Grow your Business

Finance your Business

Run your Business

Customer Stories

Tools and Resources

Partner Stories

 marks the evolution from traditional, standalone financial services to their integration within platforms and services that businesses and merchants use daily. Initially, financial solutions were broad, one-size-fits-all tools. However, as technology advanced, these solutions began to specialize, catering to the unique needs of specific industries or verticals. This transition from horizontal to vertical-specific tools has significantly enhanced the customer experience by providing more tailored, relevant, and efficient tools. It’s also made embedded financing much more powerful.

Embedded Finance and Its Impact on Small Businesses

For small businesses, embedded finance has been a game changer. By 

integrating embedded capital solutions directly into business platforms

, companies gain direct access to capital, without ever leaving their operational ecosystem. This 

 empowers businesses to focus more on growth and less on funding logistics.

For example, think about a coffee shop that, two decades ago, would manage transactions, payroll, and accounting through cumbersome, manual processes. Today, that same coffee shop can leverage specialized tools that handle all of this within a single platform. Now, with embedded finance, they can easily access working capital from within that same platform, with no need to compile financial statements and go to the bank.

The concept of unified commerce is emerging, where all facets of financial services—payments, banking, access to capital—are seamlessly integrated into a single platform. This unified approach makes financial management more intuitive and less time-consuming for business owners, who are often time-strapped and wearing multiple hats.

For small businesses, this could mean having a single dashboard that manages everything from inventory purchases to employee payroll, with embedded financial services like access to capital or payment processing. This level of integration not only streamlines operations but also provides businesses with a holistic view of their financial health, enabling better decision-making and fostering growth.

The evolution of embedded finance represents a significant leap forward in the way businesses interact with financial services. By breaking down the barriers between financial and operational platforms, embedded finance offers a more integrated, efficient, and accessible financial ecosystem for businesses of all sizes.

 continue to lead the way, driving innovations that promise to further transform the business landscape. In today’s market, staying ahead means embracing the integrated, seamless, and efficient solutions embedded capital provides.

This blog was inspired by the conversation between 

Payments, banking, and access to capital are coming together on unified platforms.

Payments, banking, and access to capital are coming together on unified platforms. See how embedded finance makes this possible in a whole new way. 

The Evolution of Embedded Finance Towards Unified Commerce

The Evolution of Embedded Finance: A Leap Towards Unified Commerce

Independent Software Vendors (ISVs) are at the forefront of technological innovation, crafting solutions that not only meet but anticipate the needs of businesses across industries. As these ISVs seek to provide more value and deepen user engagement, embedded finance emerges as a key area of opportunity. 

Integrating financial services—particularly access to working capital

—into software platforms can transform user experiences, open new revenue streams, and ensure platform stickiness.

 refers to integrating financial services within non-financial platforms. For ISVs, this means offering users access to financial products—such as capital, lending, payment processing, and insurance—directly within their software. This integration creates a seamless experience for users, who can access financial tools without leaving the platform, enhancing efficiency and user satisfaction.

Partnering with Embedded Capital Providers

For ISVs interested in integrating  a working capital model for embedded finance, various partnership models exist. These range from referral agreements with financial institutions to deeper tech-enabled collaborations involving API integrations. Pipe offers flexible e

 models that allow ISVs to choose the level of integration that best suits their platform and user needs. Through these partnerships, ISVs can provide embedded capital solutions that appear native to their platforms, enhancing the user experience without the need to develop complex financial services in-house.

Embedded finance within ISV platforms can be transformative. For example, business management software integrating embedded capital can enable its users to apply for and manage a loan or advance directly through the software, using data already within the system to streamline the application process. This not only simplifies access to capital for businesses but also strengthens the software's role as an indispensable tool for business operations.

Despite the clear benefits, ISVs may have concerns about implementing embedded finance, from technical integration challenges to maintaining user trust. Collaborating with established fintech partners like Pipe can alleviate these concerns. Pipe's experience and technology enable smooth integration of financial services, ensuring compliance, data security, and a seamless user experience.

For ISVs looking to future-proof their platforms and drive growth, embedding financial services offer a compelling opportunity. By integrating working capital and other financial solutions, ISVs can enhance their platform's value, foster deeper user engagement, and tap into new revenue streams. 

Pipe’s embedded capital offering isn’t a loan; it’s an advance based on a company’s revenue. This allows a wide range of businesses to access capital quickly, with an approval process that’s much faster than typical for lenders. By embedding Pipe Capital into your software platform, you give your merchants easy access to funding, including pre-qualified offers based on first-party transaction data.

