Integrated payments to generate 277 billion euros in revenue in Europe over the next 5 years

In Europe, businesses of all sizes and in all industries are realizing the opportunity of integrated finance and most plan to join the movement by integrating transparent payment capabilities, a new study by a paytech and finance specialist. banking as a service (BaaS). OpenPayd found.

the survey, conducted in mid-2021, interviewed 150 business decision makers from the UK, France, Germany, Italy and Spain to find out their views on integrated payments and assess their interest in implementing these solutions.

The results of the survey show that although only a few companies surveyed (4%) indicated that they currently offer integrated payment capabilities, almost all (96%) plan to provide such features to their customers within the last five years. next few years or are seriously considering doing so. .

Almost a quarter (22%) said they incorporated payments under development, and three-quarters said they expected to bring products to market within the next two years. The rush to embrace integrated payments will bring the total revenue generated by these solutions to a total of 277.46 billion euros by 2026, estimates OpenPayd.

Adoption of integrated payments in Europe, Source: OpenPayd, December 2021, via integrated payments and the reinvention of customer experiences

Customer demand will be driving the trend, with 70% of respondents citing changing consumer perspectives as the main reason for implementing integrated finance. Other key factors cited included new revenue streams (67%) and improved customer experience (63%).

Engines of integrated finance, Source: OpenPayd, December 2021, via integrated payments and the reinvention of customer experiences

Engines of integrated finance, Source: OpenPayd, December 2021, via integrated payments and the reinvention of customer experiences

Embedded finance takes off

Payments isn’t the only area businesses are looking to capitalize on, research shows. After integrated payments, European companies are also looking to adopt integrated banking (94%), integrated short-term loans (69%) and integrated insurance (69%).

European companies with projects concerning integrated finance, Source: OpenPayd, December 2021, via Embedded Payments and the Reinvention of Customer Experiences

European companies with integrated finance projects, Source: OpenPayd, December 2021, via Embedded Payments and the Reinvention of Customer Experiences

Integrated finance is one of the hottest trends in the fintech industry, an industry that Juniper Research predicted will be worth at least $ 138 billion by 2026, up from just $ 43 billion in 2021.

This growth of more than 215% will be fueled by the increasing availability of APIs from financial service providers, according to the company, coupled with the increase in buy-now, subsequent payment (BNPL) agreements, which are expected to represent more than 50% of integrated costs. financial market in 2026.

Investors are also helping to fuel momentum, pouring millions into space startups. Just two weeks ago, the Anthemis Group investment platform announcement that he had raised 700 million dollars to finance startups in integrated finance and start-up fintechs.

The fundraiser came in the wake of the closing of the enormous Series E round of funding of € 235 million, which brings the valuation of the company to 4.9 billion euros. Dutch startup Mambu offers APIs and analytics to support the development of banking, lending and depositing products. The company serves more than 200 business customers, including Raiffeisen Bank, N26 and ABN Amro, and 53 million end users.

Tapping into the underserved SME market in Europe

In Europe, the banking of small and medium-sized enterprises (SMEs) is an area where integrated finance is set to make waves. Despite being a vital part of the European economy, SMEs have long been an underserved segment for banks largely due to the difficulties in assessing their credit risk and the attendant challenges in lending and create real added value for these customers.

Seizing this market opportunity, fintech startups and platform players are increasingly using integrated finance to target small businesses and entrepreneurs, providing them with accounting, financial management, productivity and collaboration solutions. based on the cloud that integrate seamlessly into their daily lives. workflow.

Non-bank integrated finance pioneers include Stripe Capital, which provides end-to-end lending APIs for platforms like Shopify to deliver financing options to SMB customers, Square, an evolving online payment specialist. towards an ecosystem of solutions and services for SMBs, and Intuit’s brand of QuickBooks accounting software, which has expanded to corporate bank accounts and other banking and financial management capabilities.

Accenture estimates that integrated financing could expand the SME banking market and generate revenue growth of up to $ 92 billion by 2025. Integrated financing could capture up to 26% of the global SME banking market, accounting for nearly $ 124 billion in value by then, the company says.

The global integrated financial services market is expected to reach $ 124 billion by 2025, Source: Accenture, December 2021, via Integrated finance for SMEs - The ultimate collaboration of banks and digital platforms

The global integrated financial services market is expected to reach $ 124 billion by 2025, Source: Accenture, December 2021, via Integrated finance for SMEs: the ultimate collaboration of banks and digital platforms

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Mary I. Bruner