Global card issuing service provider Marqeta released its latest State of Payments report, highlighting that UK customers are embracing embedded finance solutions. The report spanning three continents indicates how customers no longer consider embedded finance and other digital services as a new solution but are embracing the added value it brings to their lives.
Utilising innovative payment solutions
The digital tech industry that combines the physical and virtual worlds is transforming everything from how we interact with one another to the businesses we engage with, but the pace of change in the finance industry is considerable. One method businesses, banks and fintech have adopted focuses on meeting the evolving consumer demands by implementing embedded finance with new services such as in-app payment solutions, and buy now, pay later (BNPL) that enhance the overall purchasing experience.
The report provides information on purchasing preferences and shows the confidence customers have in new digitalcustomers’ confidenceded finance. The study indicates that over 70% of UK mobile wallet customers have made a recent purchase via an embedded mobile solution, thanks to an overall enhanced customer experience. A further 73% of UK mobile wallet users also suggested that they feel confident to leave their wallets at home and rely on their phones to make payments.
Confidence in these payment solutions continues with digital payment services, with 76% of UK respondents saying that they will always add a new card to their mobile wallet and nearly 90% claiming it is a relatively simple process, a considerable rise to the previous year. Mobile payment solutions have continued to rise in popularity as a seamless and convenient option.
Representatives from Marqeta state that embedded finance enables brands to become financial service providers, providing customers with more streamlined payment solutions. The report suggests that after several years of innovation in digital services, customer confidence in embedded payment options is considerably high, and businesses that fail to offer these services will potentially miss out on future adoption.
Customers’ trust remains high in traditional banks
While the demand for digital and embedded finance services is becoming a mainstream solution for banking preferences, UK customers remain very committed to primary and traditional banks. Over 80% of survey respondents stated that they continue to use traditional banks as their primary providers, with over 40% saying they had been with their banking provider for over ten years. A further 77% said they had no plans to move away from their primary banking provider. The majority of respondents continue to use their primary bank provider for debit card or savings account services.
Notably, UK customers are balancing their commitment to primary banking providers with their demand for enhanced customer experiences for various capabilities. The Marqeta study suggests that over 40% of UK respondents would consider acquiring financial solutions from non-financial providers, like technology companies, retailers or social networks. Marqeta representatives also highlighted that we are at an inflexion point with legacy providers coexisting with new payment services. While the report indicates a balance between traditional and digital solutions, embedded finance impacts businesses on how they develop payment solutions into their offerings. Long-term customer loyalty depends on who can provide the most innovative and seamless customer experiences.
