Embedded Finance Makes Transactions E昀昀ortless Financial services are increasingly o昀昀ered within digital experiences where customers are already spending their time. The last decade indicated that banks are no longer the durable institutions that center communities. The number of U.S. commercial banks has fallen from 18,000 to below 5,800 over the last three decades35. Banking has moved toward app-based systems and is now happening in the context of where we’re already spending our lives online. Embedded banking means integrating 昀椀nancial services of all types into third-party platforms through APIs. Importantly, customers don’t want the 昀椀nancial service, they want what the 昀椀nancial service enables. Tools like photo capture for check cashing and P2P payments have paved the way to conduct paperless transactions at your 昀椀ngertips in lieu of the antiquated act of “going to the bank.” We have graduated to a new level where many consumer apps are adding banking services and the lines between banking and customer services are further being blurred. You can pay for your Uber and simply leave when the ride ends. There is no cash or credit card activity that needs to happen—it’s automatic. When you’re managing your supply chain in Coupa, instead of leaving the app to pay your vendor, you can spin up a payment right there in 昀氀ow. In our view, the most popular application of embedded 昀椀nance today sits within SaaS. We believe that companies like Square, Coupa, ServiceTitan, Shopify, and Wix have trans- formed their product lines and signi昀椀cantly grown their TAM by o昀昀ering 昀椀nancial products within their software. By leveraging infrastructure from Stripe, Payrix, or In昀椀nicept, or by going direct to WorldPay to become a payment facilitator, these businesses have grown the LTV of their customers substantially. Suddenly, a business goes from o昀昀ering software only to o昀昀ering software, payments, issuing, and lending. for software companies, the evolution from saas 1.0 (software only) to saas 3.0 (fully embedded finance) can expand cltv36 SAAS 3.0 Commerce platform • Saas revenue • Online payments • Point-of-sale payments SAAS 2.0 • Issuing Software platform • Lending SAAS 1.0 • Saas revenue • Instant payouts Software company • Online payments • Software (e.g. billing) • Saas revenue only Embedding 昀椀nancial services improves customer experience and expands CLTV 2-5x EMBEDDED FINANCE MAKE TRANSACTIONS EFFORTLESS SHARE VISIT PG 25