Interested to learn more? Watch the full conversation between 

Find out how ISVs can gain a strategic advantage by offering embedded financing and how simple it can be to implement

ISVs and the Future of Embedded Finance

Innovating at the Intersection: ISVs and the Future of Embedded Finance

Payment Facilitators (Payfacs) are constantly seeking innovative ways to enhance their offerings and add value for their merchants. Embedding financing options, like 

seamless integration of financial services

 that can increase merchant success and the growth of Payfacs themselves.

Embedded lending is the integration of lending services directly into the platforms that businesses already use for their daily operations. This approach eliminates the need for businesses to seek external financing solutions, providing them with fast, convenient access to capital. For Payfacs, embedded lending represents an opportunity to deepen relationships with merchants by addressing one of their most critical needs: access to funding.

Integrating an embedded capital product requires a strategic approach. Payfacs can look to 

, like those used by Pipe, which range from simple referrals to deep API integrations. These models provide flexibility in how Payfacs can offer services, allowing for a tailored approach that meets the needs of both them and their merchants.

While the benefits are clear, Payfacs still need to consider challenges such as regulatory compliance and integration complexities. Partnering with experienced fintech companies like Pipe can mitigate these challenges. Pipe's partnership-first approach ensures that Payfacs can implement embedded capital solutions that are not only compliant but also seamlessly integrated into their existing platforms.

Pipe’s embedded capital offering isn’t a loan, it’s an advance based on a company’s revenue. This allows a wide range of businesses to access capital quickly, with an approval process that’s much faster than typical for traditional lenders. By embedding Pipe Capital into your software platform, you give your merchants easy access to funding, including pre-qualified offers based on first-party transaction data.

 offers a pathway for Payfacs to significantly enhance their value proposition, deepen merchant relationships, and drive mutual growth. By addressing the critical need for access to capital, Payfacs can empower their merchants to achieve their growth objectives, resulting in increased processing volumes and revenue. As the digital payment landscape continues to evolve, embedded capital stands out as a strategic advantage for Payfacs willing to embrace innovation and partnership opportunities.

Here's how embedded lending and other embedded capital offerings can help Payfacs drive growth.

Here's how embedded lending and other embedded capital offerings can help Payfacs drive growth and become even more essential to the merchants they serve.

Empowering Growth: How Payfacs Can Leverage Embedded Lending

This article was originally published on 

For more than a decade, I’ve held key financial positions with Mailchimp, Visa, Intuit, and Pipe, with front-row seats to the inner workings of small and mid-sized businesses. During that time, not a day has gone by that I wasn’t immersed in data. But the way we leverage data is changing, and with it, hopefully, the way you look at your own business data. 

There’s a common misconception among companies of all sizes that CFOs are focused entirely on financial statements and 

be heads-down looking at that bottom line. But in today’s world, there’s more than one bottom line and more than one way to get there. We’re all looking for an edge—either a way to get ahead of the competition or a way to improve 

 performance—and I believe comprehensive performance data is the key to finding that edge.

We live in a complex world, and the complexity is only going to keep accelerating. Where CFOs once really 

limited to things like financial statements for insights, we’re now connected to more data and potential to measure performance than ever before. We have data measuring every part of the customer experience, from acquisition to engagement, performance, and attrition, all at our fingertips. Not only that, but we also have smarter tools to help us analyze that data with the help of AI and machine learning. 

All of this leads to two major shifts for the modern CFO. First, inputs from so many different places can revolutionize the way we make decisions. Instead of waiting for data that is backward-looking, we have the potential to invest in near real-time information. To make the most of all this data, we 

stay connected with the tools and know-how to analyze it. Anything else is just asking to be left behind by the competition. 

Secondly, CFOs must become experts in more than just the dollar signs and contribute to the company more broadly. In a complex market where small businesses and large corporations manage across multiple sales channels, compete for talent, and make financial decisions to grow their business, the world is more centered around data than ever. If you can help drive smarter decisions across functions, you’ll add value our finance forefathers and mothers only dreamed of.

Most companies I talk to ask about the tools and processes to make data-driven decisions. Here are five steps I suggest to them, and to you, to get a handle on your data and make the most of it for your company: 

Gone are the days of making financially or analytically inclined employees among your last hires. It bears repeating that companies that fail to prioritize data will be left behind. You need to reflect that value in your hiring decisions and the tools you invest in. 

