[CONTENT]
€
EUR
Total Economic Impact
Cost Savings And Business Benefits Enabled By Finmid
A FORRESTER TOTAL ECONOMIC IMPACT STUDY COMMISSIONED BY finmid, August 2025
Total Economic Impact
A FORRESTER TOTAL ECONOMIC IMPACT STUDY COMMISSIONED BY finmid, August 2025
Embedded finance is revolutionizing the ways consumers and businesses access financial services driven by demand for convenience, new revenue opportunities, and technological advancement.1 It promises a range of benefits to both financial services firms and embedders such as B2B platforms. By integrating tailored financial solutions, organizations can expand market share, strengthen customer relationships, gain new insights, and open new income streams through revenue share or referral fees. The flexible and modular lending infrastructure of finmid allows organizations to develop their custom-fit financial solutions to enhance their propositions, drive revenue, and foster merchant loyalty.
Finmid is a lending infrastructure that powers platform growth. With its API and no-code solutions, finmid enables platforms, vertical SaaS organizations, and marketplaces to launch tailored financing products, such as cash advances, loans, and invoice financing, for their business customers directly within their interface and at scale. Across industries, borders, and business models, finmid helps its customers drive revenue, improve retention, and fuel their core business growth.
Finmid commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by partnering with finmid.2 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of finmid on their organizations.
To better understand the benefits, costs, and risks associated with this partnership, Forrester interviewed a product lead of a European technology company known for its food and merchandise commerce platform who has experience using finmid. Forrester used this experience to project a three-year financial analysis. Forrester also obtained written testimonials from customers of the interviewee’s organization about their experience with the organization and finmid.
Prior to partnering with finmid, the product lead observed that several small businesses, particularly restaurants, were going out of business as they struggled to achieve pre-pandemic sales levels, which negatively affected the growth prospects of the interviewee’s platform. The interviewee attributed this to a combination of financial, operational, and structural challenges, such as rising operating costs, increasing economic uncertainty, and shifting consumer behavior. They also noted that banks had tightened access to capital, leaving many merchants facing cash flow issues. As a result, these businesses struggled to cover operating costs, invest in growth, and overcome unexpected expenses, which had significant repercussions for the interviewee’s platform, including a high merchant churn rate and revenue loss.
After embedding cash advances into their platform using finmid’s infrastructure, the interviewee’s organization could offer its merchant partners efficient and straightforward access to capital based on their platform sales. The product lead noted that finmid enabled their organization to empower local merchants, helping them build more resilient businesses and achieve sustainable growth. As a result, the interviewee’s organization experienced an increase in gross merchandise value (GMV), a reduction in merchant churn rate, and an increase in customer loyalty and satisfaction.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the interviewee’s organization include:
A 20% increase in GMV resulting in additional operating profit of €1.3 million. The partnership with finmid enables the interviewee’s organization to provide its merchants with easy access to capital through preapproved offers based on their sales on the platform. Merchants who accept these offers and utilize the capital can increase their sales volume. This growth, in turn, boosts the number of orders processed through the interviewee’s platform, leading to a 20% increase in GMV and an incremental operating profit of €1.3 million over a three-year period.
A 70% reduction in merchant churn. By offering efficient and straightforward access to capital through finmid, the interviewee’s organization empowers small businesses to stay operational, grow, and remain loyal. Merchants use this capital to address critical issues and alleviate financial stress, which strengthens their relationship with the platform. As a result, the organization evolves into a financial partner. This shift leads to a 70% reduction in the merchant churn rate, resulting in an incremental operating profit of €1.4 million over three years.
An incremental operating profit of €983,000 from cash advance markups. For every €1 funded through finmid, the interviewee’s organization not only generates additional sales on their platform but also earns an extra operating profit margin from the markup (e.g., €0.02) on the funded amount. This leads to an incremental operating profit of €983,000 over three years.
Unquantified benefits. Benefits that are not quantified for this study include:
A seamless merchant experience. The finmid infrastructure for embedded financing solutions enhances both the merchant financing experience compared to traditional banks and their overall platform experience, resulting in a Net Promoter Score℠ of more than 80.3 Merchants experience simple cash advance acceptance processes through an intuitive embedded interface, straightforward applications, short wait times, and transparent cost overviews.
