Insights

As part of the fintech market expansion over the last years, fintechs came up with new offerings to attract new segments in the market. Embedded finance enriches a non-financial consumer experience with a financial product. Financial products were traditionally offered by financial institutions but now they become part of a digital customer experience. It is integrated with one single platform to reduce barriers and simplify the life of users.

A company that provides non-financial services, such as an online shopping site, can offer a spot-on solution to accelerate the purchases of customers and improve the overall customer experience. Currently, retailers and gig economy companies are leading the way to embedded finance, however fitness clubs, gaming, non-profits and healthcare are expanding the use cases.

As reported in the recent study of Bain & Company in the US, transactions through embedded financial services amounted to $2.6 trillion in 2021 and will reach $7 trillion by 2026. Those numbers are an indicator of how customers are shifting their interactions with their finances, along with their customer experience.

Types of embedded finance

Most of the development in embedded finance takes place in products like deposits, payments, issuing, lending and insurance. These offerings form an easy integration with a consumer experience, it is straight forwarded to develop new use cases and it enables different opportunities for money movement.

Embedded banking

With embedded banking, also called Banking-as-a-Service, non-financial companies offer their users a virtual or IBAN account to hold funds and make payments. Embedded banking typically makes the most sense for sellers or service providers using a company's platform to conduct business. It is often also the basis to offer additional embedded finance products like payments, cards and lending.

For example, an acquirer can provide merchant settlements on their own IBAN accounts that can be used by the merchant to pay for supplies.

Embedded Payments

Taking out a debit or credit card, entering the PIN or tapping the card is a friction point that can cause consumers to abandon a digital purchase should their card not be handy. It is a total frictionless process in embedded payments as no plastic card is required.

The best example is the Uber taxi paying experience where the app stores the card data and payments are frictionlessly done when ordering a taxi.

Embedded payments are not only restricted to cards, but they can also give consumers the possibility to pay directly from their bank accounts.

An interesting global survey conducted by IDC revealed that within 2030, 74% of digital consumer payments will be made with platforms offered by non-financial institutions.

Embedded Card Issuing

Branded debit and credit cards exist for quite some time. As part of embedded finance, the use cases for using cards outside traditional retail payments are unlimited. For example, in the B2B space today expense management applications are able to issue one-time virtual T&E cards and are able to perform better spending controls in order to avoid that staff members use plastic corporate cards for private use.

Embedded Lending

In the past lending money for large purchases was done via credit cards or a traditional loan with a financial institution. The rise of new players and specialists in the fintech industry has led to significant growth in the lending area. Over the past few years, several BNPL platforms such as Klarna and Afterpay proliferated and gave consumers new opportunities to access funds easily when purchasing goods and services. The report concluded by Bain & Company estimated that by 2026, the market size brought by BNPL platforms will reach $265 billion. Their research showed also how customers are inclined to spend slightly more when using BNPL platforms, increasing conversion rates and revenues. Thanks to new accessible and frictionless technologies, embedded finance in lending is now becoming a significant part of the way consumers and businesses access funding.

Embedded Insurance

The continuous increase of data collected in all fields is not sparing the insurance market which collects information to be used for tailor-made and competitive policies. Embedded insurance programs differ from traditional insurance because they eliminate the insurance agent or broker for example when purchasing a new car or when using traditional payment methods. These new digital platforms enable traditional insurance companies to manage time-consuming and laborious activities such as claim registrations by offering a better customer experience, and technological platforms. We are also seeing new players outside of insurance using embedded finance to deepen customer relationships and drive loyalty. A great example is offered by Tesla, which offers competitive insurance policies when purchasing a new car, instead of being a separate part of the process.

How should an embedded finance platform look

Embedded finance platforms improve customer experience, journey and design to non-financial platforms. This is made possible thanks to an ecosystem made of partnerships between banks, technology providers, and distributors of financial products. Customers and businesses that use these modern interfaces can easily integrate their software thanks to open APIs and benefit from high levels of flexibility and configurability. Plus, a platform's embedded finance offering comes also with scalable and reliable micro-services, flexible workflow configurations and a centralized customized dashboard that permits companies higher dynamicity and a shorter time to market.

