Why Vopy?

How does embedded finance work in practise?

Embedded finance is used by:

• non-financial corporations (e.g. consumer brands, retailers, telcos, large techs and software companies, car manufacturers, airlines, insurance providers etc)
• financial institutions (e.g. banks, fintech, financial services providers, remittance companies and more)

This is how a Telco becomes a loan provider and an airline becomes a neobank. McKinsey emphasizes the relevance of embedded financial services in March, 2021:

“Today, companies of all types and levels of maturity—including retailers, telcos, big techs and software companies, car manufacturers, insurance providers, and logistics firms —are considering and preparing to launch embedded financial services to serve business and consumer segments.”

This means: Today, the handling of financial products and services no longer needs to be done through banks. It is not necessary to have a full banking license to provide financial services (such as issuing payment cards, loans or digital wallets). Businesses do not need to build their own bank to gain control of financial services and increase margins.

Setting up an internal bank, digital wallet or payment scheme is a process that can be very complicated, costly and time consuming. Embedded finance represents the best of all worlds: It is the middle way to give companies control over financial products and services and increase margins, without having to make significant investments and operational risks.

For example:

• Telcos offer loans directly to their customers.
• Banks are digitizing their services by adding digital wallets and cards to the offer; FinTechs enhancing their infrastructure to enable scaling and rollout of their services.
• Car manufacturers offer credit lines and leasing products to finance their cars.
• Airlines offer loans for financing a vacation.
• Clothes retailers offer consumer financing through buy-now-pay-later schemes.
• Remittance companies offer shared family accounts to their users, making international money transfer cheaper and faster.
• IT companies that add plug & play digital wallets to the offer or services to niched target groups (e.g. parents who give pocket money to their children);
• SMEs offer payment cards to millennials and students.
• Ride-sharing company that enables instant payment of the drivers via debit cards.

The uses and possibilities are endless. Our team at Vopy can help you in understand the dynamics and opportunities that lie within the field of embedded finance and how embedded finance can be used in your specific context.

Vopy benefits businesses with:

• Reduced customer churn
• New revenue streams
• Expanded customer offering
• Increased customer lifetime value
• Boosted customer loyalty
• And more

While the specific benefits to your business will naturally depend on which Vopy products and services you choose to incorporate into your offering, all benefits are ultimately designed to:

• Increase customer value, satisfaction and loyalty (business continuity)
• Increase customer retention (i.e. reduce customer churn)
• Modernize an existing offering (better UX and optimized processes)
• Scale and increase market share (take advantage of our licenses)
• Open new revenue streams (by offering new products and services)
• Cut costs (by tech optimization)

International money transfer

European migration communities from developing countries in Asia, Africa, and South America, experiences pains in remitting money home to their relatives. The banks and the incumbent money transfer offices are expensive for the migration community and the services are neither instant nor transparent. According to the international organization of mobile operators (GSMA), more than 800 million of the worlds' 1 billion mobile wallets are in emerging markets like Africa and South Asia.

Vopy is working with several mobile wallet partners with a strong brand recognition and trust in their home countries. Vopy has offered them a white label “Remit Home” wallet in Europe, directly connected with their wallets in the receiver markets. This means a wallet provider with up to 100 million users in the receiving market can provide wallet-to-wallet cross boarder remittance from Europe - seamlessly and sending in a spilt of a second including transparent pricing for the sender. Vopy will provide the white label “Remit Home” wallet across more than 20 countries in Europe.

Neobank

One of our clients is a UK-based venture which will offer ethical and smart alternatives for their customers to manage money. The target segment is consumers who from regulatory initiated lawsuits have received claims from non-responsible consumer lenders.

The customer can open their account in a minute and the cash advancements from the claims will be instantly transferred into the account. The neobank will help customers to improve their credit score by incentivizing savings and responsible consumer lending.

The neobank will also, through its marketplace services, help the customers to choose the best provider of mortgages and insurances to improve the family´s financial health.