Comprehensive geographical coverage. The interviewee’s organization prioritized geographical coverage when selecting a partner since they serve niche markets across Europe. Although many vendors offer similar products, finmid distinguishes itself with broad geographical reach and agility in supporting niche regions without requiring a large-scale customer base. In addition to major European markets, finmid also serves areas in Central, Southern, and Eastern Europe, which historically have had limited or fragmented small and medium enterprises financing. This responsiveness and alignment with the geographical needs of the interviewee’s organization were key factors in its decision.
Ease of integration. The interviewee emphasized the ease of integration with finmid, noting that their internal development team seamlessly incorporated finmid using its full set of APIs. This integration enabled them to create a product that aligns with their existing platform experience and automate data sharing.
Reliable customer service. The interviewee mentioned that finmid’s product is user-friendly and intuitive, requiring limited support. Nevertheless, they noted that their organization can rely on finmid to provide merchants with support and expert advice on financing specifics. For example, if a merchant has questions or needs assistance with cash advances, account managers can use a live chat channel where finmid experts are available to provide prompt and accurate answers.
Costs. Three-year, risk-adjusted PV costs for the interviewee’s organization include:
Implementation costs of €77,000. The implementation costs for the interviewee’s organization consist of the internal effort required for the finmid deployment. The interviewee’s organization allocates 11 internal stakeholders from various departments (e.g., fintech, product, legal, finance), each with different levels of involvement, over a two-month period.
Ongoing management costs of €847,000. Management costs for the interviewee’s organization include 50% of one product lead’s time, along with four developers who are dedicated to enhancing the merchant experience further, increasing customization, and unleashing the full potential of finmid’s financing solution. The organization also expands cash advances to other segments, including couriers and non-food-related shops from Year 2 onward.
The financial analysis that is based on the interview found that the interviewee’s organization experiences benefits of €3.7 million over three years versus costs of €924,000, adding up to a net present value (NPV) of €2.8 million and an ROI of 306%.
Return on investment (ROI)
Benefits PV
Net present value (NPV)
Payback
Forrester interviewed a product lead who has experience using finmid at their organization. Their organization has the following characteristics:
The interviewee’s organization is a fast-growing technology company that is headquartered in Europe and operates in 30 countries. The company is known for its food and merchandise commerce platform that connects three key groups: customers (who purchase food, groceries, and other goods), merchants (such as local restaurants, grocery stores, and non-food-related shops), and couriers (who deliver the food or goods to customers).
The organization aims to empower local merchant partners by providing them with easy and flexible access to capital, helping them build resilient businesses and alleviate financial stress caused by limited access to funds from traditional banks. In turn, the organization seeks to reduce merchant customer churn, add new revenue streams, and boost merchant loyalty.
With more than 10,000 employees across Europe, Asia, and America, the platform recorded more than 700 million customer orders, €15 billion in local merchant sales, and €3 billion in earnings for more than 400,000 courier partners over 10 years.
The interviewee highlighted that many of their organization’s merchant partners were struggling to return to pre-pandemic sales levels. Several businesses were forced to close, resulting in a high churn rate among merchants on the platform. This situation stemmed from a combination of financial, operational, and structural challenges, including:
Rising costs. Many merchant partners experienced rising costs for raw materials and operations, as well as unpredictable staffing issues. Furthermore, they were often underserved by traditional financing providers, such as banks, which frequently lacked the capabilities to assess their business models fully.
Dysfunctional financing applications. The financing application process was often lengthy, stressful, and prone to errors. Consequently, merchant partners often found themselves without the capital needed to cover operating expenses, invest in growth, restock inventory, and remain resilient in the face of unexpected costs.
Merchant challenges considerably influence B2B platforms because they contribute to a heightened churn rate. The merchant-level issues create a cascade of effects that pose financial, operational, and strategic difficulties for the interviewee’s platform, including:
Revenue erosion from merchant churn. The departure of each merchant leads to a decline in transaction volume, subscription fees, and commission income, resulting in a substantial reduction in recurring revenue.
High cost of replacement. Additionally, replacing lost merchants often involves higher costs associated with acquiring new customers compared to the expense of retaining existing ones. This churn further diminishes the average customer lifetime value for each merchant, thereby complicating long-term investment strategies in areas such as onboarding, support, and product development.