TAS Global Payment Platform (GPP): how should an embedded finance platform look

Hundreds of financial institutions choose the TAS Global Payment Platform (GPP) to provide a better payment experience and enable faster time to market. The GPP platform is suited to any ecosystem operator between banks, technology providers, and distributors of financial products to guarantee a great and seamless customer experience. We work with businesses in digital banking, BNPL, insurance, travel and payments thanks to a highly configurable platform with open APIs.

Our embedded finance offering comes with scalable and reliable micro-services, flexible workflow configurations and a centralized custom overview that permits companies higher dynamicity.

We were very pleased to welcome Cascade’s CEO Spencer Schmerling and VP of Compliance Sarah Zeal to our Italian offices in Bologna, Rome and Milan.

As a US-based Banking-as-a-Service provider, Cascade provides Mobile Banking Services, Card Issuance, and Enrolment for card programs as well as a web-based banking portal, mobile app, and contactless payment capabilities.

Cascade was TAS's first US customer, and has launched a number of card programs with Mastercard and Visa using TAS's Card Issuing and Processing software. The project, which involved the integration into the American interbank clearing house (ACH), was completed in Q4 2020, and the first card programs launched in Q1-Q2 2021.

At the end of November, Spencer and Sarah came to visit TAS to get an update on the company and its offering and learn of the product and service roadmap.

“We are very happy with this visit and very impressed with the members of the senior leadership team who we met. We are very confident with TAS's deep knowledge of the payments sector and its ability to provide innovative solutions to the market”, Cascade's CEO Spencer Schmerling said.

“We appreciate the trust Cascade put in TAS and in our ability to create and deliver solutions and services around the world”, TAS CEO Valentino Bravi added.

“We enthusiastically welcomed Spencer and Sarah to Italy. We have built a strong partnership with Cascade that we are sure will lead to new interesting projects in the future” Peter Caiazzi, SVP Product Development, TAS International commented.  

Thanks to the agreement signed with Danish fintech SoftPay, TAS will enable the acquiring of contactless payments from Android mobile devices in Italy. The benefit provided by the SoftPos solution to merchants is simple and immediate: allowing to transform their phones into a ready-to-use payment terminal, without the need for additional certified hardware, thus reducing the heterogeneity and complexity of multi-device management at the point of sale.

The shopping experience is also improved for the buyer, who can complete the payment faster, avoiding long queues at the checkout.

The merchant APP is available on the Google Play Store and can be used in white label mode, or easily integrated with any APP already in use by the merchant.

The solution is certified with Visa and Mastercard, and is also available for mobile wallets - such as Apple Pay, Google Pay, Samsung Pay - whose payments are processed in a similar way to standard EMV transactions managed by traditional POS devices. For maximum user security, a specific certified component manages the typing of the PIN on Glass on the Android device, ensuring absolute confidentiality.

The SoftPos solution is offered by TAS to banking operators and their processors as a service in Cloud; in this way the impact on the Service Provider is minimal, avoiding to disrupt the infrastructures already in use to manage the POS channel.

The innovative solution created by TAS for the Tuscany Region over 10 years ago still represents today a best in class platform for accessing debt positions and collecting payments in compliance with the public national pagoPA circuit. This is proved by other important regional administrations such as Lazio, Umbria and Sardinia, having chosen to reuse the same core platform, adapted by TAS to their specific requirements. Similar solutions for pagoPA payments have been provided by TAS through partnerships also to central Public Administrations such as the Italian Medicines Agency, the Ministry of Health and InfoCamere. Based on the PayTAS proprietary framework, the platform has been built to meet the multiple needs of public administrations and any creditor who provides services of public interest, in the provision of end2end collection and payment services, with a technical and operational approach aimed at facilitating the participation of as many administrations as possible into the pagoPA ecosystem. IRIS, the solution created for the Tuscany Region, more specifically addresses and optimizes the following tasks:

• administrative and technical enrollment of public bodies belonging to the Tuscany territory
• standardization of interfaces and integration with the national IO App system, with full reconciliation of receipts
• simplification of the payment experience of the users (citizens and businesses)
• integration with regional apps
• integration with the centralized booking system for public healthcare services (CUP) and the Pharmacies of the Tuscan Health Service.

