Adyen and BCG Research Finds Embedded Payments and Finance Now a $185 Billion Opportunity -- a 25% Increase in Two Years

Rhea-AI Summary

Adyen and BCG's new report reveals a $185 billion market opportunity for SaaS platforms in embedded finance, marking a 25% increase since 2022. The growth is driven by favorable interest rates and expanding banking revenue pools. With less than 20% of the market currently addressed, SaaS platforms can potentially multiply their revenues by 3-4x by embedding financial products like business accounts, loans, and issued cards.

The research shows strong demand from SMBs, with 50% expressing high likelihood of using embedded finance products. Top platforms are already generating over 50% of their revenues from embedded payments and finance. The study involved research with ~30 leading platforms and ~2,000 SMBs across North America, Europe and Australia.

Positive

• Market opportunity increased 25% to $185 billion
• Potential 3-4x revenue multiplication for SaaS platforms
• 50% of SMBs show high interest in embedded finance products
• Top platforms already generating over 50% revenue from embedded finance
• 80% of market still untapped, indicating significant growth potential

Negative

• None.

• Embedded finance beyond payments is now a critical growth driver for Software-as-a-Service (SaaS) platforms.
• Less than 20% of the market is currently addressed, meaning now is the time for platforms to tap into this revenue pool and meet rising SMB demand.
• SaaS platforms embedding financial products are set to amplify their revenues up to 3-4x.

SAN FRANCISCO, Oct. 28, 2024 /PRNewswire/ -- Adyen, the financial technology platform of choice for leading businesses, has today launched a new report with Boston Consulting Group (BCG) which reveals a game-changing $185 billion market opportunity for SaaS platforms, a substantial 25% increase since 2022. BCG's analysis reveals this market growth is driven by a favorable interest rate environment — due to higher bank revenues from accounts — and an overall expansion of banking revenue pools.

In parallel, the demand for embedded finance from small-and-medium-sized businesses (SMBs) — a sector typically underserved by traditional financial institutions — has broadened well beyond payments.¹ This, coupled with the market's expansion, opens a significant opportunity for SaaS platforms to embed into their offerings more advanced financial products like business accounts, loans, and issued cards. Given typical margins on these products, most platforms have an opportunity to multiply their current revenues by up to three or four times.

"Embedding financial products creates a win-win scenario: SaaS platforms deepen user relationships and unlock new revenue streams by addressing SMBs' overlooked financial needs," says Blake Breathitt, SVP Platforms & Financial Services at Adyen. "Our research underscores the window of opportunity for SaaS platforms to embrace embedded finance to stay competitive, or get left behind. There is an immense market opportunity here for SaaS platforms, which are in an ideal position to deliver these within their existing ecosystems."

The market is primed with strong demand from SMBs with 50% of SMBs expressing a high likelihood of utilizing a full suite of embedded finance products in the near future, reinforcing its growth potential.

"We are observing an appetite from SMBs to consume a broader range of financial services from within their SaaS platforms, notably loans extending beyond simple cash advances or current accounts tightly integrated in receivables and payables workflows," says Stefan Dab, Founder of BCG's Payments and Fintech practice.

The report highlights that top platforms are now generating more than 50% of their revenues from embedded payments and finance, and shines a light on embedded finance as the next critical growth lever for SaaS. To differentiate in an increasingly competitive market, platforms must consider integrating financial products in their offering.

Adyen and BCG's report provides a strategic playbook for SaaS platforms looking to succeed in the embedded finance space. It outlines actionable insights on differentiating products from traditional banks, optimizing go-to-market strategies, and forming effective partnerships to drive growth. To access the full report, click here.

Methodology

In partnership with Boston Consulting Group, to reassess the state of embedded finance for SaaS platforms in 2024, we conducted quantitative and qualitative research with ~30 leading platforms and ~2,000 SMBs across North America, Europe and Australia in eight industries — including F&B, Retail and Hospitality.

About Adyen

Adyen (ADYEN:AMS) is the financial technology platform of choice for leading companies. By providing end-to-end payments capabilities, data-driven insights, and financial products in a single global solution, Adyen helps businesses achieve their ambitions faster. With offices around the world, Adyen works with the likes of Meta, Uber, H&M, eBay, and Microsoft.

About Boston Consulting Group

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

¹ 2,000 small-and-medium-sized businesses (SMBs) surveyed across eight industries – including Food and Beverage (F&B), Hospitality and Retail – in Europe, North America and Australia.

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SOURCE Adyen

FAQ

What is the current market size for embedded payments and finance according to Adyen (ADYEY) 2024 report?

According to Adyen's 2024 report with BCG, the embedded payments and finance market represents a $185 billion opportunity, showing a 25% increase since 2022.

How much revenue growth can SaaS platforms achieve through embedded finance according to Adyen's 2024 study?

According to Adyen's research, SaaS platforms can potentially multiply their current revenues by 3-4 times by implementing embedded financial products.

What percentage of SMBs are likely to use embedded finance products according to Adyen's 2024 report?

According to Adyen's 2024 report, 50% of SMBs express a high likelihood of utilizing a full suite of embedded finance products in the near future.

How much of the embedded finance market is currently addressed according to Adyen (ADYEY) 2024 research?

According to Adyen's 2024 research with BCG, less than 20% of the embedded finance market is currently addressed.