Hire data-savvy people early on and equip them with the technology to capture, see, and analyze data in the best way. This will result in high-quality, usable data that will move your company forward and lead to much better decision-making.

 data out there, knowing where to focus is important. Make strategic choices about the metrics sacred to your sales and marketing funnel, customer satisfaction, and profitability. Once you know what to track, you can align your team around these numbers so everyone is on the same page. There’s nothing worse than monitoring metrics that don’t align with your goals or having your teams pour effort and time into work that moves the wrong needle.

We all know that setting goals only helps if you track your progress. In the same way, monitoring key metrics in your data is only useful if you review them regularly. Determine the best frequency for these reviews and who needs to be involved and stick to that schedule. Remember, just because you have data does not mean you have to review it with your team every day. Give your data some time to bake so that your reviews hold real meaning.

With the right people on your team using the right tools, you can be confident that your data is accurate. This sets you free from doubt and lets you foster healthy debate around what to do about the data, not the data itself. This is an easy point to gloss over, but it’s key to the power of good data. With a shared understanding of what the numbers really measure, you can focus your time and attention on building strategies and taking action.  

Commit to action and track the progress 

All of these things move us toward an ultimate goal: a culture that embraces the discussion and evolution of strategy. All this data makes it possible to see shifts beneath the surface and, in some cases, even predict them before they arrive. Meaningful progress in our companies comes from embracing those shifts and taking committed action as a result. That’s how the data-driven CFO becomes a driver of results.

As CFOs, we sit in the perfect position to harness the power of data. We’re well-equipped to make analytical decisions based on hard numbers. Now we need to direct that analytical thinking to more than just the financials. With accurate, reliable data, we can contribute to the company in new and exciting ways that have an outsized impact on the bottom line and beyond. 

Discover how embedded lending can help Payfacs and ISVs grow faster and how alternatives like Pipe can help streamline the process

Unlocking Business Growth with Embedded Lending

How to unlock financial data as a growth tool, no matter your business size

Embedded finance has emerged as a critical component in today's fintech ecosystem, offering an agile, seamless, and consumer-centric way to deliver financial services. This integration transforms many platforms, from online marketplaces to mobile apps, into hubs for financial transactions. While the opportunities are promising, the security of these financial technologies remains a paramount concern. In this post, we will explore the two cornerstone technologies—APIs and iFrames—that enable embedded finance and discuss best practices for securing them.

 refers to the seamless integration of financial services into platforms and applications outside of the traditional financial sector. This integration is facilitated primarily through two technologies: Application Programming Interfaces (APIs) and Inline Frames (iFrames).

APIs act as the intermediary that allows two different software applications to communicate and interact. They enable third-party services to access specific functionalities or data of a primary service provider. For example, APIs are crucial for integrating payment gateways, investment platforms, or insurance services into embedded finance ecosystems.

 allow the embedding of an HTML document within another HTML document. This technology enables the integration of various financial services—like secure payment forms or loan applications—directly into a website. Despite its occasionally negative reputation for being associated with ads and phishing schemes, when deployed correctly, iFrames can serve as a secure and effective tool for integrating complex financial functionalities.

Enforcing SSL (Secure Socket Layer) encryption and HTTPS (HyperText Transfer Protocol Secure) protocols for all API calls is the foundational step in securing API communications. This encryption ensures that any data transmitted over the internet is encrypted, rendering it unintelligible to unauthorized third parties. By doing so, organizations can substantially mitigate the risks associated with Man-In-The-Middle attacks, where an attacker could intercept, read, and potentially modify the data during transmission.

Rate limiting restricts the number of API calls from a particular IP address within a given time frame. This is crucial for protecting against Denial-of-Service (DoS) and Distributed Denial-of-Service (DDoS) attacks, where attackers attempt to flood the system with traffic to make it unresponsive. By implementing rate limiting, organizations can ensure that legitimate users still have access to services even when an attack is taking place, thereby preserving functionality and user experience.

 (ACLs) provide a structured approach to managing permissions. Granular ACLs can be set up to define precisely which users or systems have access to specific types of data or functionalities. This is particularly important for minimizing the potential damage that can be done if an API key is compromised. By adhering to the principle of "least privilege," wherein systems and users are given the minimum levels of access—or permissions—they need to perform their functions, organizations can significantly reduce security risks.

As APIs evolve and new features are added, it's crucial to regularly perform penetration testing. These tests simulate cyber-attacks to find vulnerabilities before malicious hackers can exploit them. Continuous testing, coupled with API hardening strategies such as input validation and output encoding, ensures that APIs remain secure even as they scale and evolve.

 attribute allows website owners to impose restrictions on iFrames, thus isolating them from other elements on the page. This isolation ensures that even if the iFrame contains malicious code, it cannot easily impact the main website or its visitors. Owners can customize the level of access the iFrame has to various browser functions, such as running scripts, submitting forms, or accessing the DOM, providing an additional layer of security.

