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Finance in Online Retail Across the Last Decade; With SoftServe, Provenir, Smarty and Lightspeed

EY estimates that the market size of global embedded finance will grow from $264billion in 2021 to $606billion as early as 2025. With the space set to dramatically disrupt the financial sector worldwide, The Fintech Times seeks to understand how.

While most experts are sure that embedded finance represents the future of online retail, The Fintech Times is also exploring how finance has changed and evolved in this space throughout the last decade. Could past inform us about potential future trends?

To find out more, we reached out to some experts in the space and asked them ‘How has finance in online retail changed in the last decade?’

“A collaborative business model has evolved called embedded finance”

Paul Rusu is the director of consulting and insurance solutions, EMEA at banking solution provider SoftServe. He explains the evolving relationship between retailers and financial service providers:

Paul Rusu, director consulting and insurance solutions EMEA at SoftServe
Paul Rusu, director consulting and insurance solutions EMEA at SoftServe

“The much-hyped online battle between retailers and financial service providers for customer wallets fizzled out after early skirmishes over a decade ago. In its place, a collaborative business model has evolved called embedded finance. For insurance, the two parties now pool resources to deliver finance products to those who want to do their shopping in one place.

“Despite all the bravado, retailers never really looked comfortable taking on finance firms. So, it wasn’t a surprise when they realised they were stronger together than apart.

“Collaboration between the protagonists now means consumers get the best of both worlds, enabling the providers to play to their strengths. It is not easy to navigate the labyrinthine world of finance regulations. Insurers are better placed to deal with the seamless integration of financial services within the retail platform and provide technical expertise and compatibility between systems.

“They help retailers navigate complex regulations to ensure data privacy, consumer protection, and financial transaction compliance. The partnerships also help build relationships with a cross-section of the financial ecosystem that requires experience with contractual agreements.

“Both groups can help educate customers by communicating the benefits and demystifying the complexities of insurance products with clear communication and educational resources. Technology is key for online retailers selling insurance. They need integration platforms, APIs, compliance software, and user-friendly interfaces. Deeper educational resources enhance the customer experience.

“By marrying finance technologies and insurance risk expertise with their vast customer networks, retailers can now create a seamless, compliant, and educational environment. This delivers better insurance products and services for customers and revenue growth for both partners.”

“A shift fueled by the Covid-19 pandemic-related shutdowns”

Kathy Stares, executive vice president of North America at AI-powered credit risk decisioning platform Provenir, explained how the Covid pandemic fuelled change in the space:

Kathy Stares, executive vice president of North America at Provenir
Kathy Stares, executive vice president of North America at Provenir

“There’s been a significant market share shift from brick and mortar to e-commerce, a shift that was fueled by the Covid-19 pandemic-related shutdowns,  and we have seen an accompanying rise in smartphone usage and mobile commerce. All of these shifts have contributed to elevated consumer expectations for digital experience.

“In the past few years, there has been more emphasis on the need for personalisation and customer analytics to make data-informed decisions so retailers can offer up relevant product offers.

“As more buying has shifted to online channels, the incidence of fraud has also risen. Meanwhile, retailers now need to navigate increasingly complex data privacy and protection regulations and guidelines Data security and privacy are now needing to be ‘baked into’ mobile apps and websites from end to end. As a result, retailers need access to data to ensure they know their customers and can thwart fraud while safeguarding customer data.”

“Online retail finance has transformed consumer shopping and business operations”

Vipin Porwal, CEO and founder of shopping app Smarty, uses over 20 years of experience in finance and consumer technology to give an overview of the evolution of finance in online retail:

Vipin Porwal, CEO and founder of Smarty
Vipin Porwal, CEO and founder of Smarty

“Over the past decade, online retail finance has transformed consumer shopping and business operations. Digital wallets (like PayPal and Venmo) and Buy Now, Pay Later (BNPL) services are key payment innovations.

“Smartphones have revolutionised mobile commerce, leading to efficient mobile apps and smooth mobile payments. Amazon has dominated e-commerce with its broad selection, easy payments, and consumer feedback.

“Similarly, globalisation had a significant impact. Alibaba/Aliexpress, an international player, had also entered the online e-commerce space with an efficient supply chain, shipping products from China. Omnichannel strategies from traditional brick-and-mortar players let customers shop online, in-store, or via click-and-collect.”

“Offering both more stability and freedom to consumers and merchants alike”

Liam Crooks, managing director of EMEA at point-of-sale and e-commerce software provider Lightspeed Commerce, also gave his take on where embedded finance is on its journey in online retail:

Liam Crooks on Online retail finance
Liam Crooks, managing director of EMEA at Lightspeed Commerce

“The truth is we’re still very early in embedded finance’s journey; in fact, in five years, only 35 per cent of customers’ product acquisitions will be made in a non-financial context, and yet embedded finance has already developed enormously in the last decade.

“BNPL services are difficult to ignore when it comes to the drastic change in online retail over the last ten years. Key player Klarna only launched in 2015 and for the first ten years, its growth was slow.

“However, in 2020, the business boomed, jumping 46 per cent to reach $53billion GMV, processing around two million transactions a day across 17 countries; and yet, only two years later, its valuation dropped by 85 per cent in 2022.

“As a result of some of the volatility that the market has previously faced, governments are now becoming more involved in the regulation of BNPL programmes to ensure that both businesses and consumers can best benefit from this form of embedded finance.

“This is a positive step for the industry and thanks to the recent open consultation on BNPL schemes in the UK, we can expect BNPL to become an important part of the embedded finance landscape in years to come – offering both more stability and freedom to consumers and merchants alike.”


  • Tom joined The Fintech Times in 2022 as part of the operations team; later joining the editorial team as a journalist.

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