An embedded finance provider is defined as a platform that is able to provide financial services to non-financial companies via an API connection. Most embedded finance providers specialise in account, payment, and card solutions. Crytpo companies can integrate all solutions to create a more unified customer experience and increase their own revenue streams.
Despite the increased uptake of crypto trading companies, they still face many challenges – here are some of the challenges they’re facing, and the solutions that embedded finance providers could bring them:
Crypto trading and blockchain technology are vulnerable to cyber threats, mainly due to the high demand for them, coupled with the high monetary.
Basically, this means personal information entered into crypto platforms is at risk of being stolen, but a secure embedded finance platform can greatly reduce this risk, by ensuring they’re compliant with the same regulations in place for financial institutions. For example, when your company embeds IBAN accounts, your customer data is stored and secured at a bank-grade level. All procedures like AML (anti money laundering) and KYC (know your customer) checks and risk monitoring is automatically applied for all on-boarded traders.
Limited access to banking
Crypto businesses are perceived as high-risk to banks, and as a result banks are cautious when taking on businesses that trade in upcoming markets as crypto is considered an unstable market.
Embedded finance providers allow crypto companies to create unlimited IBAN accounts where they can easily transfer and accept clients’ funds. Transactions are also monitored, allowing the company to stay in control and ensure that funds are allocated to the correct recipient.
Inconvenient user interface
Considering that most crypto traders are in the age group of 22-35, then they expect the best user experience. Today, crypto trading companies need to heavily focus on improving the user interface as well as other processes such as money deposits. While it may seem very simple, then with a incorrect payment provider your company risks losing on many new deposits and traders.
Pairing with an embedded finance provider ensures your user-experience is better because the platform’s payment system is complete, tested and reliable. Traders can easily deposits and withdraw funds when using your crypto platform.
Moreover, embedded payments opens a new revenue source for your business as you may choose to add a small markup on all outgoing payments. Meaning that you earn a certain fee every time your traders choose to withdraw money. The best thing about this option is that its easy to scale. You don’t need to invest heavily because the system is set up once and works for your business continuously. Your payments revenue scales as you enter new markets or launch new products.
You probably have noticed that the crypto market is becoming more and more competitive. Its hard to stand out with your prices or fees. Companies need to seek other possibilities to position themselves higher in the market.
You might think “how can a embedded finance provider elevate my brand?” Well, there are different ways. We already covered the fact that you can improve your customer experience, however, lately there has been a new way how brands interact more with their traders – cards.
Yes, cards, payments cards. Virtual or physical cards that have your branding all over them and that allow your traders to directly spend their profits from trading on your crypto platform.
In a 2-3 months time, your crypto company can launch a cards issuing program to all your traders. Traders can engage with your brand while not particularly using your platform. Moreover, you can earn significant revenue from the usage of these cards (interchange revenue).
Embedded Finance by PayPugs
PayPugs has developed relationships with many financial institutions and obtained several licenses in order to create a embedded finance product that suits many industries including crypto. Essentially, PayPugs embedded finance solutions allow your company to launch financial services within your ecosystem. Easily start issuing IBAN accounts, cards and facilitating payments.
If you want to know more about our offerings, be sure to visit our website or book a call with one of our colleagues to guide you through the many products and services we offer.