The interviewee’s organization searched for a solution that could:
Enhance the support provided to merchants by delivering a more efficient and user-friendly financing experience with quick and easy access to cash advances that would empower merchants to replenish inventory, spearhead growth, and maintain active operations.
Provide extensive geographical coverage while assisting with regulatory complexities to support the platform’s current operations and future expansion plans.
Distinguish the platform from competitors by appealing to and retaining merchants who expect a modern, full-service digital ecosystem.
Create new revenue opportunities through earned interest, fees, or revenue sharing from the embedded finance provider.
A prominent European food and merchandise commerce platform has noticed that many of its merchant partners, especially restaurants, are struggling to return to pre-pandemic sales levels. These businesses are experiencing financial stress due to rising costs and limited access to capital from traditional banks, resulting in many closures. This situation has led to a high rate of merchant churn and a decline in recurring revenue.
To address these challenges, the organization aims to support local businesses in its operational regions by providing a financing solution that offers straightforward and flexible embedded cash advances. This initiative is designed to empower merchants to build resilient businesses and achieve sustainable growth, encouraging them to stay with the platform over the long term.
To implement this solution, the organization has chosen to partner with finmid and utilize its modular lending infrastructure. Unlike other competitors considered, finmid offers broader coverage of countries and currencies, aligning with the organization’s expansion plans. This partnership will enable the organization to provide merchants with preapproved cash advance offers based on their sales performance on the platform.
2,400 orders placed through the interviewee’s platform per merchant per year
€30 average order value per merchant
25% initial merchant churn rate
800 merchants accept a preapproved cash advance offer in Year 1
€10,000 average funded amount per merchant through finmid
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Incremental profit from increased GMV | €207,360 | €653,184 | €814,666 | €1,675,210 | €1,340,401 |
| Btr | Reduced customer churn | €217,728 | €685,843 | €855,360 | €1,758,931 | €1,407,392 |
| Ctr | Incremental profit from new revenue streams | €152,000 | €478,800 | €597,170 | €1,227,970 | €982,547 |
| Total benefits (risk-adjusted) | $577,088 | $1,817,827 | $2,267,196 | $4,662,111 | $3,730,340 |
Evidence and data. The product lead reported a 20% increase in their organization’s GMV, driven by finmid’s embedded cash advance solution. The capital lent to merchants helped alleviate financial stress, promoting resilience and sustainable growth. As a result, this led to increased sales through the platform.
The interviewee noted that their organization conducted an analysis to understand the impact of cash advances on merchants. They discovered that those who accepted cash advances saw an increase in sales, leading to a higher number of orders generated through their platform. The product lead reported that merchants utilized the funds to address various challenges, such as purchasing new equipment, renovating venues, developing new products, or building financial resilience. Ultimately, the organization registered a 20% increase in overall GMV generated by merchants who accepted cash advance offers.
Modeling and assumptions. Based on the interview, Forrester assumes the following:
The organization pilots a solution with 800 food-related merchants across five different markets, averaging 160 merchants per market, who accept preapproved cash advance offers based on their sales on the platform in Year 1.
Ninety percent of the merchants who accept these preapproved cash advance offers in Year 1 renew their access to capital in Year 2. Additionally, the organization significantly expands cash advances to food-related merchants in 10 new markets (averaging 160 merchants per country) and pilot the financing solution with 225 non-food-related merchants across 15 markets (averaging 15 merchants per country). This results in a total of 2,520 cross-industry merchants with access to capital in Year 2.
Ninety percent of the merchants who accept preapproved cash advance offers in Year 2 renew access to capital in Year 3. In addition, the organization expands cash advances to five new markets (averaging 160 food-related merchants and 15 non-food-related merchants per country). This results in a total of 3,143 cross-industry merchants with access to capital in Year 3.
Each merchant generates an average of 2,400 orders through the interviewee’s platform per year.
The average order value is €30.
Forrester applies an operating margin of 10%, which is typical for platforms and online retailers.
Risks. The actual financial benefit will vary between organizations depending on the following factors:
Number of merchants that accept preapproved cash advance offers.
Number of orders generated by those merchants per year and their average order value.
