The potential of embedded finance in the B2B world is “colossal” and can have a seismic impact like Klarna did in the B2C world, according to the boss of a London-based fintech, which has just struck an embedded finance deal with the UK's largest retailer of motoring and cycling products and services, Halfords.
Embedded finance — the integration of financial services or products, such as payments and lending, into a non-financial services business — has been one of the hottest fintech trends in recent years.
Advocates say it’s a “game-changer”, bestowing manifold benefits such as speeding up and improving a company’s customer services operations.
Flexible payment terms
UK startup Kriya today announced that it had signed a deal with CVC Capital Partners-owned Halfords, which will see the retailer leverage Kriya’s embedded finance tech to offer payment and credit services for its trade account customers.
Kriya will embed its financial tools across Halfords stores, custom teams, and online and its tech will also help on-board and screen new buyers.
Kriya says one key benefit of the deal will be that Halfords will now be able to offer merchants and tradespeople the opportunity to buy parts and tools on flexible payment terms, helping them purchase items in advance.
Gaining momentum
While embedded finance is gaining momentum in the B2B world, its biggest obstacle to brands’ adoption has been brands' reticence to invest in tech.
But Kriya CEO Anil Stocker says change is afoot, powered by B2B digital adoption during Covid.
On the benefits of B2B embedded finance, compared to legacy systems, Stocker said:
“We’re now in a world where it’s possible to identify, underwrite, offer payments and collect on monies in just a few clicks, with much less friction to end users.
“It will also free up much-needed time for internal finance teams to focus on strategic projects rather than manual tasks.
“If you think about how much trade is done in B2B, it far eclipses the B2C market and so the opportunity for embedded finance to significantly power growth and efficiency is colossal.”
He likened the rise of B2B embedded finance to that of Klarna powering the B2C world.
He added:
“If you look at how Klarna got adopted in the B2C world, it only really started snowballing in 2017 and 2018. And B2B usually lags B2C innovation by seven-10 years.
"We’re standing at the start of a huge shift where embedded finance will start to become very mainstream in the next five years.”
Kriya is backed by investors including Northzone, Barclays, Santander, and Cogito Capital Partners.
Lead image: vwalakte
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