Mollie x YouLend: Transforming Payments Fireside Chat @ FinTech LIVE

On 23rd October, during FinTech LIVE London 2024, Neil Perry (Group Content Director at Bizclik) invited our Chief Commercial Officer, Jakob Pethick, and Henrique Di Lorenzo, VP of Financial Products at Mollie, to join him for a fireside chat about how embedded finance is transforming the payments industry.

Mollie, a European payment solutions provider has been pioneering money management for SMEs for the past 20 years. In 2021, they partnered with Youlend to launch Mollie Capital, a fresh way to give their small business customers a fast and flexible way to obtain business funding. Here’s what Henrique and Jakob had to say about the partnership and the future of embedded finance.

💡 Embedding lending fuels small business expansion

Henrique: “We work with very talented entrepreneurs, but cash flow or liquidity challenges are preventing them from reaching their full potential. It usually comes down to three problems: (1) stock and inventory (2) business expansion (3) marketing. These are the typical areas where we help customers with funding and our embedded financing solutions. If they grow, they will sell more and we will process more payments – a win-win for everyone.”

‍Jakob: We help companies like Mollie serve their underlying merchants, whether they're in ecommerce, pubs, bars, or restaurants. They struggle to access financing because it's difficult to serve small businesses as they’re usually quite risky. Technology companies are really well positioned to help small businesses access financing. They probably have more trust with that small business customer than a bank would.

💡 A successful partnership delivers at pace towards a clearly defined goal

Jakob: What's worked really well is that Mollie has a very clear idea of what it wants to do. It is extremely focused on the underlying seller, and has a very high bar for what sort of user journey is acceptable. At the launch of the partnership, Mollie was really good at challenging us to build something that was better for the underlying customers. In general, it is really key to have a high degree of trust and bring a lot of yourself to the conversations.

I also like seeing that some of our partners can go live very quickly, get a solution out to small business customers and fund them very fast, without necessarily having the same standard. But it does mean that partnerships come in many forms across the ecosystem.

Henrique: I think we are a hard customer to partner with when we build a product. For us, it's very important to have a tech first approach – quality APIs – because we really want to embed products, and our engineers often lead on those conversations. Speed of delivery is very key for us.

💡 Acknowledge any tension in the partnership to keep it unique and adding value

Jakob: A fundamental challenge in our partnership is that whatever YouLend brings to Mollie, Mollie could be building themselves. That means that from day one there's an open conversation that says: “Mollie might one day want to become a bank with their own lending product.

So the key is to find ways where YouLend can add value to Mollie, and figure out where Mollie needs to build themselves. There are also a lot of other companies who offer embedded financial services, and Mollie could well work with any of them. But that's just a natural tension you have in any partnership.

‍Henrique: One of the challenging things is the prospect that our competitors could partner with YouLend. Then what used to be a very special, unique product for us – suddenly everyone has it, and we no longer have something differentiated. The way we deal with that is really pushing YouLend hard on the speed of new building products – trying to be the first to launch them, ahead of their other partners.

💡 Seek feedback from the team engaging with your customer

Jakob: The partnerships where we see we have a high degree of empathy for our customers comes from really good feedback loops with their customer support teams. You don't think about all the edge cases, and usually the people who pick it up are customer support teams or your designers who spot it. It's about getting a very consistent feedback loop there.

There are some classic embedded financing use cases where there can be customer friction or things can go wrong. They're easy to focus on, because you are aware of them from day one. The ones you forget about are usually the smaller edge cases. At YouLend, it's our job to provide a tech stack that makes it easy for our partners to deal with these.

Henrique: I absolutely agree on the need to engage with customer support. But what usually goes wrong is less visible in our day to day operations. Customers that don't fall under existing criteria can struggle on their journey, and they reach out to customer support.

It's really thinking about all these edge cases and making sure that those journeys are also well mapped, automated, and that you can provide a good experience.

💡 Embedded finance will drive further integration and provide more services to the customer

Henrique: Today, especially in fintech and banking, you see a lot of players are just getting to each other's space. There's customer demand for integration of their stack: payments, invoices, accounting, bookkeeping, payroll, accounts payable, receivables. Previously for every one of those solutions, they would engage with a different player in the ecosystem.

The industry has moved on from the need to choose: to either be the best in class, go deep and be really the best on something; or to go broad with an all in one platform. Now with embedded finance you can actually do both.

‍Jakob: A lot of partnerships now are blurring the boundaries between building the service themselves, or partnering for it. We work with some companies that initially would like YouLend to provide the full stack of services, take all the credit risk, and make sure all regulations are complied with. Over time, they would like to take away parts of that value chain and own it themselves.

But the underlying demand is that small business customers go to too many places to serve their financial needs. There's an opportunity for a lot of tech companies to solve more of their customers’ financial service problems, driving the continued adoption of embedded finance.