Limiting Which Websites Can Render an iFrame

To prevent Clickjacking attacks—where attackers trick users into clicking hidden elements within an iFrame—it's essential to control which websites can render your iFrames. Using HTTP headers like 

 can limit the rendering to trusted domains or even restrict it to the same origin.

Validation and sanitization of user input are vital for preventing Cross-Site Scripting (XSS) attacks, where attackers inject malicious scripts through input fields. Utilizing modern browser features like the 

 interface allows for secure two-way communication between the iFrame and the parent document.

Moreover, sanitization techniques should be applied to strip out or neutralize characters that have special meanings in HTML, JavaScript, or SQL, thereby reducing the risk of code injection attacks.

The integration of financial services into various platforms through embedded finance offers unparalleled convenience and functionality. However, the security of these integrations cannot be compromised. By understanding the unique security concerns related to APIs and iFrames, organizations can implement effective strategies to protect against vulnerabilities and potential attacks.

Security isn’t just a feature —it’s a core foundational element of embedded finance. Every strategic decision must be calibrated with the safety and privacy of a customer’s data as a top priority.

 Type II attestation is a significant milestone that demonstrates a commitment to data protection and maintaining customer trust. Like the penetration testing mentioned earlier, SOC2 attestation invites external testing and scrutiny of a company’s controls and safety measures and serves as concrete evidence that it is meeting industry-leading standards in safeguarding customer data and maintaining a secure operational environment.

As embedded finance continues to evolve, keeping security at the forefront will be key to fostering trust and facilitating seamless user experiences. With robust security measures in place, embedded finance can indeed become a secure and invaluable asset in the evolving digital landscape.

Key points to keep in mind to ensure your embedded finance offering is secure and your users' data is protected.

Key points to keep in mind to ensure your embedded finance offering is secure and your users' data is protected against fraud and unauthorized access. 

How to optimize security in embedded finance

Personalization has become a cornerstone in shaping products and services today. As consumers, we’ve grown accustomed to customized offerings, an expectation that's rapidly expanding into the B2B sector. Within this evolving market, the payments industry has a notable advantage: access to a vast amount of first-party data gives companies accepting payments a unique edge. This sets the stage for verticalized Independent Software Vendors (ISVs) and payment facilitators (PayFacs) to develop finance solutions tailored to specific industry requirements and even bespoke offers for a company’s unique situation.

Companies that facilitate and handle payments are sitting on a goldmine: their 

. This wealth of data holds more than just transactional details; it reveals patterns, preferences, financial health, seasonality trends, and behaviors of the customers and merchants involved.

In the broader digital landscape, the prominence of 

 is waning due to increasing privacy concerns and stringent regulations. These changes have diminished the reliability and depth of insights from third-party data sources, making first-party data even more invaluable.

First-party transaction data offers several distinct advantages:

Direct Insight: Unlike data sourced from third parties, which may be diluted or generic, first-party data is direct and unfiltered. This means a clearer picture of customer preferences and behaviors without the noise of external sources.

Timeliness: Real-time transaction data allows companies to swiftly respond to emerging trends, customer needs, or market shifts, providing agility that's critical in the fast-paced world of finance.

Relevance: By analyzing transactional trends, payment companies can discern not only what products or services a customer prefers but also when and how they prefer them. This granular level of detail allows for the creation of highly relevant product offerings.

Privacy & Compliance: Using first-party data reduces reliance on external data sources, which often come with a host of privacy concerns and regulatory implications. Companies can have better control over data handling, ensuring both security and compliance.

Armed with these insights from first-party data, payment companies are in a prime position to craft personalized financial products and services. These tailored offerings, rooted in real transactional behaviors, can resonate more deeply with customers, leading to increased loyalty and engagement. The potential extends beyond just offering products; it opens doors to proactive solutions, anticipating customer needs even before they are explicitly expressed.

Unique positioning of verticalized ISVs and PayFacs

Verticalized ISVs and PayFacs stand distinctively in the payments ecosystem, owing to their deep industry understanding and access to transactional data. This combination allows them to design highly tailored financial solutions. More than just addressing current needs, their keen grasp of industry-specific challenges positions them to anticipate and create solutions for future demands. Instead of merely adapting, they're often a step ahead, aligning their offerings closely with the evolving needs of the industries they serve, thus becoming strategic partners rather than just service providers.

