Embedded Finance And How It Addresses Cash Flow Problems In Affiliate Marketing

Recent technological developments are driving seamless payments and more cost-effective payment options. These factors make them a key driving force in the growth of embedded finance, a market whose value is projected to surpass $228 billion by 2028.

What is Embedded Finance?

Embedded finance, or embedded banking, refers to integrating financial services or tools within a non-financial company’s products, services, or platforms. The goal is to make financial services more accessible and convenient for customers by providing them at the point of need, without requiring them to visit a traditional financial institution.

Embedded finance has the potential to significantly impact both businesses and consumers. For fintech companies, embedded finance offers a wider range of financial services, enabling customers to access tailored financial solutions that meet their individual needs.

However, if companies fail to meet the changing demands of their target audiences, then this could lead to poor payment solutions that affect cash flow. Small and medium businesses (SMBs) and affiliate publishers frequently grapple with limited cash flow and rising interest rates. Some companies take too long to pay their partner businesses. This delay hinders SMBs and publishers who depend on timely payments to reinvest in their operations.

Embedded finance fundamentally aims to improve customer experience and add value. By eliminating these payment delays, embedded finance can enhance cash flow and create a smoother financial journey for all parties involved.

This aligns with Mitgo Group’s strategic expansion into the fintech services market for the affiliate marketing sector, projected to exceed $15.7 billion in spending this year.

How Embedded Finance Technology Can Potentially Transform the Affiliate Marketing Landscape

Reflecting on our experience in embedded finance, we envision a transformative shift in the affiliate marketing landscape within the next five years. Why? The answer lies in the power of embedded finance technology to revolutionize how we do business, particularly in its ability to tackle one of affiliate marketing’s most persistent challenges: the urgent need for stable cash flow.

Picture this: One of our clients is dealing with an issue where a publisher may have to wait 180 days before receiving payment. It’s akin to a marathon runner being told to pause mid-race, tying up their energy and momentum, and then expected to sprint to the finish line. Not many businesses have the appetite to operate under such conditions, holding their breath and hoping for the best as their money remains tied up for an extended period.

For affiliate partners, the speed of receiving funds is not merely a convenience but a critical factor in their operations. Embedded finance solutions can help affiliate publishers access working capital swiftly, ultimately enabling them to allot more resources to their marketing efforts and team expansion. 

Introducing embedded finance solutions into the affiliate marketing ecosystem promises a refreshing disruption. For instance, affiliates who were previously hesitant to participate, primarily due to prolonged payment terms, might be enticed to explore these innovative solutions. Tools such as digital wallets that expedite the receipt of funds and minimize transaction costs are particularly attractive.

With such benefits, we can foresee an expansion in the number of affiliate partners and a surge in affiliate-driven sales. The rapid influx of funds can empower publishers to reinvest extensively, fueling the sector’s growth. 

Mitgo Group’s new division will, among other benefits, allow global publishers to instantly withdraw their earnings, access loans, and improve transaction speed.

Utilizing Embedded Finance to Improve Cash Flow in Marketing

Today, numerous platforms and fintech companies claim to focus on embedded finance. Yet, many fail to fulfill all its critical functions. They may be familiar with functions like product delivery or product development, but they often lack a solid understanding of their client’s business. 

So, how can you apply embedded finance in marketing to ease cash flow problems?

Understand your Client

The journey begins with a deep dive into your client’s world. The more you understand the behaviors, needs, and preferences of your client’s customers, suppliers, or employees, the more value you bring to the company. You can even harness the power of data to gain a comprehensive understanding of your audience. This insight will enable you to craft customized solutions addressing their pain points.

Gather the Financial Expertise Yourself

Why not outsource the expertise? Outsourcing has its drawbacks. External experts might not fully understand your specific needs and may deliver work that does not meet your standards. If you choose not to build a financial expertise team internally, consider partnering with individuals or firms with wide-ranging expertise in finance and business analytics, consulting, and other related fields.

Develop Strategic Partnerships

As you build your embedded finance strategy, consider forming alliances with other fintech companies, financial institutions, and non-financial enterprises. Depending on your company’s scale, you might approach established payment systems like Visa or Mastercard or consider a provider of payment solutions and infrastructure.

In this process, it’s crucial to understand which financial products can be integrated, how they should function, why this integration will prosper, and how it will benefit your company.

Focus on User Experience

As you formulate potential solutions, keep the user experience (UX) front and center. The challenge lies in executing your solution without compromising on user-friendliness. Strive to offer solutions that ensure a seamless and convenient experience for end users.