Circles, a significant player in the fintech and telecom convergence space, is partnering with Airwallex to fold embedded finance capabilities into CirclesX SaaS – their new platform. This partnership will give telecom operators the ability to launch digital banking (or “digibanking”) services in more than 70 countries worldwide, thus raising their revenue and increasing customer satisfaction. CirclesX is the platform over which AT&T, KDDI, and other telecom providers have been building and launching their digital mobile services. By integrating the Airwallex’ financial engine into CirclesX via its FinX component, telcos can quickly present a variety of financial services to their customers, such as international payments, expense management, supplier payments, and travel cards.
This is possible without the need to create complicated financial systems from the ground up, which brings down operational expenses as well as regulatory challenges. Thus, telecom firms can very quickly venture into offering financial services.
The partnership reflects the fact that traditional telecom services are being increasingly commoditized. To stay in the game, operators are looking for ways to not only strengthen their customer relationships but also diversify their sources of revenue. Embedded finance offers a very attractive way for telecom providers to make the most of their existing customers, data, and KYC functionalities to offer financial services right on their platforms. Doing that means that telcos no longer limit themselves to just providing connectivity but can morph into digital service ecosystems. Looking at it from a wider finance industry angle, this is a hint that the embedded finance trend might pick up speed even more. Financial services, which have been mostly accessed through banks and fintech apps, are now starting to be offered through non-financial platforms.
Research-wise, it’s a fact that embedded finance can greatly enhance customer lifetime value and decrease churn, thus being a potential growth engine for platforms that implement it. The collaboration between Circles and Airwallex is a perfect example of how a traditional telecom workflow is being enriched with banking functionalities.
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The implications for financial institutions are substantial. Banks might confront a rising wave of competition if telecom operators decide to offer financial services, notably in segments like payments, remittances and expense management. At the same time, this shift in the market changes the nature of collaboration since banks and fintechs teaming up with telecom companies can dramatically increase their reach and provide their services in more integrated and user-friendly manners.
For players in the telecom and fintech industries, teaming up can be an excellent method to lessen both risk and costs of introducing financial products worldwide. Instead of doing a lot of groundwork to build their own infrastructure and, on their own, dealing with various complex regulatory environments, companies can by now through partnerships swiftly launch digibanking services in various markets. Such opening up of financial services infrastructure will lead to more innovation, allowing smaller entrants to even challenge bigger and more established financial institutions.
Furthermore, businesses that leverage telecom platforms will gain access to more sophisticated financial instruments through their existing telecom service providers. Simple access to features like multi-currency payments, expense tracking, and cross-border transactions will help companies streamline their operations and enhance their financial management. It is even more important for those working across different countries where dealing with payments and different currencies can be a real headache.
Looking ahead
The integration of embedded finance into telecom platforms could redefine how financial services are distributed globally. As more industries adopt similar models, the line between financial and non-financial services will continue to blur. Platforms that successfully integrate financial capabilities into their core offerings are likely to gain a competitive edge by delivering more value to users in a single, unified experience.
Conclusion
The Circles and Airwallex partnership represents a pivotal step in the evolution of embedded finance. By enabling telecom operators to launch digibanking services at scale, the collaboration not only creates new growth opportunities for telcos but also reshapes the competitive landscape of the financial industry. As embedded finance continues to gain momentum, businesses that embrace this model will be better positioned to innovate, scale, and meet the changing expectations of digital-first customers.