An organization’s operating margin.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €1.3 million.
Increase in gross merchandise value
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Merchants that accept preapproved cash advance offers through finmid | Interview | 800 | 2,520 | 3,143 | |
| A2 | Average orders per merchant before access to cash advances | Interview | 2,400 | 2,400 | 2,400 | |
| A3 | Average order value | Interview | €30 | €30 | €30 | |
| A4 | Total GMV from merchants before access to cash advances | A1*A2*A3 | €57,600,000 | €181,440,000 | €226,296,000 | |
| A5 | Increase in GMV from merchants after access to cash advances | Interview | 20% | 20% | 20% | |
| A6 | Incremental GMV from merchants after access to cash advances | A4*(1+A5) | €69,120,000 | €217,728,000 | €271,555,200 | |
| A7 | Platform commission rate | Research data | 20% | 20% | 20% | |
| A8 | Operating profit margin | Research data | 10% | 10% | 10% | |
| At | Incremental profit from increased GMV | (A6-A4)*A7*A8 | €230,400 | €725,760 | €905,184 | |
| Risk adjustment | ↓10% | |||||
| Atr | Incremental profit from increased GMV (risk-adjusted) | €207,360 | €653,184 | €814,666 | ||
| Three-year total: €1,675,210 | Three-year present value: €1,340,401 | |||||
Evidence and data. The product lead emphasized that by providing efficient and straightforward access to cash advances, the organization not only enabled small businesses to stay operational and grow but also cultivated long-term loyalty. The interviewee noted that after launching finmid’s embedded financing product, they observed a significant improvement in merchant retention, resulting in a 70% decrease in the overall merchant churn rate. As merchants recognized the advantages of streamlined access to capital, the organization evolved into a financial partner that helped local businesses thrive in various regions. Consequently, the organization mitigated the challenges associated with the high rate of merchant departures, particularly among restaurants, including revenue loss.
Modeling and assumptions. Based on the interview, Forrester assumes the following:
The interviewee’s organization has a merchant churn rate of 25% prior to launching its partnership with finmid.
After partnering with finmid, the interviewee’s organization experiences a 70% reduction in merchant churn rate, from 25% to 8%. As a result, the platform retains an additional 140 merchants in Year 1, 441 in Year 2, and 550 in Year 3.
On average, a single merchant generates €17,280 of revenue for the organization per year.
Forrester applies an operating margin of 10%, which is typical for platforms and online retailers.
Risks. The actual financial benefit will vary between organizations depending on the following factors:
The number of the platform’s merchants that are at risk of going out of business.
An organization’s initial merchant churn rate.
The average revenue generated by a single merchant per year.
An organization’s operating margin.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €1.4 million.
Reduction in merchant churn rate
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | Merchants that accept preapproved cash advance offers through finmid | Interview | 800 | 2,520 | 3,143 | |
| B2 | Merchant churn rate before finmid | Interview | 25% | 25% | 25% | |
| B3 | Reduced merchant churn rate due to access to cash advances through finmid | Interview | 70% | 70% | 70% | |
| B4 | Merchant churn rate after finmid | B2-(B2*B3) | 7.5% | 7.5% | 7.5% | |
| B5 | Additional merchants retained due to access to cash advances through finmid | (B1*B2)-(B1*B4) | 140 | 441 | 550 | |
| B6 | Average revenue per merchant | (A6*A7)/B1 | €17,280 | €17,280 | €17,280 | |
| B7 | Operating profit margin | Research data | 10% | 10% | 10% | |
| Bt | Reduced merchant churn | B5*B6*B7 | €241,920 | €762,048 | €950,400 | |
| Risk adjustment | ↓10% | |||||
| Btr | Reduced customer churn (risk-adjusted) | €217,728 | €685,843 | €855,360 | ||
| Three-year total: €1,758,931 | Three-year present value: €1,407,392 | |||||
Evidence and data. The product lead shared that they unlocked a new revenue stream through a revenue share agreement with finmid. Specifically, for every €1 that finmid funded, the organization generated additional operating profit from the markup on the total amount funded.
Modeling and assumptions. Based on the interview, Forrester assumes the following:
Eight hundred merchants across various markets accept preapproved cash advance offers based on their sales performance on the platform. This number increases to 2,520 in Year 2 and 3,143 in Year 3.
