Embedded finance means adding financial services, like payments, lending, insurance, or wallets, directly into non-financial apps and platforms. In the world of Web3, this often involves using decentralized finance (DeFi) tools in a way that feels natural to users. These services are built into digital products so smoothly that people often don’t realize they’re using a financial feature at all.
As Web3 adoption grows, embedded finance is becoming a key part of how crypto and blockchain tools are used in everyday apps – from marketplaces to super-apps, SaaS tools, and gig platforms.
In this article, we’ll look at how embedded finance works in Web3, explore real-world examples across different industries, and highlight the latest trends and technologies driving this space forward.
Want a deeper dive into embedded finance and why it matters for businesses, developers, and users? Read our full feature here.
How Web3 Solutions Differ From Traditional Embedded Finance
The goal of embedded financial Web3 solutions is the same as in traditional embedded finance, but it’s achieved using blockchain technologies. For example, instead of a bank issuing loans, a DeFi protocol can be used, and instead of transmitting data through a centralized server, it’s recorded on a distributed ledger.
The depth of integration also differs. Financial functions are programmed at the smart contract level. This enables the automation of many processes, such as condition verification, interest calculation, or payment execution. Additionally, decentralized technologies are typically open-source and designed for interoperability. This makes them modular, so developers can combine ready-made blockchain solutions.
Web3 solutions are inherently global and self-sufficient – transactions are processed through blockchain networks that aren’t bound by political borders and require no intermediaries. This reduces costs and speeds up settlement. For instance, cross-border payments using stablecoins are virtually free, with processing fees around $0.01.
A key difference between traditional and Web3 solutions remains the complexity of the latter for the average user. Service providers are working to remove this barrier using several approaches, including:
- Integration of cryptocurrency wallets
- Replicating familiar user experiences (UX)
- Simplifying the process by delegating some user-side functions to the provider
All of this allows for adaptable solutions tailored to specific user journeys. For example, a trading platform may offer options ranging from automated debits via wallet connections to manual payments via QR code — all mimicking the familiar flow of mobile banking transactions.
In essence, embedded financial Web3 solutions differ from Web2 approaches in the same way digital assets differ from fiat currencies.
Key Features of Embedded Financial Web3 Solutions
Web3 embedded finance aims to strike a balance between decentralization and regulatory compliance. This leads to the rise of hybrid systems, where the frontend and data collection resemble those of traditional providers, while the backend operates entirely on blockchain.
The degree of decentralization can vary. In an ideal scenario, a Web3 solution is fully powered by smart contracts, eliminating the need for centralized intermediaries. In practice, however, mixed models are often used: for example, key storage may be split between the user and the service, and transactions may be aggregated through centralized gateways for faster processing. Additionally, a FinTech provider may store customer data centrally while processing transactions via smart contracts, without holding user funds on its own balance sheet.
Examples of Embedded Financial Web3 Solutions
Web3 solutions are entering a wide range of industries, augmenting traditional business models with new financial capabilities. Let’s explore several notable directions and use cases.
Payment Tools
A key trend in recent years has been the issuance of crypto cards, linked on one end to a crypto wallet and on the other to credentials within payment systems like Visa or Mastercard. The most common implementation involves virtual cards that can be connected to Google Pay, Apple Pay, or similar services, enabling online payments or contactless transactions via POS terminals. For the user, the experience mirrors traditional payment methods, but the funds are debited from a crypto address instead of a bank account.
Examples of such products include:
E-commerce
In the e-commerce sector, there’s a growing trend to integrate crypto payments as a standard checkout option. For example, e-commerce platform Shopify has integrated support for the USDC stablecoin across millions of merchants in 34 countries. This payment option is available through Stripe Connect and doesn’t require additional integration. It works seamlessly with Shopify Payments and the popular Shop Pay feature.
DeFi Lending
DeFi protocols offer open lending and yield models that can be embedded into apps. These solutions enable traditional commerce platforms to adopt decentralized versions of BNPL or post-payment systems backed by crypto-assets. For instance, over 70 credit unions in the U.S. gained access to The Digital Banking Network in late 2024, a blockchain banking protocol that expands the use of digital assets for creating innovative credit products.
Decentralized Insurance
Decentralized insurance protocols are still in their early stages but are gaining traction. Projects like Nexus Mutual, InsurAce, and Bridge Mutual are actively operating and being integrated into other Web3 solutions. In the future, these products could mirror traditional embedded insurance by offering coverage directly during the payment process. Smart contract-based decentralized policies would enhance transparency through blockchain oracles and automate the entire claims process.
Growth of Embedded Web3 Financial Solutions
Analysts project that embedded finance transaction volumes in the U.S. could reach $7 trillion by 2026, accounting for over 10% of all payments. Globally, platform revenue from embedded financial services may grow from $21 billion in 2021 to $51 billion by 2026. Related services, including insurance, tax, and accounting solutions, are also expected to grow rapidly due to the low starting base.
Decentralized solutions may become the next major growth driver in embedded finance thanks to their advantages. This is confirmed by venture investment statistics – even in 2022–2023, when hype around decentralized solutions cooled, total investments in blockchain startups exceeded $20 billion, with a significant portion directed at infrastructure projects that enable embedding Web3 functions into mainstream products.
Embedded Web3 financial solutions are already a core component of various decentralized sectors such as GameFi, SocialFi, NFTs, and more. As these technologies continue to mature and regulatory frameworks become more clearly defined, embedded decentralized finance will increasingly become an essential, though invisible, part of the user experience in the digital economy.
