by The embedded lending market is in trends of lending at point-of-sale by integrations with e-commerce platforms. The embedded lending provides contextual and convenient financing for e-commerce purchases directly on retailers’ and merchants’ websites or mobile apps. Embedded lending removes the friction of a separate application process and allows customers to pay over time without any interest or fees. This provides financing as an integrated part of the shopping experience.
The Global Embedded Lending Market is estimated to be valued at US$ 6.35 Bn in 2024 and is expected to exhibit a CAGR of 20% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the embedded lending market are Affirm, Afterpay, Alchemy, Banxware, Biz2X, Finastra, Hokodo, Jaris, Kanmon, Klarna , Lendflow, Liberis, Migo, Sivo, Stripe, Inc., Tapwater, Turnkey Lender, and Zopa Bank Limited. These players are focused on partnerships with e-commerce platforms and retailers to integrate their lending solutions and ride on the rapid growth of the market.
The growing demand for financing at point-of-sale is driving the adoption of embedded lending solutions. Embedded Lending Market Trends allows retailers to offer an easy financing option to more customers and increase average order value. It provides an improved checkout experience compared to a separate financing application.
The embedded lending market is witnessing global expansion with partnerships between lending fintechs and e-commerce giants operating across geographies. Embedded lending reduces friction for cross-border purchases by offering localized financing options. It allows global merchants to expand to new markets by integrating lending solutions.
Market key trends
Open banking is enabling the use of financial transaction data from bank accounts with customer consent for underwriting embedded loans. This is improving approval rates and allowing embedded lenders to better determine affordability for customers. Open banking data analysis helps Embedded lending Market Size And Trends reduce risks, lower fees for customers and improve financial inclusion by serving more borrowers.
Porter’s Analysis
Threat of new entrants: High cost and infrastructure associated with financial services and sophisticated software lowers the threat.
Bargaining power of buyers: Buyers have bargaining power as there are multiple options available and switching costs are low.
Bargaining power of suppliers: Suppliers like financial institutions and technology companies have some bargaining power due to their specialized offerings and expertise.
Threat of new substitutes: New financial products and alternative lending methods can emerge as substitutes.
Competitive rivalry: Intense rivalry exists among the fintech companies providing embedded lending solutions due to similarity in offerings.
Geographical Regions
North America currently holds the major share of the global embedded lending market in terms of value. This is attributed to the strong presence of fintech companies and early adoption of new technologies in the region.
Asia Pacific is expected to be the fastest growing regional market during the forecast period. This is owing to the rising internet and smartphone penetration coupled with growing demand for digital financial services in developing countries like India and China.
*Note:
1. Source: Coherent Market Insights, Public Source, Desk Research
2. We have leveraged AI tools to mine information and compile it
About Author - Alice Mutum
Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights. LinkedIn