The average funded amount per merchant through finmid is €10,000.
The revenue share agreement through finmid allows the organization to earn a markup of 2% on the total founded amount.
Risks. The actual financial benefit will vary between organizations depending on the following factors:
The number of the platform’s merchants that accept preapproved cash advance offers.
The average funded amount per merchant.
The portion of revenue finmid shares as part of the revenue share agreement.
An organization’s operating margin.
Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €983,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Merchants that accept finmid preapproved offers | Assumption | 800 | 2,520 | 3,143 | |
| C2 | Average funded amount through finmid per merchant | Assumption | €10,000 | €10,000 | €10,000 | |
| C3 | Total funded amount through finmid | C1*C2 | €8,000,000 | €25,200,000 | €31,430,000 | |
| C4 | Markup on funded amount | Research data | 2% | 2% | 2% | |
| C4 | Earned markup on funded amount (direct margin) | (2%*C3) | €160,000 | €504,000 | €628,600 | |
| Ct | Incremental profit from new revenue streams | C4 | €160,000 | €504,000 | €628,600 | |
| Risk adjustment | ↓5% | |||||
| Ctr | Incremental profit from new revenue streams (risk-adjusted) | €152,000 | €478,800 | €597,170 | ||
| Three-year total: €1,227,970 | Three-year present value: €982,547 | |||||
The interviewee mentioned the following additional benefits that the organization experienced but was not able to quantify:
A seamless merchant experience. The product lead noted that finmid has significantly enhanced the overall merchant experience on their platform by delivering an exceptional financing experience that addresses common challenges with traditional financial institutions. Merchants had often expressed frustration with the traditional bank financing application process, which can involve complex and lengthy paperwork, slow approval times, low approval rates, rigid requirements, and a lack of transparency. In contrast, finmid has streamlined the application process by eliminating unnecessary complexities and wait times. The organization offered preapproved cash advance offers and featured a simple three-click onboarding process. Consequently, merchants benefited from a seamless approval experience that is fully integrated into the platform. They also received a clear and predictable overview of costs, along with flexible repayment options tailored to their sales performance. As a result of these improvements, merchant satisfaction increased significantly, reflected in an NPS of more than 80.
Comprehensive geographical coverage. The interviewee’s organization placed a strong emphasis on geographical coverage when selecting a partner, as it operates in smaller and often underserved markets across Europe. A thorough evaluation of various vendors offering products similar to finmid revealed that finmid distinguished itself through its comprehensive geographical reach in merchant financing within the region. The finmid organization was readily able to cover major and underserved markets, particularly in Central, Southern, and Eastern Europe. The interviewee noted that when discussions were held with other vendors about supporting plans to enter niche markets, those vendors frequently displayed reluctance or were only amenable to the idea under specific conditions. In contrast, finmid expressed a strong commitment to addressing niche markets and supporting the organization’s expansion objectives. This level of responsiveness and dedication to fulfilling the organization’s geographical requirements played a crucial role in the interviewee’s decision-making process.
Ease of integration. The interviewee emphasized the ease of integration with finmid, noting that their internal development team seamlessly incorporated finmid using its full set of APIs. This integration enabled them to create a product that aligns with their existing platform experience. Additionally, they automated data sharing, ensuring a smooth user experience while allowing for flexible design. For organizations that prefer not to fully embed the solution into their platforms, finmid offers two alternatives: a low-code option that allows users to integrate finmid’s iframe into their interface while finmid manages the tailored iframe flow, and a zero-code option, which is particularly recommended for pilot programs. In the zero-code option, finmid hosts the complete solution on a subdomain specified by the organizations.
Facilitating A Seamless User Experience
The interviewee shared that the product flow for providing merchants with access capital through finmid was fast and straightforward. They provided a typical example of the experience:
The platform sends anonymized merchant data and historical performance information to the finmid API, which generates a preapproved offer by scoring the business.
After scoring, the finmid API notifies the platform’s backend upon offer creation and provides an embedded link. The platform’s frontend then integrates the cash advance offer with a dynamic user interface.
