Consumers turn to embedded finance amid lingering recession fears


Despite finance analysts predicting a 20% chance of a recession in the upcoming year, consumers remain apprehensive and are reducing their spending.

Marqeta’s Q3 2023 Consumer Pulse Report, in collaboration with Propeller Insights, surveyed 3,000 consumers from the US and the UK. The study highlighted that even with the ambiguous economic climate, consumers are increasingly looking at new technology solutions, such as embedded finance offerings and Accelerated Wage Access, to better manage their finances.

The research also revealed a rising consumer interest in how Generative AI solutions can aid them in curbing their expenses and in channelling their savings more effectively.

Living expenses persist at elevated levels, with 86% of those surveyed being wary of an imminent recession. Consequently, 67% of consumers are adjusting their monetary habits, mainly to cut back on spending.

The appeal of daily wage access is gaining traction. Over two-thirds (66%) indicated they would forgo other conveniences, such as social media access or even haircuts, to receive their wages daily. This inclination was more pronounced in the US, where some expressed they would even sacrifice their retirement savings for daily wage access.

Consumers prioritise a seamless payment experience over corporate values. A whopping 72% mentioned they would be more loyal to brands offering superior customer experiences, while 85% believed the checkout experience is of greater significance than a company’s societal stance.

Marqeta’s Market Intelligence Lead, Rachel Huber said, “Today, there is no room for anything less than a stellar customer experience. Consumers are demanding seamless touch points at every stage of the customer lifecycle. Our report shows the opportunity for companies to think about how they can boost customer loyalty and offer embedded finance solutions that elevate their customer experiences and promote financial empowerment.”

Huber further commented on Generative AI’s potential influence, stating, “Generative AI has the potential to be a force for good when it comes to financial management. What our findings show is that after a year of unrelenting rises in living expenses, consumers are open to emerging technologies that could provide support and unlock new ways to improve financial well-being.”

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