CHAPTER FOUREMBEDDED FINANCE IN THE OFFLINE WORLD
Embedded finance's suitability for online transactions and digital businesses was discussed in Chapter 3, but now we turn our attention to the world of brick-and-mortar businesses, which is probably the most exciting iteration of what embedded finance can offer. In 2019, Angela Strange, general partner at the venture capital firm Andreessen Horowitz, announced: “In the not-too-distant future, I believe nearly every company will derive a significant portion of its revenue from financial services.”
Bain Capital Ventures’ Matt Harris agrees. Strange didn't just mean Google and Apple. The ongoing Covid pandemic and the accompanying restrictions on activity placed severe stresses on offline businesses, but in the summer of 2021, with Covid still ongoing in most of the world, brick-and-mortar business still counted for 75% of retail transactions in the US. In Europe, the numbers are similar, with about two-thirds of retail transactions in 2021 taking place offline.1
A LOOK INTO THE FUTURE: THE SUPER APPS
It is no secret that China is well ahead of the West when it comes to having their life fully embedded into apps such as Alipay and WeChat. When asked what the day-to-day life of a person living in China powered by embedded finance looks like, Yassine Regragui, fintech specialist and expert on China, refers to his own experience:
During my six years living in China, I never had to withdraw cash or use my bank card to pay, I only ...
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