New research from Galileo finds that brands that offer embedded financial services within their apps have a leg up on customer acquisition and retention, but they struggle to keep up with consumer demand for such services. Roughly 80% of executives say they plan to launch such integrated financial services, but only 20% have actually done so.
Galileo’s 5 key findings
1. Debit remains foundational, even as financial activity shifts into brand apps
- 60% of consumers use a bank or credit union debit account;
- 17% rely on payment apps as their primary method for everyday purchases;
- 41% use digital wallets within brand apps;
- 20% use features like instant refunds or BNPL in shopping and travel apps;
- 24% changed how they pay in the last year because of rising prices; and
- 22% actively chose brands offering better rewards.
2. Brands recognize the opportunity, but most are still in planning mode
- 100% of surveyed brands have or will plan to launch integrated financial services within 12 to 18 months;
- Only 1 in 5 surveyed brands has launched integrated financial services;
- 28% of brand executives report being in “crisis mode”;
- 80% cite competitor moves as an urgency trigger; and
- 70% report customer loss to brands with stronger financial offerings.
3. Payment experience drives loyalty and brand choice
- 50% of consumers chose one brand over another because paying or getting a refund was easier.
- 20% reported purchasing more often when payment methods are saved in a brand app; and
- 63% say they are more likely to keep using a brand app if payments are much easier and faster.
Consumers say the biggest benefits of integrated payments are:
- Faster checkout (36%);
- Earning more rewards or cash back (33%);
- Easier spending tracking (23%);
- Simpler refunds and returns (21%); and
- Fewer payment problems or declines (15%).
4. Consumers are open to using financial tools in brand apps:
- 54% are comfortable using brand apps for instant refunds;
- 51% comfortable paying for purchases in-app; and
- 53% comfortable receiving direct deposits in-app;
But concerns persist:
- 27% worry about fraud; and
- 17% worry about data sharing or selling.
5. Brands want partners that take the risk off their plate
- 62% prioritize partners that assume risk and liability for compliance, fraud, and operational issues; and
- 53% prioritize the ability to integrate with minimal disruption to current operations.