May 16, 2024 | 5 min read

How Embedded Finance Improves Customer Loyalty & Acquisition

The keys to happier customersThe keys to happier customersThe keys to happier customers

It’s the burning question every business wants the answer to: How do I improve customer loyalty? Because in today's competitive market—where customer loyalty is on the decline and customer acquisition costs are soaring—brands are being challenged even more to stand out and deliver exceptional value. Traditional strategies are no longer sufficient for retaining customers and maximizing their lifetime value, especially in dynamic sectors such as retail, travel and technology. This is where embedded payment solutions can help—by harnessing customer data to transform how customers interact with your brand.  

Hear from our CEO Simon Khalaf about the importance of exceeding customer expectations for payment experiences.

This is especially important today. According to recent research from Clevertap, acquiring a new customer is now 5x to 25x more expensive than retaining one. At the same time, customer loyalty has declined by 14% from 2022 to 2023, illustrated by the customer loyalty index from Emarsys.  

What is Embedded Finance?

Embedded finance empowers companies outside the banking sector to offer innovative financial services—such as those listed below—directly to their customers from within their own user experiences across retail, travel, technology and more.

  • Seamless digital payments

  • Branded credit and debit cards

  • Customized, dynamic rewards programs

Incorporating these into your digital offerings can enable you to leverage embedded payments that increase customer loyalty, reinforce your brand and extend customer value.

Customer Retention Strategies with Embedded Payments 

Improving customer loyalty with embedded payment solutions isn’t just about collecting points—it's about creating meaningful, personalized interactions. The key is harnessing customer data and coupling it with embedded finance to create dynamic and customized loyalty programs that customers prefer. 

According to research led by FinTech magazine,  52% of 25-34-year-olds said using financial products and services from their favorite brands was their payment option of choice – and more convenient than using a conventional bank.

Reinforce Your Brand at Every Touchpoint  

Enhancing the customer experience through embedded finance solutions enables you to put your brand front and center. Branded cards that integrate with your customer experience ensure that every financial interaction focuses the customer on your brand, rather than on a third-party payments provider. 

In fact, according to that same FinTech Magazine research cited above, 62% of co-branded credit cardholders consider themselves a customer of the brand or store instead of the bank. This continuous exposure helps your brand remain top of mind for your customers (and your customer’s customers)—driving increased interactions and cross-selling opportunities.  

Differentiate the Customer Experience with Cutting-Edge Embedded Payments Technology 

Expanding your brand’s footprint with customers does more than remove barriers to future purchases. Employing modern payments technology helps you:

  • Stay ahead of the competition – by adding customer value through advanced payment solutions tailored to customer needs, such as Apple Cash and Apple Savings

  • Deliver an experience that delights loyal customers — by providing a consistently seamless transaction for them, time and time again

  • Expand beyond your core business model – by readily offering more banking services and capabilities within your app or website

Marqeta’s open API and cloud-native payments platform grant the flexibility to design and launch a personalized card program that reflects the unique needs of your audience. With over 370 APIs—including more than 100 dedicated to credit services—and prebuilt UX/UI templates, we empower you to create an engaging and interactive card experience. Our unique underwriting capabilities also allow you to use alternative data for customer history, expanding access to credit for a broader customer base.

Case study: See how Klarna gave its consumers a better online shopping experience by offering simple and safe solutions that empowered consumers with more financial freedom, control and the flexibility to purchase what they want—all by partnering with Marqeta. Read more here.

Improve Customer Acquisition Strategies with Instant Scalability and Flexibility  

Imagine if you could offer rewards and incentives in real-time–based on current customer data or market conditions–such as instantly issuing virtual cards, making decisions on credit applications and adjusting your offerings either through an intuitive dashboard or directly via APIs. Marqeta’s architecture delivers financial tools that are as agile as the rest of your business, accelerating product development and democratizing access to sophisticated card-issuing technology, making it available to businesses of all sizes.  

Benefits of Embedded Finance to Drive Customer Loyalty and Acquisition

The benefits of embedded finance for customer acquisition are clear: 27% of young adults in the U.S. express dissatisfaction with their current credit card features, and more than half of those aged 26-34 are likely to apply for a new card within the next 12 months, according to research we published in our 2023 State of Credit Report. A branded credit card backed by compelling rewards offers an opening into this critical demographic, 82% of whom told us that better rewards or incentives would get them to switch to a different top-of-wallet card.

With a partner like Marqeta, you can create a truly differentiated experience designed to attract and acquire new customers, setting your brand apart in a crowded market. Get in touch with our sales team today to get started. What Can Embedded Finance Do for You? 

Embedded finance presents a transformative opportunity for brands to differentiate themselves in a competitive marketplace. By integrating financial services such as branded cards and dynamic rewards programs directly into the user experience, you can increase new customer acquisition, enhance customer loyalty, strengthen brand engagement and facilitate seamless transactions. Utilizing Marqeta’s cutting-edge technologies and leveraging data-driven insights, you can create personalized rewards and meaningful interactions that not only meet customer needs but also exceed their evolving expectations. 

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