The merchant accesses the offer through the frontend and decides to accept or reject it. Upon acceptance, the merchant grants finmid consent to collect additional personally identifiable information via APIs (e.g., Know Your Business data). The merchant receives the funds in their account within 48 hours.
The organization can choose to collect payments from merchants and retain a commission or let finmid handle the payment collection directly.
After the merchants pays at least 60% of the outstanding amount, finmid automatically generates performance-based renewal offers with improved terms and greater financial flexibility compared to the initial offer.
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement finmid and later realize additional uses and business opportunities, including:
Scalability across industries and market segments. The product lead observed that after successfully providing local-related merchants with embedded financing solutions through finmid, they began to explore the potential of customizing this solution for other sectors or market segments. For example, couriers might require financing to invest in new vehicles. They also explored the idea of offering cash advances to non-goods shops, as finmid supports additional industries such as retail, commodities, agriculture, and real estate.
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Impact Approach).
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Dtr | Implementation costs | €76,577 | €0 | €0 | €0 | €76,577 | €76,577 |
| Etr | Ongoing management costs | €0 | €155,584 | €443,872 | €443,872 | €1,043,328 | €841,764 |
| Total costs (risk-adjusted) | $76,577 | $155,584 | $443,872 | $443,872 | $1,119,905 | $918,341 |
Evidence and data. The product lead observed that implementing finmid’s embedded financing solution was brief and straightforward, with most of the technical responsibilities handled by finmid. The interviewee’s organization incurred internal labor costs for the implementation, as it allocated some FTEs from various departments, each with different levels of involvement, over a two-month period. The FTEs and their roles were as follows:
The product lead oversaw the entire implementation process.
Two developers from the fintech team focused on the technical aspects, such as the repayment structures.
FTEs from the legal and finance teams participated in regular meetings throughout the implementation period to ensure compliance regarding data sharing via APIs.
Tax experts were involved to understand the implications of implementing cash advances.
Modeling and assumptions. Based on the interview, Forrester assumes the following:
The interviewee’s organization allocates 100% of a product lead’s time to manage the end-to-end implementation. The fully burdened hourly rate for a product lead is €52.
The interviewee’s organization allocates 50% of two developers’/programmers’ time to focus on the technical elements of the implementation. The fully burdened hourly rate for a developer/programmer is €42.
The interviewee’s organization allocates 20% of eight FTEs’ time from various departments (e.g., legal, finance, customer success) to assess the impact on compliance, taxes, and merchant experience. The average fully burdened hourly rate for the extra FTEs involved is €67.
Risks. The actual costs can vary depending on the following factors:
The time and effort required for the implementation.
The average employee salaries, which depend on experience and location.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €77,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| D1 | FTEs leading the implementation | Interview | 1 | |||
| D2 | Percentage of time dedicated to implementation by the leading FTEs | Interview | 100% | |||
| D3 | Fully burdened hourly rate for a leading FTE | Interview | €52 | |||
| D4 | Technical FTEs needed for implementation | Interview | 2 | |||
| D5 | Percentage of time dedicated to the implementation by technical FTEs | Interview | 50% | |||
| D6 | Fully burdened hourly rate for a technical FTE | Interview | €42 | |||
| D7 | Extra FTEs involved in the implementation | Interview | 8 | |||
| D8 | Percentage of time dedicated to the implementation by extra FTEs | Interview | 20% | |||
| D9 | Fully burdened hourly rate for an extra FTE | Interview | €67 | |||
| D10 | Duration of the implementation process (working hours) | Interview | 346 | |||
| Dt | Implementation costs | (D1*D2*D10*D3)+(D4*D5*D10*D6)+(D7*D8*D10*D9) | €69,615 | €0 | €0 | €0 |
| Risk adjustment | ↑10% | |||||
| Dtr | Implementation costs (risk-adjusted) | €76,577 | €0 | €0 | €0 | |
| Three-year total: €76,577 | Three-year present value: €76,577 | |||||
Evidence and data. The product lead highlighted that finmid is a solution that operates independently in the background, requiring minimal management effort. As their organization grew and recognized the potential of finmid’s solution, they assigned a dedicated team of developers to fully leverage the benefits of embedded finance. For example, their developers concentrated on further improving the merchant experience, enhancing customization options, and preparing to expand the offering to other sectors, such as courier services and non-food businesses.
