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Yahoo
2 hours ago
- Business
- Yahoo
Why embedded finance is the next growth frontier for banks and merchants
Embedded finance and digital wallets are no longer fringe features - they are now fundamental to how consumers shop, borrow, and engage with brands. For financial institutions and merchant acquirers, this is more than a technology shift. It's a strategic inflection point that presents both risk and reward. Demand for flexible finance is growing – but so too is demand for solutions that are secure, fully regulated, and seamlessly integrated. Our collaboration with Visa on the recent 'Payments Disrupted' forum made one thing clear: embedded lending is no longer viewed as a consumer gimmick. It's becoming an infrastructure-level decision for large and mid-market merchants. Those who adapt can unlock entirely new revenue channels and customer relationships. Those who don't may find themselves left behind by digital wallet and embedded alternatives that offer greater convenience or stronger brand alignment. In fact, 45% of UK adults are comfortable leaving the house without a physical wallet or payment card thanks to the existence of digital wallets such as Apple Pay or Google Pay, according to research by Additionally, data from UK Finance shows that 32% of adults are now using mobile payments. How banks can regain ground in the embedded finance era For traditional banks and regulated players, the opportunity lies in delivering embedded finance with all the reassurance, compliance, and control that enterprise merchants now expect. This is especially relevant as regulators across the UK and EU take a sharper look at Consumer Duty, credit risk, and digital consent flows. Embedded finance - when offered responsibly - is a way for banks to evolve with the market while keeping the trust that fintechs are still earning. From retailers to hospitality groups, enterprise merchants now want to offer point-of-sale finance and digital wallet options that are deeply aligned with brand values, risk appetite, and customer journeys. That means banks and acquirers need to move from being processors to being orchestrators - creating frameworks that allow merchants to retain control over data, loyalty, and post-sale engagement. One of the most important takeaways from our work in this space is the need for orchestration, not just aggregation. Too often, merchants are left integrating half a dozen fintech APIs with little coordination or compliance cover. Our approach is to offer embedded finance infrastructure that integrates lending, payment routing, dispute management, and fraud protection - all inside a regulated wrapper. Take digital wallets as a case in point. Wallets like Apple Pay and Google Pay have become behavioural defaults - not just payment tools. For merchants, accepting wallets is no longer optional. But ensuring those wallets connect seamlessly to loyalty programmes, fraud checks, and data insights – that's where regulated partners can make the difference. Risk, trust and regulation: Where banks still have the edge More importantly, when embedded finance is tied to loyalty or instalment offers, merchants want assurance. They want to know their customers won't face unexpected costs. They want approval logic that's explainable, and settlement flows that are predictable. That's where banks can bring an advantage: embedding risk control and regulatory compliance without slowing down the user experience. As embedded finance gains ground, we're also seeing demand for tighter data stewardship. Merchants are asking: who owns the customer insight? Who controls the credit risk model? Who gets to personalise the next offer? In our model, the merchant remains in control. We believe banks should act as enablers - not extractors. Critically, embedded finance must also evolve within a strong governance environment. With Consumer Duty coming into sharper focus and scrutiny increasing around deferred payment models, banks are uniquely placed to offer finance that's not only functional but also fair. That's what merchants need from their payment solutions – real-time affordability logic, transparent disclosures, and live support to assist with any merchant or customer concerns. This year, we've seen particular momentum among enterprise retailers who are exploring how embedded lending can work within omnichannel journeys. From offering pre-approved instalment plans to returning loyalty customers, to enabling one-click top-ups during peak sales events – the direction of travel is clear. Flexibility must be smart. Finance must be fair. And payments must move as fast as customers do. The competitive advantage for banks lies in combining trust with innovation. Fintechs are fast, but banks have longevity. When those two forces meet in the right way, the result is embedded finance that scales with confidence. At Lloyds Merchant Services, we see this shift playing out across our 35,000+ merchant relationships. We're also seeing that the best implementations happen when technology and relationship teams work together. Our merchant onboarding doesn't just involve APIs and terminals. It involves education, co-designed flows, and escalation routes that reflect the operational realities of enterprise merchants. That philosophy is guiding our embedded finance roadmap. Whether it's FlexPay - our point-of-sale finance solution - or broader digital wallet integrations, we focus on preserving merchant ownership while offering institutional-grade infrastructure. We collaborate with partners like FreedomPay and Fiserv to ensure that merchants of all sizes can access advanced payment tools without losing control or visibility. From processing to partnering: The next move for financial institutions That's what embedded finance should be about. Not just pushing a product but enabling a better commercial experience – one that creates value for both merchant and end customer. Banks have an opportunity to lead here. But it means thinking beyond channels and cards, and toward journeys and outcomes. As regulators move, as fintechs scale, and as customers demand more seamless, flexible, and meaningful experiences, we believe the future of embedded finance belongs to those who can combine trust, speed, and intelligence – without compromise. That's what we're building at Lloyds Merchant Services. And that's why the next chapter of payments will be written not just by disruptors, but by those who know how to partner well. Ross Taylor is MD, Sales, Operations and Portfolio Management, Lloyds Merchant Services "Why embedded finance is the next growth frontier for banks and merchants" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Hans India
