A recent study conducted by Forrester on behalf of Fabrick, “Adopting Embedded Finance for Seamless Payments Success: Focus on Europe,” provides valuable insight into the state of embedded finance across Europe. Conducted between September 2023 and January 2024, the survey surveyed 600 decision makers to assess the state of embedded finance and the key factors influencing their choice of payments/embedded finance solution provider.
First, the survey revealed a strong desire to invest in payment acceptance solutions over the next 24 months, with 71% of surveyed organizations planning to make new investments or increase current investments in payment acceptance capabilities, specifically prioritizing payment orchestration solutions (75%), digital wallets (prioritized by 80% in the fashion retail sector), loyalty systems (73%), digital cards, and embedded multi-country payment solutions (71%).
Amid economic fluctuations, impending regulatory changes and shifting consumer payment habits, European businesses are actively seeking ways to manage the growing complexities and costs associated with payments. The survey found that 60% of respondents considered these complexities to be “challenging” or “very challenging,” especially around regulatory compliance (68%), technological innovation (63%) and the digitization of payments (61%).
Moreover, businesses recognize that they require advanced technology and expertise to effectively navigate these challenges. Many businesses acknowledge that they rely on third-party providers of integrated financial services to bring value to their operations. Notably, 76% of participants believe it is “basic” or “very important” that payment service providers offer a comprehensive end-to-end payment cycle, including back-office processes.
Sixty-six percent of respondents reported difficulties in reconciling payments across different methods, with particular challenges noted among insurance companies (76%) and non-bank financial institutions (71%). Additionally, 66% of surveyed people across all sectors found it difficult to maintain a unified view of all payments across physical and digital touchpoints. End-to-end processing interoperability issues between technologies were classified as “difficult” or “very difficult” by 64% of respondents, complicating visibility into real-time payment visibility. Given the growth of cross-border e-commerce, the ability to accept payments embedded in multiple countries is prioritized by 71% of companies, with a significant 94% planning to increase their budget for this purpose. Overall, the survey consolidates the strategic direction outlined in Fabric’s 2024-2026 plan, which includes a merger with Axerve in February 2023 that will strengthen Fabric’s ability to offer integrated financial services, from payment orchestration capabilities to smart routing and open finance. Fabrick’s strategy also includes a focus on organic growth, strategic acquisitions and expansion in key markets such as Germany, France, Spain and the UK, aligned with its goal of strengthening its market presence and enhancing its portfolio of services.
Reflecting on the survey results, Paolo Zaccardi, CEO of Fabricrick, said: “We are pleased to see such strong market recognition for our focus on end-to-end payment solutions. We aim to be a reference point for innovation across Europe, meeting current demands and anticipating future needs in the embedded finance sector. This survey confirms that the industry is moving towards integrated financial services. Fabricrick’s journey shows that embedded finance in B2B projects effectively addresses players’ needs for managing payment flows and reconciling invoices. We therefore conclude that embedded finance allows companies from all sectors to integrate financial solutions via APIs and offer payment, banking and insurance services without the need for their own financial infrastructure.”