Particular attention was paid to the multi-channel freamework, based on a rich catalog of APIs covering the most innovative mobile acceptance devices as well as the more traditional ones. The positive track record and the close synergistic collaboration experienced by Tuscany Region with TAS during the last decade triggered the renewed appointment for the maintenance agreement dedicated to the evolution of IRIS for the next years to come. TAS is a leading provider in the digital payments platforms and services for the financial sector, in particular for the latest trends such as Open Banking, PSD2, Instant Payments and Request2Pay. TAS solutions for the B2G space are offered on premises or in cloud, thus allowing minimum in-house and up-front costs. Market operators can design their payment services leveraging a set of standardized and simplified interfaces, including those that integrate Italian Municipalities, which allows for a significant acceleration in public administrations onboarding. The platform customized for PSPs enables the measurement and matching of high service performance levels and continuous process monitoring, and satisfies all integration scenarios with the domestic pagoPA scheme in a scalable and stable way despite the huge and constantly increasing number of payment transactions generated by key sectors such as multi-utilities and public healthcare companies.

Lugano, 9 May 2022 – Infraxis AG, part of TAS Group, a leading technology provider in the Payments space, will be exhibiting at the upcoming UNITI EXPO taking place in Stuttgart from May 17 through 19. We’re proud to be at UNITI 2022, where we’ll be co-exhibiting with CCCBusiness Service AG, our processor partner servicing the top forecourt operators and fuel card issuers in Switzerland and beyond.

The state of the art PayStorm Fuel platform is powering CCC business by supporting leading Fuel Industry operators on a daily basis. Infraxis is continually investing in the PayStorm platform, bringing the challenger bank paradigm to the processing of fleet cards, forecourt acquiring and EV charging apps.

PayStorm efficiently solves challenges associated with acquiring and authorizing fuel card payments through its highly adaptable design, enabling the realization of different business needs within the minimum of time and with the minimum of cost.

“Whether your organization needs to acquire internationally branded cards, perform authorisation against a small to medium sized card portfolio, or to simply to switch out to a card issuer for authorisation, Infraxis has the solution ready to satisfy your processing requirements.”- commented Manfred Thomi, CEO of Infraxis.

At the UNITI Expo Infraxis stand visitors will be able to assess the ease of app integration via APIs for mobile-first onboarding and self-management for both fleet cards and international payment brands.

UNITI Expo, the leading retail petroleum and car wash trade fair in Europe, is finally back in-person, with 4 themed exhibiting areas. Infraxis AG welcomes all interested visitors in Hall 5, the Technology, Payment & Logistic area, at booth 5A20.

Milan – 9 December 2021 – Cloud and security. These are the keywords TAS Group is focusing on to offer its customers and partners increasingly agile solutions, guaranteeing the highest levels of performance, safety and scalability. TAS Group has been playing a central role in the payments industry for over 35 years. For more than a decade it has been providing Italian and International issuers, acquirers and processors with software solutions validated according to PCI Council compliance standards, and services certified under the PCI-DSS security standard, issued by the PCI Council for payment service providers. With the aim of making its solutions ever easier to adopt and accessible to new players in the Open Banking and Open Finance ecosystem, TAS has developed the GPP - Global Payments Platform, which integrates under a single architectural concept its own offering in the field of cards, account-based payments, transaction banking and financial value chain. Powered by the innovative "as a service" logic in the cloud, the GPP accelerates the delivery of flexible, efficient services to market while responding to changing regulatory requirements. In this roadmap, TAS Group relies on qualified partners, able to guarantee the highest levels of safety and regulatory compliance. This is the case of Amazon Web Services (AWS), to which TAS Group migrated its POS payment acceptance services in early November, successfully submitting itself to the PCI-DSS Level 1 Service Provider certification, the highest level of PCI certification for payment service providers. The new infrastructure is based on container architecture and makes extensive use of AWS services, such as Amazon Elastic Kubernetes Service (Amazon EKS) and Amazon Aurora. Among the benefits achieved by the migration, the main ones concern the simplification of Business Continuity, the decreased effort of TAS personnel dedicated to managing infrastructures, but above all the greater flexibility and scalability of the service offered to customers, crucial characteristics for being agile in the face of constantly evolving market conditions. "The world of acquiring and omnichannel payment acceptance is evolving at extremely high rates, both in terms of consumer preferences for the payment method and channel, and in terms of habits and therefore transaction volumes and peaks", explains Massimiliano Quattrocchi, Country Manager of TAS, “For an ISV such as TAS it is essential to constantly develop and evolve its applications, guaranteeing good independence from basic hw / sw infrastructures and the ability to take advantage of the most advanced technologies and innovations offered by the market. We have chosen to rely on AWS for a number of factors, including the PCI certification already obtained by this Cloud Provider which is the market leader in the Finance sector. The support of AWS has been continuous and invaluable in successfully passing the PCI DSS compliance certification in early November, just in time to face the hottest shopping period of the year. " The new POS management configuration offered by TAS relies on the AWS infrastructures located in the Dublin and Frankfurt regions, which are strategic both in terms of geographic positioning and for the characteristics of the services sought by TAS. The transformation path of TAS Group from software solutions supplier to enabler and facilitator of the customers’ business model by providing platforms and tailored "as a service" solutions is a strategic direction launched in recent years by the Group, which sees the Cloud as one of the essential cornerstones. Through the provision of services that can be configured and activated with reduced time to market, while ensuring the customers’ ability to differentiate themselves over competitors, TAS Group has already scored some clear initial results, both in terms of economic performance growth of the Group and in terms of attractiveness for new market operators. Download the press release