10 hours ago
- Business
- Hans India
‘No UPI here, pay cash or no tea': Viral poster sparks tax debate
Bengaluru: In a digital age where cashless transactions are becoming the norm, a tea stall in Sagar taluk of Shivamogga district, Karnataka, has gone viral for refusing digital payments. A poster stuck on the wall of the modest eatery bluntly reads: 'No Google Pay, PhonePe, Paytm, BharatPe — there's no 'pay' here. Pay cash for bonda, pay cash for tea, pay cash for anything. No credit. Only cash accepted.' This striking message has caught the attention of social media users across platforms, especially as it comes amid increased action by the Commercial Tax Department. Small business owners, including bakery and tea shop vendors, have reportedly received tax notices for high-volume transactions conducted via UPI (Unified Payments Interface), prompting many to revert to cash-only dealings. The viral image, shared widely on social media with captions like 'Seen at a local canteen in Sagar,' highlights a growing sentiment among small traders who feel targeted by recent tax scrutiny. Many users commented on the irony of promoting digital India while penalizing those embracing it. One user wrote, 'This is the voice of the nation,' while another noted, 'This crackdown benefits only large e-commerce platforms, not small vendors.' Others criticized the poster's stance, calling it tax evasion in disguise. 'Salaried workers pay taxes on every rupee — why should small business owners escape it by refusing UPI?' one user questioned. As the debate over digital payments and taxation intensifies, this modest tea stall's message has sparked a nationwide conversation on fairness, compliance, and the cost of going digital.
The Hindu
a day ago
- Business
- The Hindu
GST notice: State and Centre have to agree on reprieve for small traders
Small traders and businessmen, who have come under the lens of the Commercial Taxes Department over the non-payment of Goods and Services Tax (GST) over the last four years for UPI transactions, can get a reprieve only if the State and the Central governments agree to a solution. While the department is learnt to have issued notices to over 10,000 businesses based on the UPI transactions, it is difficult for the government to waive the penalty/interest or the tax burden, department officials say. Deputy Chief Minister D.K. Shivakumar claimed that the number of notices could be about 14,000, and said that the State would write to the Centre to withdraw notices, and blamed the BJP for the current problem. 'Both governments have to decide in the GST Council on the future course of action since both the State and the Central GST are involved,' an official said, adding that trade bodies and associations could petition the government over the inability of traders to pay tax retrospectively. Based on information from PhonePe and Paytm, traders offering goods and who have exceeded ₹40 lakh in UPI transactions per annum and those offering services and who have exceeded ₹20 lakhs in transactions per annum have been issued the notices. Sources said that Google Pay transactions are yet to be assessed. 'Because the tax liability can be flagged for the previous four years, the notices have been issued from 2021-2022 and till January 2025 when the department received data,' a senior Commercial Tax official explained. On Monday, officials also interacted with anxious small traders, who came to clarify their doubts, and explained the reason behind issuing the notices. 'Notice is a mode of communication or an intimation. Traders need not be worried. If exempted goods were handled, the notices will be withdrawn. The department will hear from traders and businesses will be assessed before the tax demand is issued,' Joint Commissioner of Commercial Tax Meera S. Pandit told the audience. The exempted goods include vegetables, fruits, flowers, milk, unbranded or unpacked foodgrains, handicrafts, petrol, diesel, and liquor. If the trader is selling other than exempted goods in his shop, the GST will apply to those goods only, the department has clarified. On the 18% GST demand raised in the notices, the official clarified: 'Based on the documents provided on the transactions and other information, the final tax demand could come down. The demand can only be lowered but not increased when the demand order is issued'. She pointed to similar exercises being carried out in Gujarat, Tamil Nadu, and Andhra Pradesh. 'Though the notices have asked the traders to respond within seven or 10 days, sufficient time would be provided. Three reminders will be sent and officials will also call the trader on phone. The assessment will be based on the best judgment and closer to reality if documents cannot be provided. The tax demand is not to trouble anyone or dip into profits,' Ms. Pandit said. Meanwhile, after the outcry by traders, the department has changed the format for issuing notices. While initial notices provided details of transactions, possible tax liabilities at the rate of 18% GST, interest and penalty, currently notices are being issued to traders, intimating them of transaction of over ₹40 lakh, which requires registration under the GST regime.
