Today, users of online platforms often interact with embedded financial services – sometimes without even realizing it. From seamless payment options at checkout to integrated insurance offers or buy-now-pay-later features, embedded finance is becoming an invisible yet essential layer of the digital experience.
In this article, we’ll take a closer look at how embedded finance works, the technologies driving it, and why it’s being rapidly adopted across industries around the globe.
What Is Embedded Finance
For modern users, the ability to pay for an order on any marketplace feels like a given, but it wasn’t always this way. Not long ago, making a payment, applying for an installment plan, or purchasing insurance meant switching to third-party websites, filling out lengthy forms, dealing with banks directly, and often handling everything manually. Financial processes were a separate, complex, and inconvenient step.
Embedded finance refers to the integration of financial services into non-financial platforms.
This concept has transformed how users interact with financial tools, turning them into a seamless part of the customer experience. Applying for an installment plan when buying a smartphone, receiving instant refunds on canceled bookings, or purchasing travel insurance alongside a plane ticket – all of this is now standard, as financial services have become tightly woven into the core of the product or service.
How Does Embedded Finance Work
Unlike traditional financial solutions, embedded finance allows users to complete transactions without leaving the website or app they’re using.
Technically, embedded finance relies on ready-made modules provided by FinTech platforms via APIs. A partner company integrates a specific module into its product, and the user sees a branded interface when making a payment or applying for financing, but the operations are handled by the service provider behind the scenes.
This setup eliminates the need for companies to obtain a financial license, as the provider assumes full responsibility for payment processing, account management, risk handling, compliance, and more.
What Types of Embedded Finance Exist
Embedded finance includes several core service types.
Payments
Integrated payment systems allow users to make purchases effortlessly, often without even noticing the transaction itself. Businesses can securely store customer payment details to speed up future transactions, improving user experience and boosting conversion rates.
Lending
Buy Now, Pay Later (BNPL) models offer installment plans directly at the point of purchase. Shoppers can split payments into multiple parts, while sellers still receive funds immediately. Embedded lending also includes loans for service providers – for instance, sellers on a marketplace can request credit for inventory directly through the platform.
Insurance
Insurance products are offered as part of the primary checkout process, such as travel insurance during flight bookings or device insurance when buying a smartphone. This makes insurance more accessible, letting users add coverage with a single click.
Internal accounts
Apps increasingly offer users digital wallets, internal balances, or savings features. In super-apps, users can top up a balance, pay for rides, order food, and send money – all within one ecosystem, without involving external banks. These features give companies greater control over financial flows, lower transaction costs, and foster user loyalty.
In Which Sectors Is Embedded Finance Used
Embedded finance is gaining ground across multiple industries, with particularly strong adoption in services and retail.
E-Commerce, Marketplaces, and Retail
In e-commerce, embedded financial services are now the norm. Marketplaces use them to raise average order values and reduce purchase friction.
Amazon is a prime example. At all company platforms worldwide, integrated payments are available, along with branded credit offers for buyers and sellers, and for certain products, installment plans can be arranged directly on the site. The company uses a hybrid system, leveraging both its own solutions, like Amazon Pay, and third-party financial service providers.
Other giants like Walmart are also adopting embedded payment systems and partnering with BNPL services. Marketplaces such as Etsy, Allegro, Bonanza, and others offer installment payments and instant loans for buyers.
For sellers, large marketplaces integrate financing services. Amazon, for example, provides partner businesses with fast-growth loans, setting credit limits based on their platform revenues.
SaaS and B2B Services
In the software production sector (Software-as-a-Service), embedded finance is becoming a new value driver for products. Such products gain a competitive advantage by enabling users to optimize financial processes and extract additional financial benefits. Cloud accounting or ERP systems allow users to not only manage accounts but also send payments to contractors, pay taxes, or receive financing – all within a single interface.
These solutions are already being implemented. For instance, German company SAP launched an Embedded Finance module in 2023 for the direct integration of banking services into its software. Many Western accounting platforms integrate business account opening, overdrafts, and loans – a small business lacking working capital in the accounting system can request a loan online. HR platforms add salary advance features for employees – again, an embedded financial service. Such integrations make B2B solutions more self-sufficient: small and medium businesses get a one-stop window for operations, while SaaS providers increase their product value and generate additional income from commission fees.
Online Services and Platforms
Gig economy companies were among the first to recognize the benefits of embedded finance. Taxi and courier services operating via apps not only embed payment acceptance for users but also provide financial services for their contractors. For example:
- Lyft, a taxi service, offers drivers instant payouts to their own cards
- DoorDash, an American food delivery service, allows couriers to instantly withdraw earnings to debit cards for a small fixed fee
- Uber launched an instant payout system and even issues debit cards for drivers in partnership with banks, so drivers can immediately spend their income
Freelance marketplaces are also following this path. The world’s largest platform, Freelancer.com, partners with OpenPayd to offer users virtual accounts and local banking details worldwide, while Payoneer’s partnerships enable freelancers to receive payments from international clients to specialized accounts with subsequent card withdrawals. Additionally, insurance products are increasingly embedded into platform ecosystems, either included in the price or offered as optional add-ons for users.
How Do Embedded Finance Solutions Impact Business
Beyond convenience for contractors and users, embedded finance allows businesses to leverage new opportunities for customer retention and increasing average order value. According to Accenture, embedded financial services could account for up to 25% of banks’ revenues from servicing small and medium-sized enterprises (SME) in 2025, equivalent to approximately $124 billion.
The global embedded finance market reached $92 billion in 2024, according to Juniper Research. By the end of this year, it has the potential to grow to about $146 billion, and within five years, it could reach around $690 billion, with a CAGR of 36%, according to Research and Markets.
Analysts identify the main drivers of embedded finance market growth as:
- Digitization of the user experience
- Development of API infrastructure
- The desire to simplify payments
It can be stated that embedded finance is already becoming an integral part of digital products, enabling companies to strengthen customer loyalty, increase revenue, and streamline financial processes. Thanks to the development of such solutions, any service can offer users full-fledged financial services while remaining a non-financial organization. This trend is already transforming the market, and in the coming years, embedded finance will become the standard for the vast majority of digital platforms.
Curious how embedded finance is evolving in the world of Web3? Explore our deep dive into Web3-native embedded financial solutions.
