Hi embedded finance friend

Today’s newsletter is taken over by news from infrastructure providers. After I finished selecting the news items for this edition, I realised all of them are from infrastructure providers. Not on purpose, I promise ;-)

Infrastructure providers are the invisible background players that users often have never heard about. At least until things go wrong. Yes, not all problems are caused directly by an infrastructure provider. But they are almost always part of the chain.

And on that note, a personal message…

Are you in the process of selecting a new infrastructure provider for your embedded finance or fintech product? This could be a new banking, lending, payment, or investment product. Then feel free to ping me for exclusive access to resources that aim to help companies like yours.

And no matter if you are looking for a new provider or not: join us for our very own Embedded Finance Review Event on October 10th in Berlin. We are partnering with Berlin SaaS Week, and we will have a great lineup of speakers and participants from fintech companies and non-financial brands. If you work in embedded finance or are just curious what the buzz is all about, then make sure to get your ticket.

But now let’s dive in 👇

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British banking-as-a-service provider Griffin opens business to everybody

Griffin has been a name in the British fintech and embedded finance market for some time, but until last week, their product and services were only available for a very limited number of companies:  companies that were part of Griffin’s Foundation programme. The programme was designed to test and learn with friendly clients before opening up to the general public.

But now Griffin is available to everybody (Griffin), and this will change the British infrastructure provider landscape (how much is to be seen). The UK is a fascinating market for banking-as-a-service. Due to Brexit, companies need to have a local licence and cannot ‘passport’ a licence from an EU country. Thus, a company that wants to operate in the EU and the UK needs two licences: one for all of the EU and one for the UK.

After Brexit, some wondered if this would affect the UK’s position in the fintech world as the effort required to play in the market grew significantly. But neither international nor local infrastructure providers have shown any sign of disinterest. In fact, more companies are starting. Griffin is just one example.

Griffin’s core products are banking infrastructure services, from bank accounts and payments to safeguarding of customer funds for other regulated providers. Their launch announcement contains two customers from the financial services and insurance industries. Griffin will be able to cater to a broad spectrum of customers, but their website lists specifically proptech and wealth management as focus verticals. It will be interesting to see what other announcements the company will make in the next few months and how they will compete (at least partially) with some of the other big names in the UK’s fintech infrastructure space like Modulr, Weavr, and ClearBank.

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Enfuce launches combo card in Europe

Finnish issuing processor Enfuce has launched a 2-in-1 card that combines credit and debit functionality (Fintech Finance News). E2, the product name of the card, contains two PANs (Primary Account Number), one for each payment method. The cardholder can set their preferred payment method, credit or debit, but can change it at the point of sale.

This card offering seems perfect for Europe. Many consumers prefer debit cards (like myself) for their daily spendings; however, you still want to occasionally use a credit card for more expensive purchases, car rentals and so on. Obviously one card is better than two, so the Enfuce provides value for card holders and reduces friction for companies integrating the offering.

It will be interesting how the offering is going to be received and if other infrastructure providers follow with a similar offering. The product was developed in partnership with Mastercard, and I would expect that such products increase credit usage. If that’s the case, both card schemes will have an interest in increasing the adoption of such card offerings at more infrastructure providers.

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Swedish banking-as-a-service provider launches frontend solution

Swedish Intergiro provides business banking and a banking-as-a-service product offering. Previously, it offered the standard API offering that enabled fintech companies, crpyto providers and non-financial brands to embed banking products directly into their service.

Like a few other providers before, Intergiro is now offering a white-label or no-code frontend for its customers (Finextra). This means that their customers can still use Intergiro’s API and build their own frontend on top, but instead they can also opt for the prebuilt frontend. Often, many features and user experiences are standard in banking, and not every provider wants to reinvent every single step. Additionally, many of these companies have very limited resources available, and the easier a solution is to build, the more likely these companies are considering them.

With this new product, Intergiro is likely hoping to achieve two things. Firstly, they want to increase the number of companies interested in such a solution. Perhaps some companies have not reached out to Intergiro yet because building the frontend themselves was not option. Secondly, and probably even more importantly, Intergiro likely hopes to shorten the sales cycle with their existing clients. It is not uncommon that non-financial brands or even fintech companies start interaction with an infrastructure provider only to realise that they cannot commit the necessary resources at this point in time. A prebuilt frontend might not be the ideal long-term product for all of them; however, it enables each of them to launch an MVP faster, learn from their customers, and get a stronger conviction for building and investing in the product.

As mentioned, there are now a few providers that have a combined banking-as-a-service offering and frontend product, and others who offer pure frontend but partner with various infrastructure providers. Ping me if you want to learn more about this market.

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Build your own Starbucks loyalty machine

Starbucks is probably the most well-known international consumer brand with a financial service product offering. By now, the coffee store chain offers cards as well, but most people know their wallet product offering, where consumers store more than $1.6 trillion. Strictly speaking, the wallet offering is not even embedded finance because it is more of a voucher since customers can only redeem it at Starbucks. But let’s not split hairs.

What is undeniable is that Starbucks built a loyalty machine around its wallet and card offering that has lifted the company to the next level. The benefits that consumers received in return for storing funds were not expensive for Starbucks (free wifi, birthday discount, and more), but the coffee store chain received in return a massive interest-free loan.

So why don’t other retailers build the same? Well, because it’s really hard. That’s why infrastructure provider Ansa has taken on the mission to enable more companies to offer wallets with embedded loyalty features. I had covered them before (link) when they announced their partnership with Compass Coffee in February. But I just came across them again in a restaurant blog (Restaurant Business) and I thought it was a good moment to re-share their offering.

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Insightful links

• The case to become your own bank: Get your own licence or partner? (A16Z)
• How Embedded Finance Creates a Better Patient Experience (MedCityNews)
• Big tech and embedded finance providers: compete or collaborate? (Forbes)

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Job board

• A Liechtenstein-based fintech infrastructure provider is looking for a ‘Head of Legal & Regulatory Compliance’. Hit reply if you want to know more.