India.com
a day ago
- Business
- India.com
BIG UPI update: UPI users can now easily withdraw loan amount by…
Home Business BIG UPI update: UPI users can now easily withdraw loan amount by… BIG UPI update: UPI users can now easily withdraw loan amount by… Now, not only can payments be made at shops using the credit line amount through UPI, but features like withdrawing cash, sending money to someone and making payments to small shopkeepers will also be provided. BIG UPI update: UPI users can now easily withdraw loan amount by... If you use UPI then there is good news for you. A big change is going to happen regarding overdraft facility through UPI. Under this, the credit line will be directly linked to UPI. After which you will be able to easily withdraw money from your loan account through UPI. The National Payments Corporation of India (NPCI) has issued a circular on July 10, 2025, in which new guidelines have been issued for linking pre-approved credit lines to UPI. The circular states that from next month ie August, you will be able to use the amount of the bank's pre-approved credit line directly through UPI. Till now, only purchasing goods was allowed. Now, not only will payments be made at shops through UPI from the credit line amount, but the feature of withdrawing cash, sending money to someone and making payments to small shopkeepers will also be provided. Will Loan account be directly linked to UPI? Under the new rule, UPI users will now be able to link fixed deposits, shares, bonds, property, gold or personal and business loan overdrafts to UPI and use them. In simple words, now you will be able to make payments directly from the loan account through third party UPI apps like Paytm, PhonePe, Google Pay. From when will this service be available? NPCI has instructed all UPI bank members and credit line providers to implement this facility by 31 August 2025. In such a situation, crores of users using UPI will get its benefit. What is a credit line? A credit line is a type of loan, which is approved by a bank or any financial institution on the basis of the user's income and credit score. You can link the credit line account approved by the bank to UPI and use it. For breaking news and live news updates, like us on Facebook or follow us on Twitter and Instagram. Read more on Latest Business News on
Hans India
a day ago
- Hans India
One held for committing financial frauds
Tirupati: The Government Railway Police (GRP) and Railway Protection Force (RPF) of Tirupati jointly arrested a fraudster on Sunday who had been cunningly deceiving train passengers by exploiting their trust and misusing their mobile phones for financial fraud. The accused, identified as Venu Babu from Ongole, was apprehended following a coordinated operation by the GRP and RPF teams. He had been targeting unsuspecting passengers by purchasing regular train tickets and blending in with fellow travellers. Through friendly and casual conversations during the journey, he would earn the trust of co-passengers before requesting their mobile phones under the pretext of needing to contact his relatives or friends. Once in possession of the victim's phone, Babu would covertly access mobile payment applications like PhonePe, Google Pay, and Paytm to transfer funds to bank accounts of his choice. The victims remained unaware of the fraudulent transactions until much later. During interrogation, Venu Babu confessed to a similar crime committed in October 2024 at Tirupati Railway Station, where he duped a passenger and fraudulently transferred Rs 87,000. Following diligent investigation, the authorities managed to recover the entire defrauded amount from the accused. Legal proceedings against him are currently underway. The GRP and RPF have urged passengers to remain cautious during train journeys. They specifically advised travellers not to hand over their mobile phones to strangers and to refrain from accepting food items or any goods from unknown individuals. Commending the swift action of the security forces, the Railway Department lauded the efforts of Dharmendra and Ramakrishna Reddy of the RPF, along with their teams, under the leadership of RPF Inspector Sandeep Kumar and GRP Inspector Aasirvadam.