Modeling and assumptions. Based on the interview, Forrester assumes the following:
The interviewee’s organization allocates 50% of two developers’/programmers’ time to manage the solution in Year 1 after the implementation and pilot period. In Years 2 and 3, the organization collocates four of them to mature the product, scale adoption, and enhance user experience further.
The fully burdened hourly rate for a developer/programmer is €42.
The interviewee’s organization allocates 50% of a product lead’s time to oversee the solution over three years.
The fully burdened hourly rate for a product lead is €52.
Risks. The actual costs can vary significantly depending on the following factors:
The time and effort organizations allocate for additional customization depending on their business plans.
Average employee salaries, which depend on experience and location.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of €842,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| E1 | Technical FTEs dedicated to managing finmid | Interview | 2 | 4 | 4 | |
| E2 | Working hours per year | TEI methodology | 2,080 | 2,080 | 2,080 | |
| E3 | Percentage of time dedicated to managing finmid by technical FTEs | Interview | 50% | 100% | 100% | |
| E4 | Fully burdened hourly rate for a technical FTE | Interview | €42 | €42 | €42 | |
| E5 | Product FTEs dedicated to managing finmid | Interview | 1 | 1 | 1 | |
| E6 | Percentage of time dedicated to managing finmid | Interview | 50% | 50% | 50% | |
| E7 | Fully burdened hourly rate per product FTE | Interview | €52 | €52 | €52 | |
| Et | Ongoing management costs | (E1*E2*E3*E4) + (E5*E2*E6*E7) | €0 | €141,400 | €403,520 | €403,520 |
| Risk adjustment | ↑10% | |||||
| Etr | Ongoing management costs (risk-adjusted) | €0 | €155,584 | €443,872 | €443,872 | |
| Three-year total: €1,043,328 | Three-year present value: €841,764 | |||||
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | (€76,577) | (€155,584) | (€443,872) | (€443,872) | (€1,119,905) | (€918,341) |
| Total benefits | €0 | €577,088 | €1,817,827 | €2,267,196 | €4,662,111 | €3,730,340 |
| Net benefits | (€76,577) | €421,504 | €1,373,955 | €1,823,324 | €3,542,206 | €2,811,999 |
| ROI | 306% | |||||
| Payback | <6 months |
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
From the information provided in the interview, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in finmid.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that finmid can have on an organization.
Interviewed finmid stakeholders and Forrester analysts to gather data relative to finmid.
Interviewed a decision-maker with experience using finmid at their organization to obtain data about costs, benefits, and risks. Gathered testimonials from customers of the interviewee’s organization regarding their experience with the interviewee and finmid.
Constructed a financial model representative of the interview using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewee.
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Benefits represent the value the solution delivers to the business. The TEI methodology places equal weight on the measure of benefits and costs, allowing for a full examination of the solution’s effect on the entire organization.
Costs comprise all expenses necessary to deliver the proposed value, or benefits, of the solution. The methodology captures implementation and ongoing costs associated with the solution.
Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. The ability to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows.
The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made unless other projects have higher NPVs.
A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.
The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.
The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists solution providers in communicating their value proposition to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of business and technology initiatives to both senior management and other key stakeholders.
1 Source: Make The Most Of The Embedded Finance Opportunity, Forrester Research, Inc., November 14, 2024.
2 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists solution providers in communicating their value proposition to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of business and technology initiatives to both senior management and other key stakeholders.
3 Net Promoter and NPS are registered service marks, and Net Promoter Score is a service mark, of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
4 “Company” refers to information that is assumed for modeling purposes based on the interview.
Readers should be aware of the following:
This study is commissioned by finmid and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in finmid.
Finmid reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.
Finmid provided the customer name for the interview but did not participate in the interview.
Corrado Loreto
August 2025
ABOUT FORRESTER CONSULTING
Forrester provides independent and objective research-based consulting to help leaders deliver key transformation outcomes. Fueled by our customer-obsessed research, Forrester’s seasoned consultants partner with leaders to execute on their priorities using a unique engagement model that tailors to diverse needs and ensures lasting impact. For more information, visit forrester.com/consulting.
© Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies.
https://mainstayadvisor.com/go/mainstay/gdpr/policy.html
PDF