- The service: Issue virtual or physical debit cards that your end-clients can use to make payments
- Hubuc’s embedded banking solution: Design your own cards and Hubuc takes care of the rest
- Monetisation options: Allows to capture a percentage of your client’s card transactions (interchange fee %)
- Benchmarks: Apple, Shopify, Grab
Offering own-labelled payment cards is well known as a simple loyalty scheme from big established consumer brands, such as credit cards from IKEA or Mercedes-Benz. Recently, global technology brands, such as Apple, Uber or Amazon have launched their own card offerings, often to complement their existing core services. The next step in this evolution is to truly embed card offerings into non-banking core services with integrated features (e.g. push notifications, expense management, automations) and to make the generated data useful for the end-client (e.g. payment analytics).
The benefit of offering own cards goes way beyond loyalty features. As customers use the card, you get a real-time payments data flow that you can connect and combine with your own data, which creates new unique sets of proprietary data. This can be utilised for better risk scoring or simply to improve your own core offering, e.g. by offering real-time push notifications, attaching receipts digitally, building custom spend dashboards, streamlining internal finance and accounting operations, etc. By embedding cards as a component of the overall value proposition, clients don’t need to deal with a separate provider for their payments related needs. Thus, the use cases for creating customer value by combining non-banking services with card payments, both in B2B and B2C, are vast and just being explored.
Offering own cards to end-clients also boosts customer lifetime value, as it opens up a unique revenue stream. By issuing cards, companies can capture a percentage on each single transaction its clients make. This is called the interchange fee.
In the past, launching own card offerings was only available for big name brands who had the financial and technological capabilities. Hubuc now allows any brand, especially start-ups and SMEs, to easily integrate payment cards into their offering.
- The service: an IBAN account for your own end clients to receive, send and store money
- Hubuc’s embedded banking solution: An integration that allows users to open and access a bank account directly from within your own application and make payments worldwide via SEPA or SWIFT
- Monetisation options: Extra fees
- Benchmarks: Shopify, Intuit, Uber, Google, Grab
Integrating own-labelled bank accounts into your own services might sound like a big step. However, in many use cases, it offers the opportunity to make your core service more sticky, gather valuable additional data and create a better user experience. In business software, lifestyle apps, accounting tools, marketplaces, e-commerce, or franchise businesses, users often need a separate bank account to keep track of their money. Dealing with a separate banking provider and logging into the bank account each time creates friction. Thus, user journeys can be streamlined by seamlessly integrating bank accounts as a part of the core offering.
When talking about embedded finance, Shopify sticks out as a recent benchmark. Instead of applying for a separate business bank account and card, Shopify offers sellers now the option to get access to these products directly via Shopify Balance. Another example is the accounting SaaS provider Intuit, who launched a new embedded banking service called QuickBooks Cash, which is a free business bank account that offers one percent interest when paired with the QuickBooks accounting software.
Beyond that, similarly to embedding payments, combining the transaction data of your embedded bank account with the data of your non-banking core service creates additional innovation opportunities, such as custom analytics, automated payment triggers or improved risk scoring.
Aggregation and payments
- The service: Connecting to third party bank accounts and initiating payments
- Hubuc’s embedded banking solution: Connect to existing bank accounts of your customers within your own application and initiate payments via Hubuc’s API
- Monetisation options: Extra fees
- Benchmarks: Xero, Finanzguru, Mint
The European Second Payment Services Directive (PSD2) makes it possible for licensed third parties to access a user’s bank accounts and initiate payments on their behalf. By using Hubuc, non-banks don’t even need to apply for their own license, as Hubuc’s API allows to access transaction data and initiate payments in real-time through your own interface.
This in an interesting “above banking” opportunity that allows companies to build their own applications on top a user’s banking data. In addition, bank transfers based on PSD2 are cheaper than card payments, which might be an innovative alternative for businesses that involve frequent user payments.
The benefits for non-financial brands to integrate banking services
Apple card. Uber driver accounts. Amazon business loans. Shopify SME debit cards. Grab micro-investments and loans. There’s an increasing number of brands outside of the traditional finance sector that have started to branch out into banking-like services. They are leveraging existing client relationships, distribution power and established brand equity to open up new revenue lines and improve user experiences. With Hubuc, smaller companies and SMEs now get the opportunity to tap into the advantages of embedded banking.