’s internal data.Whether based on what we believe to be reasonable estimates, there arechallenges inherent in measuring the use of our products. In addition,we continually seek to improve estimates of our user base, which maychange due to improvements or changes in methodology, in processes forcalculating these metrics and, from time to time, we may discoverinaccuracies and make adjustments to improve accuracy, includingadjustments that may result in recalculating our historical metrics.The financial information, unless otherwise stated, is presented inmillions of reais, in accordance with the consolidated financialstatements, in IFRS.
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