Embedded Lending Finds Traction With Consumers and SMBs

Embedded lending promises users convenient, streamlined access to financing for specific expenses from within merchant, business and other platforms.

PYMNTS Intelligence finds that embedded lending isn’t fully living up to the promise yet. Nonetheless, many individuals, microbusinesses and small businesses (MSBs) use it. In fact, using this type of lending in the past correlates with a strong interest in switching providers to access these options.

This interest persists even though many users encounter friction applying for and using these products. What factors keep users coming back?

“The Embedded Lending Opportunity: U.S. Edition,” a PYMNTS Intelligence’s latest report commissioned by Visa, explores the state of play for embedded lending for both the consumer and MSB segments in the U.S. It draws on a 360-degree study of lenders and end users, conducted between Jan. 13 and March 15, 2024.

This report contains crucial information that providers need to leverage embedded lending’s opportunities and mitigate its challenges.

Inside “The Embedded Lending Opportunity: U.S. Edition”

• What embedded lending is and how does it differ from other types of credit
• An exploration of its appeal to U.S. consumers and MSBs
• The role cash flow plays in driving consumer and MSB interest in this type of lending
• Why lenders need to offer compelling products to differentiate themselves in this expanding market
• An overview of frictions consumers and MSBs encounter when applying for and using this type of lending
• How friction rates compare to those of other types of lending
• Demographic information about which consumers and MSBs are willing to switch providers to access these lending options

Consumers and MSBs that have used these products are likely to keep using them. In fact, despite frictions, many say they would switch providers to be able to access them. Download the report to learn more about how providers that address these frictions and concerns stand to profit.

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