NatWest Boxed reveals first client: Embedded Finance for 14m British consumers

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Hi embedded finance friend

I am excited to share that this edition is the first to be sponsored by an embedded finance company (see below). Some of you might remember that I mentioned at the end of last year that I would start to include sponsors ‘soon’. This took a bit longer than expected, but it looks like the next 1.5 months will be covered by three different sponsors (maybe one or two editions in between without a sponsor).

I will take this as a learning phase and decide afterwards how to continue. To be completely transparent, I aim to monetise my newsletter and podcast activities to invest more time into them (aka, not writing the newsletter on the weekend or late at night). But I am also doing this cautiously since being independent and neutral is extremely important. With that in mind, if you have any thoughts or feedback, you know where to find me 🙂

This edition covers

• Embedded lending for car purchases in Saudi Arabia (Podcast)

• The British automobile association AA partners with NatWest Boxed

• Indonesian e-commerce provider Bukalapak shuts down banking offering

• Embedded finance short stories

And now let’s dive in 👇

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Embedded lending for car purchases in Saudi Arabia (Podcast)

In the newest podcast edition, I spoke with Ali Tabbalat about the opportunity of embedded financing for car purchases in Saudi Arabia. Ali is the founder of EmFlex, which partners with local banks to offer financing at the point of need.

Ali is an experienced fintech entrepreneur with previous startups in early wage access and at the intersection of med and fintech. In our conversation, we cover

• Ali's entrepreneurial journey

• Why Saudi Arabia is an emerging Fintech hub

• How EmFlex is partnering with banks and not competing with them

• How they plan to expand EmFlex’s product offering

The podcast episode is on Spotify, Apple Podcasts, and YouTube.

The British automobile association AA partners with NatWest Boxed

What happened: NatWest Boxed announced the British Automobile Association (AA) as its first customer. AA offers car owners a breakdown protection service and other car-related services. Through its partnership with NatWest Boxed, the joint venture of British bank NatWest and Polish Vodeno Group, AA will offer its members savings and lending products (AA announcement).

My comment: The industry has heard many rumours that NatWest Boxed would announce its first customer ‘soon’. From what I have heard, many had their bets on a retailer being NatWest Boxed’s first customer, but this did not turn out to be true (at least for the first customer). That NatWest Boxed’s first customer is in the size of an AA had to be expected since the banking-as-a-service provider focuses on enterprise-sized customers and not the startup longtail. AA has over 14 million members in the UK and plans to launch a savings account (end of March 2025) and personal loan (“followed closely”, aka later this year).

The announcement mentions a few details about the financial products (“FSCS-protected savings account” and “personal loan with market-leading rates”), but it’s not clear to me how AA plans to integrate its financial products into the existing customer journey. To be fair, the first partnership announcement might not need to cover this.

You will hopefully not be surprised when I say AA might have an excellent brand for an embedded finance offering, but what’s more important is how they embed it. For example, embedding the personal loan into the customer journey when the car owner needs it (e.g. after the car breaks down and unexpected expenses arise) is a great way. According to the announcement, personal loans can be dispersed within minutes, which is also an extremely helpful feature. However, I am wondering how the savings account will be integrated. At this point, I assume it’s a pure brand play, where AA expects customers to move their savings to them because they know and like the brand (and perhaps better rates). And yes, this can work out. You can argue that the German version of AA, ADAC, is doing precisely this with their co-branded credit card: a good financial product, but it lacks the embedded finance magic (What I describe as the 1+1=3 customer value in my slide deck).

But that’s just me thinking out loud. We will know the answer to these questions when the product is available. Luckily, the AA has teamed up with the smart folks at NatWest Boxed, so I am confident they have good answers to all these questions. Congrats to both teams on the announcement, and I'm looking forward to seeing the live product.

Indonesian e-commerce provider Bukalapak shuts down banking offering

What happened: The Indonesian e-commerce provider Bukalapak made news in the embedded finance world by partnering with Standard Chartered and launching a financial services unit called BukaTabungan in 2021 (Bukalapak blog post from 2021). As subscriber Shaul David discovered, Standard Chartered has announced the shutdown of the Bukalapak financial offering (Shaul’s LinkedIn post). The BukaTabungan website is also offline, and an Instagram post seems to be the only online statement from the e-commerce giant. 

What this means: Both companies are extremely quiet about the shutdown of this partnership. The only information that gave any potential reason for this decision mentions internal friction between Bukalapak and Standard Chartered (KB Valbury Sekuritas). From what I gathered, the product offering and size of the business never got big, and we can only speculate if this caused friction between the two companies or if friction was the reason for the limited success in the first place.

It is noteworthy that Bukalapak recently announced that it would stop selling physical products and purely focus on digital products (physical products made up ~4% of the total volume; Jakarta Daily). At the same time, Bukalapak plans to focus more on mobile credit, utility bill payments, and government transactions. So perhaps the end of the Standard Chartered partnership does not mean Bukalapak will leave the embedded finance world altogether; instead, it might focus on other financial products and perhaps also different fintech partnerships.

PS: Thanks again, Shaul, for sharing this news with me. Feel free to ping me if you see relevant embedded finance stories. If I cover the news, I’ll tag you.

Embedded finance short stories

• US infrastructure provider Galileo brings co-brand debit rewards to the hospitality sector (PYMNTS)

• Eurowag partners with Visa and Nets to launch cards for fleet management (The Paypers).

• Adyen partners with Eats365 to improve payments for F&B businesses (The Paypers).

• Uber introduces a dynamic currency conversion feature allowing riders to pay in their home currency for a 1.5% surcharge, an easy way for Uber to increase payment-related earnings (Forbes).

• Shopify expands the partnership with Affirm to Canada and beyond (The Paypers).

• Another great piece by Alex Johnson in which he argues that the future of small business lending is embedded (Fintech Takes).