With shoppers across the UK set to take to the high-streets for Black Friday and Christmas Shopping, small businesses are turning to embedded finance solutions to handle the surge in payment volumes on their platforms.
According to a new report from YouLend, UK small and medium-sized enterprises (SMEs) are integrating embedded finance platforms to secure vital capital ahead of the busiest shopping period of the year.
YouLend found that there has been a 30% surge in financing applications ahead of Black Friday (29 November), with e-commerce platforms being the main driver in this embedded finance adoption.
Embedded payments enable financial capabilities to traditional non-financial businesses to offer its customers a seamless transaction experience that looks to offer as much of a natural payment process that a customer would typically associate with a financial service provider, such as PayPal for example.
For e-commerce companies, marketplaces and other online shopping platforms, embedded finance options for consumers during this time period allows them to offer a range of preferred payment methods that allows flexibility and potential customer retention in the future.
The payment solution is also essential as YouLend found that many UK SMEs face significant challenges during the Black Friday and Christmas period, such as inventory shortages, understaffing and rising costs.
SMEs are suffering as a result of these challenges and not being able to benefit from the lucrative year-end sales surge during the holiday season.
This significant surge in consumer shopping demand during this time period is exemplified by the £13.3bn that was spent from UK consumers during Black Friday weekend last year, a 7.3% increase in sales from 2022.
Whilst this is one of the most valuable time periods of the year for retailers, YouLend found that many businesses, particularly SMEs, were unprepared for the significant uptick in consumer shopping and needed more flexible payment solutions to appease consumer demand.
It is becoming more essential for SMEs to begin adopting embedded finance solutions to integrate some of the most popular payment methods amongst consumers, whether it may be Apple Pay, buy now, pay later with Klarna, and traditional debit and credit card transactions.
YouLend has recognised this importance of payment flexibility, offering solutions to SMEs to access funding through strategic partners and the chance to apply for funding of up to £2m and personalised offers.
Jakob Pethick, Chief Commercial Officer at YouLend, said: “The strong demand from small businesses around Black Friday has motivated our partners to focus on providing timely and flexible financing solutions tailored to the needs of their small business customers.
“Embedded finance has proven to be a critical tool for SMEs, enabling them to manage working capital, fill inventory gaps, and pursue growth opportunities during the busy holiday season.”
YouLend is also looking to provide its AI-powered decisioning model to support and alleviate the pain points most retail partners face, whilst also assisting in aiding financial health for SMEs.