TAS Group’s POS payment acceptance services have been successfully migrated to the Cloud, with no disruption to the live merchants. The new infrastructure is based on containers (Kubernetes) and makes extensive use of Amazon Web Services (AWS) PaaS services, including Amazon Elastic Kubernetes Service (Amazon EKS) and Amazon Aurora.

In addition to the proven advantages typical of the Cloud technology - such as scalability, simplification of Business Continuity, redundancy, the possibility of decreasing the effort dedicated to infrastructure management - the decision to migrate to AWS Cloud was driven by the PCI certification already obtained by this provider, a market leader in the Finance sector.

"AWS Italy has supported our team in a very effective way, both in the design and in the execution of the project," declared Andrea Paolini, IT Infrastructure Manager of TAS Group, "allowing us to obtain the PCI DSS compliance certification at the beginning of November, a few months after the launch of the initiative, and in time to face the hottest period of the year for e-commerce and in-store purchases."

The new service configuration offered by TAS Group is based on AWS regional infrastructures in Dublin, Frankfurt and Milan. The overall infrastructure is also integral part of TAS Global Payment Platform, the highly modular new enterprise payment processing architecture developed by TAS to serve both incumbents and new entrants in the Open Banking and Open Finance ecosystem.

Being able to communicate in a “brand agnostic way” is proving valuable for fintechs who are scaling up their card business in the rapidly evolving digital payments landscape.

TAS Group successfully launched its MNGS proposition in the US Region back in 2020, and has now added a first client leveraging this channel also for VISA transactions.

Thanks to the established partnership with Mastercard, TAS is able to offer simplicity and reduced unitary costs to customers who are building up their volumes supporting their end-customers preferred choice of payment methods.  

TAS Group has proudly sponsored two key EU conferences in June, Payments CEE Summit and EBAday 2021, that have clearly shown how deeply the acceleration in digitalization was able to positively impact the banking DNA.

With over 1000 professionals registered at the CEE Summit, connecting primarily but not only from the Balkans, and over 2000 delegates participating to EBAday 2021, the paramount annual conference curated by the European Banking Association, all hot payment trends were deeply debated by speakers coming from all segments of the stakeholders landscape: incumbent banks, challengers, paytechs, payfacs, regtechs, regulators, corporate clients, market infrastructures, academics and market research companies.

Hottest in the agenda: Instant Payments and their convergence with card payments, Request to Pay, Buy Now Pay Later, Fraud Detection in the Real-time era, ISO 20022 migrations, API enablement, and many more core topics, including the power of the Payments as a Service paradigm as a way to accelerate the banking modernization journey.   

In case you missed our speeches at the conferences, by Dragan Spanovic, VP Sales TAS Eastern Europe, and and Mario Mendia, SVP TAS International, you may learn more about TAS Group’s 35+ years expertise as a PayFac in the evolving European Financial Services Market on our website.