The value of the embedded finance market will jump 215 per cent to exceed $138 billion by 2026 from $43bn this year, according to a new study by market research company Juniper Research.
Embedded finance occurs when financial services are embedded within non-traditional financial services areas, such as banking services within a ride-sharing app, lending services within a buy-now-pay-later platform, or insurance services within an e-commerce checkout process.
The sector's growth will be driven by the increasing availability of application programming interfaces (APIs) from financial services vendors, Juniper Research said in its whitepaper, titled Why the Future of FinTech is Embedded Finance.
“The easy integration of these APIs will lower the barriers to entry for financial services and create a significant new revenue opportunity for providers of embedded finance,” it said.
Juniper Research identified five distinct segments as the main-use cases for embedded finance. These include embedded payments, embedded lending, embedded investments, embedded insurance and embedded banking.
Revenue from buy-now-pay-later services, which embed lending in the e-commerce checkout process, will account for more than 50 per cent of the embedded finance market in 2026, according to the whitepaper.
The BNPL business model, which allows consumers to make online purchases instantly and pay for them later, is booming, with services such as Sweden's Klarna, the US-based Affirm and Australia's Afterpay offering flexible financing to consumers, according to the 2020 Global Payments Report by payment processing company Worldpay Group.
In the UAE, the concept has also taken hold, with the likes of Postpay, Spotii, Cashew and Tabby all jostling for a slice of the region's burgeoning BNPL market. In May, Australia's Zip, a global BNPL platform, bought out Dubai-based Spotii in a $16.25 million deal.
“Embedded lending at point of sale is a massive opportunity for leaders such as Klarna or Afterpay, but it is also an opportunity for banks,” research author Nick Maynard said.
“As open APIs proliferate, we expect banks to take a significant interest in the market, leveraging their existing user relationships and trusted brands to create compelling propositions.”
In Australia, banks are beginning to recognise the importance of collaborating with BNPL platforms, with Afterpay this week rolling out a staff pilot for its new money-management app Money by Afterpay with Westpac, the country's fourth-biggest lender.
The app, which will provide general financial product advice and distribute basic deposit products and debit cards, will be available to customers in Australia from October this year, Afterpay said in a statement on Tuesday.
The home carousel of the Money app will display customers' BNPL balances, upcoming orders and instalments alongside their daily spending account and savings accounts, and will offer an interest rate of 1 per cent per annum.
Meanwhile, the global market for embedded insurance premiums is estimated to more than double to $10bn in 2026, from $3.8bn this year, the research company said in the report.
“Embedded insurance holds promise as a compelling way to boost the uptake of insurance for high-value products with e-commerce users. By bringing insurance directly into the checkout process and pairing it with the individual high-value item, product insurance becomes a compelling proposition,” Juniper Research said in the report.
Interest from big technology companies such as Facebook, Google and Amazon is a major driver for embedded finance development, it added.
By combining their expertise in user experience with third-party capabilities, big tech can add value and significantly broaden their appeal in a constantly evolving market. They can also diversify revenue streams by offering embedded payments.
“[However], if established financial industry players fail to adapt to embedded finance, or fail to improve their own user experiences to combat the threat of embedded finance, then they will begin to lose substantial market share,” Juniper Research said.
Grand Slam Los Angeles results
Men:
56kg – Jorge Nakamura
62kg – Joao Gabriel de Sousa
69kg – Gianni Grippo
77kg – Caio Soares
85kg – Manuel Ribamar
94kg – Gustavo Batista
110kg – Erberth Santos
Women:
49kg – Mayssa Bastos
55kg – Nathalie Ribeiro
62kg – Gabrielle McComb
70kg – Thamara Silva
90kg – Gabrieli Pessanha
Squad: Majed Naser, Abdulaziz Sanqour, Walid Abbas, Khamis Esmail, Habib Fardan, Mohammed Marzouq (Shabab Al Ahli Dubai), Khalid Essa, Muhanad Salem, Mohammed Ahmed, Ismail Ahmed, Ahmed Barman, Amer Abdulrahman, Omar Abdulrahman (Al Ain), Ali Khaseif, Fares Juma, Mohammed Fawzi, Khalfan Mubarak, Mohammed Jamal, Ahmed Al Attas (Al Jazira), Ahmed Rashid, Mohammed Al Akbari (Al Wahda), Tariq Ahmed, Mahmoud Khamis, Khalifa Mubarak, Jassim Yaqoub (Al Nasr), Ali Salmeen (Al Wasl), Yousef Saeed (Sharjah), Suhail Al Nubi (Baniyas)
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UAE currency: the story behind the money in your pockets
MATCH INFO
Rugby World Cup (all times UAE)
Final: England v South Africa, Saturday, 1pm
UAE currency: the story behind the money in your pockets
Korean Film Festival 2019 line-up
Innocent Witness, June 26 at 7pm
On Your Wedding Day, June 27 at 7pm
The Great Battle, June 27 at 9pm
The Witch: Part 1. The Subversion, June 28 at 4pm
Romang, June 28 at 6pm
Mal Mo E: The Secret Mission, June 28 at 8pm
Underdog, June 29 at 2pm
Nearby Sky, June 29 at 4pm
A Resistance, June 29 at 6pm
The%20specs%3A%202024%20Mercedes%20E200
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Stree
Producer: Maddock Films, Jio Movies
Director: Amar Kaushik
Cast: Rajkummar Rao, Shraddha Kapoor, Pankaj Tripathi, Aparshakti Khurana, Abhishek Banerjee
Rating: 3.5
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
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What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
Expo details
Expo 2020 Dubai will be the first World Expo to be held in the Middle East, Africa and South Asia
The world fair will run for six months from October 20, 2020 to April 10, 2021.
It is expected to attract 25 million visits
Some 70 per cent visitors are projected to come from outside the UAE, the largest proportion of international visitors in the 167-year history of World Expos.
More than 30,000 volunteers are required for Expo 2020
The site covers a total of 4.38 sqkm, including a 2 sqkm gated area
It is located adjacent to Al Maktoum International Airport in Dubai South
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UAE currency: the story behind the money in your pockets
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
yallacompare profile
Date of launch: 2014
Founder: Jon Richards, founder and chief executive; Samer Chebab, co-founder and chief operating officer, and Jonathan Rawlings, co-founder and chief financial officer
Based: Media City, Dubai
Sector: Financial services
Size: 120 employees
Investors: 2014: $500,000 in a seed round led by Mulverhill Associates; 2015: $3m in Series A funding led by STC Ventures (managed by Iris Capital), Wamda and Dubai Silicon Oasis Authority; 2019: $8m in Series B funding with the same investors as Series A along with Precinct Partners, Saned and Argo Ventures (the VC arm of multinational insurer Argo Group)
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