Transactional data isn't just about numbers—it's a window into a merchant's daily operations. By analyzing this data, companies can 

 on a daily basis, ensuring timely financial support. Moreover, pre-qualifying merchants based on this data can lead to more effective marketing campaigns. For instance, offering funding solutions at the right time or providing merchants with indicative funding limits can result in improved customer engagement and loyalty.

Beyond immediate financial offerings, transactional data provides a roadmap for long-term relationship building with merchants. By continuously monitoring and understanding spending patterns, seasonality, and other financial behaviors, payment companies can predict potential business challenges and opportunities for merchants. This proactive approach enables companies to tailor their financial products, not only addressing immediate needs but also future-proofing merchants and building those future needs into their product roadmap. In doing so, they position themselves as invaluable partners, deeply embedded in the growth journey of their merchants.

With the recommendation engine market poised to reach $54 billion by 2030, the potential for ISVs and PayFacs is significant. These engines, powered by first-party data, can push real-time product suggestions that resonate with the merchant's immediate needs. Whether it's a tailored financial product or a unique service offering, timely and relevant recommendations can drive growth and customer satisfaction.

A recommendation engine, tapping into this financial data, could proactively suggest a tailored financing solution to help manage inventory or expand operations. Conversely, during slower periods, it might propose 

. By constantly analyzing transaction trends, payment behaviors, and historical financial data, these engines can pinpoint the exact financial product a merchant might require, even before the merchant realizes the need. This level of anticipatory service, backed by powerful algorithms, ensures that financial solutions are not only relevant but also delivered at the optimal moment, maximizing impact and fostering deeper merchant trust.

Beyond immediate financial solutions, ISVs and PayFacs have the potential to introduce credit and savings programs that genuinely matter to merchants. Relevant reward schemes, for instance, can motivate merchants to engage more with a platform. On the savings front, offering multiple high-yield savings account options allows merchants to diversify their financial goals, from short-term objectives to long-term financial security. Moreover, given the unpredictable nature of business incomes, offering investment platforms with varying degrees of liquidity and returns can help merchants optimize their surplus cash.

Maximizing merchant loyalty through tailored rewards programs

Harnessing the depth of first-party transaction data, PayFacs and ISVs are uniquely positioned to create bespoke loyalty and rewards programs for their merchants. One such approach is the introduction of Tiered Benefits. For example, merchants who achieve specific transaction milestones could enjoy perks such as reduced fees, access to premium customer support, or even the chance to engage in exclusive partnerships. 

Additionally, to foster a sense of community and expand their network, PayFacs and ISVs can roll out Referral Programs. In this model, merchants are rewarded for bringing new businesses on board. These rewards could manifest as cashback incentives or special discounts on transaction rates. In essence, by tapping into personalized data-driven strategies, PayFacs and ISVs can ensure that their reward systems resonate more deeply with their merchant partners, driving both loyalty and growth.

The payments industry is at an inflection point, with the potential to reshape its future through personalization. With the right mix of data, technology, and industry expertise, verticalized ISVs and PayFacs can craft financial solutions that not only meet the present needs of the industry but also anticipate its future demands. As the lines between B2C and B2B continue to blur, personalization stands as a key differentiator, promising growth, loyalty, and long-term success.

Pipe CPTO Namrata Ganatra shares how Payfacs and ISVs can leverage personalization and first-party data to improve merchant experience.

Pipe CPTO Namrata Ganatra shares how payment processors and ISVs can leverage personalization and first-party data to improve merchant experience and metrics

Technology

The Evolution of Embedded Finance: A Leap Towards Unified Commerce

Innovating at the Intersection: ISVs and the Future of Embedded Finance

Empowering Growth: How Payfacs Can Leverage Embedded Lending

How to unlock financial data as a growth tool, no matter your business size

How to optimize security in embedded finance

How the Payments Industry Can Leverage Personalization to Grow GPV and Loyalty

Pipe Blog

SubscribeGet the best of Pipe's Blog

Technology

Innovating at the Intersection: ISVs and the Future of Embedded Finance

Empowering Growth: How Payfacs Can Leverage Embedded Lending

How to unlock financial data as a growth tool, no matter your business size

How to optimize security in embedded finance

How the Payments Industry Can Leverage Personalization to Grow GPV and Loyalty

.css-13o7eu2{display:block;}Pipe Blog

Subscribe.css-hjy75e{display:block;margin-top:var(--chakra-space-2);color:var(--chakra-colors-StaticContentPlaceholder);}Get the best of Pipe's Blog

Pipe Blog

SubscribeGet the best of Pipe's Blog