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Embedded Finance: The Time Is NowThe Time Is Now
Embedded Finance:

WITH JOHN TUCKER WITH JOHN TUCKER

Aligning with the new age of payments

By John Tucker added solution to their standard business banking and
TreviPay financing solutions in order to create an integrated
package for merchants.
Editor's note: Unanticipated professional developments necessitated
John Tucker's resignation as Street Smarts author. We wish to thank It's difficult to switch payment providers to save on rates
SM
him for his contributions and will welcome his future submissions as or get better customer service when your line of credit,
business loans and business bank accounts are tied to
time allows. In the next issue, we will introduce a long-time friend of the company that's providing your merchant processing.
The Green Sheet Inc. who has stepped in to replace him going forward. Thus, it looks like big banks will continue to monopolize
Stay tuned.
the market with more acquisitions and more market share.
ccording to CBInsights, total credit, debit Fintech integrated packages
and prepaid card processing volumes in the
United States are approximately $8 trillion FIS and Fiserv offer an array of integrated commercial
A today. Looking at recent research compiled by financial services, sold as a bundled offering, to merchants
The Strawhecker Group, some of the largest U.S. acquir- that go well beyond payment processing. Then there are
ers include (not in any particular order) Chase, BofA, payment facilitators (payfacs) like Square and Stripe,
Citigroup, US Bancorp's Elvaon, Wells Fargo, FIS, Fiserv, which I believe will be one of (if not the biggest) threats to
Global Payments, Square, Adyen and Stripe. the monopoly big banks hold on payments. Both FIS and
Fiserv have services that help software companies roll out
Despite there still being between 500 and 1,000 companies payfac solutions.
in the U.S. merchant processing arena, the top 10
companies control over 80 percent of U.S. transaction I expect more payfacs will be high up on this list as
volume, creating a sort of monopoly. This is due to we approach the end of the decade. Payfacs can bring
mergers that have taken place over recent years, such merchants not just a more simplified payments experience,
as FIS buying Worldpay, Fiserv buying First Data, and but they can also bundle other financial services in a
Global buying both Heartland and TSYS. The analysis white-labeled fashion. For example, Square funded $2.3
clearly shows what companies are dominating the space billion in small business loans in 2019 and despite the
today and predicts where The U.S. payments industry is COVID 19 pandemic, Square still funded about $1 billion
headed in the next decade. in 2020. In addition, in March 2021, Square became an
FDIC-insured bank, enabling the company to bring forth
Big bank integrated packages innovative business banking products.

The big banks are the biggest, baddest players in the
payments space. They are using payments as a value- One thing of note, though, is that most big banks on this
U.S. acquirer list have concluded it's better to partner
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