Today, the speed of money flow in the financial sector is more important than ever. Businesses know the faster payments can be completed, the higher the chance is for them to prosper. In this deep-dive, we speak to Adyen’s Vice President of Banking and Financial Products, Thom Ruiter, on why speed in payments is paramount, and how Adyen was able to integrate with the Bank of England (BoE) in record time – with a glimpse into the fintech’s next steps.
Adyen: Rapid BoE integration
Indeed, it was only in 2023 that Adyen obtained banking authorisation from BoE, connecting to the Bank and Faster Payments Service in just eight weeks. “The authorisation enables us to offer our newly launched integrated financial product suite in the UK, including enabling our SaaS platform customers to offer embedded financial services to their small business users,” says Ruiter. “Our banking licence lets us keep providing banking services and financial products in the UK. This continues our operations here under the Temporary Permissions Regime and means we can now match our services in the UK to our European and US offering,” he adds.
Of course, Adyen already works with Instant Payments in both the EU and the US, so adding Faster Payments to its key infrastructure enables this for Adyen in the UK too. “The ownership of these infrastructures under our licenses is pivotal for ensuring the highest quality and the most efficient flow of funds for UK customers on a global scale,” Ruiter continues. “The authorisation further underlines that we are growing as an ambitious centre for international commerce and reflects our vision of becoming an end-to-end financial technology platform for the world’s leading businesses.”
Tangible impacts for Adyen’s platform customers
While its integration with BoE is evidently good for Adyen, what does it mean for Adyen’s platform customers? What tangible benefits can Adyen deliver them? “Our banking licence lets us enable our platform customers to pay their UK users, such as online sellers, vendors, and gig workers, in a minute, 24/7, with only one global partner for both payments and payouts,” answers Ruiter. “This way, these platforms can differentiate themselves and appeal to new users who value receiving their funds as fast as possible.”
Not only does this support Adyen’s existing customers, but it may also attract new ones. A joint report between Adyen and The Boston Consulting Group (BCG) found that 69% of platform users would move, without hesitation, to another platform that offers a more integrated payments experience, including faster payouts. It’s small wonder Ruiter sees Adyen’s BoE integration as a “big opportunity” in the UK market. “Established platform businesses are already seeing as much as 80% of their revenue coming from embedded payments,” he adds.
He continues: “For those platforms considering embedded finance offers for their small business users, we found that there could be a potential revenue uplift of 70%, while the market for small business embedded finance is still at an early stage of development – with less than 5% of penetration. “Our technology means platforms can offer business financing to pre-qualified users directly via their platform while minimising denials. Everything is automated including the proactive risk assessment, defining the amount of money a business can borrow, as well as repayment management.
“If a platform customer of ours processes the embedded payments, they can estimate how much a user can borrow responsibly and automate repayments without burdening their cash flow. Embedded payments make it possible to automate how much a user repays per transaction. “The need for business financing for small businesses can’t be overstated. 94% of the small businesses that we spoke to for our Embedded Finance Report said they would benefit from access to liquidity to grow their business.”
What’s more, Adyen’s banking licence enables it to create new products in the finance sector, such as card issuing services to help its clients discover new sources of income and future-proof their business. Ruiter continues: “Our customers can use one API to payout globally to their own platform customers, which gives those users the chance to use their own money to earn interest, invest in R&D and reduce their dependence on external funding. “This way, they avoid the operational difficulty and scaling issues of working with different providers across regions, and they can also manage funds globally with one partner.
“And, as a local acquirer, we control our operations and ensure that UK customers benefit from our wide range of services, with more speed, flexibility and reliability.”
A glimpse into the future of Adyen
With these expanded capabilities in the UK market, we ask what the future holds for Adyen across the financial landscape. “We want to capitalise on the banking-as-a-service opportunity, and we are expanding our portfolio of in-house solutions that we offer our customers,” notes Ruiter. “By investing in banking licenses in our core markets, we’ve positioned ourselves as the sole provider that offers a full stack embedded financial product suite via a single integration. “We already have Capital and Accounts solutions that enable our platform customers to continue to offer innovative services to their own users. “Capital enables platforms to proactively offer business financing based on historic payments data, while Adyen’s Accounts product allows users to run their finances where they do business and get instant access to funds.
“We’re now focused on what’s next. Businesses need financial technology that keeps up with their own ambition. We started with payments and tackling head-on the patchwork of legacy systems. “Looking at the wider, often fragmented financial landscape, we’re seeking to build greater control and flexibility to the next generation of businesses.”
