Embedded lending is transforming the financial landscape, offering exciting opportunities for both lenders and merchants to meet the growing demand for seamless digital solutions. This surge in embedded lending is fueled by a combination of factors, including the rapid growth of e-commerce, the desire for smooth financial transactions, and the move towards more integrated and personalized customer experiences. Together, these have contributed to rapid market growth; the embedded lending segment is now estimated at an impressive $6.35 billion. Remarkably, 64.5% of this market comes from platform solutions, highlighting the vital role of fintech innovations.
Lenders and merchants are taking advantage of these fintech solutions to offer flexible, point-of-sale loan options that fit effortlessly into the customer’s journey while flexibly supporting the lending goals of the financial institution. However, selecting the right embedded lending solution is a critical starting point for a successful program. The right choice can streamline your operations, enhance customer satisfaction, and drive sustained growth, while the wrong choice can hinder your progress and limit your potential.
To simplify the solution search, we’ve put together a handy list of must-have capabilities and features that define the best embedded lending solutions. From smooth integration to strong security measures, these criteria will help you find a platform that matches your business needs and maximizes value for your merchants and their end customers.
- Configurability
For lenders, maintaining consistent branding across all customer touchpoints is crucial for building trust and credibility. A recent study found that businesses that maintain consistent branding across their solutions and online presence can increase revenue by 23%. This highlights the importance of a cohesive brand experience for your merchants and their customers who trust your institution. And visual branding is just the beginning. Seamless integration of your entire digital experience across various solutions (including your embedded lending solution) is essential to reduce confusion for customers when navigating between different services. Look for a solution that can be configured to your visual brand, your processes, your digital landscape, and the future needs of your business.
Ask these key questions about your prospective embedded lending platform:
- Does the solution offer customization options to align with your branding?
- How seamlessly can you incorporate your logo, color schemes, and other brand elements?
- Can the platform be configured to optimize and streamline your lending processes?
- Does it provide flexibility to adjust and scale as your business and branding needs evolve?
- Adaptability
As a lender, the ability to scale and adapt to changing market conditions is critical to long-term success. An adaptive solution ensures that as your loan portfolio grows into new segments, your platform can handle increased demand and a growing spectrum of loan types without compromising user experience. Adaptability goes beyond solution integrations, a seamless experience, or a well-branded interface—it refers to your platform’s ability to support any loan type, in any segment, with any funding model. Whether you want to offer HELOCs, credit card programs, or traditional unsecured loans, flexibility allows you to offer a range of loan products tailored to different merchant needs and market conditions.
Ask these key questions about your prospective embedded lending platform:
- Does the solution support scaling your embedded lending strategy up or down based on your business goals?
- Can the platform offer various loan types and terms that are flexible to different customer needs?
- Can the platform adapt to new market conditions and regulatory changes without significant disruption?
- Does it provide the ability to quickly integrate new features and functionalities as your business evolves?
- User experience
User experience is the linchpin in the success of any digital buying process—online financing included. One survey found that 70% of consumers cite poor user experience as a top reason they don’t complete a purchase. But strong user experience isn’t just a prerequisite to completing the funding process. It is also a powerful opportunity for differentiation and a key driver of program utilization for merchants and borrowers alike. Your chosen platform should not only be easy for your merchants to use and administer, but it should also provide an intuitive experience for your merchant’s end-customers who are seeking financing.
Ask these key questions about your prospective embedded lending platform:
- How intuitive is the platform interface for your institution, merchants, and borrowers?
- Does the solution provide a seamless and efficient lending process from application to approval and funding?
- How customizable is the user interface to meet the specific needs of different user groups, such as merchants and borrowers?
- What support and training are available to ensure users can effectively navigate and utilize the platform?
- Seamless integration
A recent study found that 75% of customers looking to finance their larger purchases or projects make that decision early in the buying process—far before they receive the bill. This highlights the importance of strong integration capabilities. Your merchants should be able to integrate their loan application solution directly into their digital presence and sales process—removing any friction that could deter conversions. In addition to commercial integrations, your program should also seamlessly fit into your financial institution’s internal systems and processes to ensure quick loan application receival and funding.
Ask these key questions about your prospective embedded lending platform:
- How compatible is the solution with your current systems and tools?
- How easily can your merchants integrate loan application capabilities into their digital experiences?
- What is the level of technical support provided during the integration process for both merchants and your financial institution?
- Are there any pre-built APIs or connectors available to facilitate integration with popular e-commerce platforms and financial software?
Choose the right embedded lending solution for you
With multiple criteria to consider and stakeholders to please, selecting an embedded lending solution can be a challenging process. MerchantLinQ prioritizes lenders, merchants, and end customers in an experience that is configurable to your processes, adaptive to your lending goals, and easy to integrate.
Still on the hunt for an embedded lending platform? Let us show you why MerchantLinQ checks all the boxes and more. Click here to schedule a demo today.
