What Is Embedded Finance and How Is It Reshaping Business Payments?

Are your customers dropping off at checkout because they’re sent to a clunky third-party payment page? What if you could offer a seamless payment experience — right inside your website or app — while also opening up new revenue streams? That’s what embedded finance makes possible.
 
Embedded finance is creating real opportunities for small business owners. It can simplify how you take payments, make it easier to connect with your customers, and even open up new revenue streams. So, what is embedded finance and why might it matter to you? Let’s break it down.

• Embedded finance enables non-financial businesses to offer financial services to customers without building the in-house payment architecture. 
• These systems seamlessly integrate into apps, websites, or platforms your customers already use.
• Businesses that adopt embedded finance solutions can improve customer experiences and add new revenue opportunities.
• To utilize embedded finance, partner with a service provider that offers integrations tailored to your unique needs and regulatory requirements. 

What Is Embedded Finance?

In its simplest form, embedded finance is the seamless integration of financial services — such as payments, insurance, and even lending — directly into non-financial platforms. Instead of sending users elsewhere, embedded finance enables everything to happen in one place.

Embedded finance presents a lucrative opportunity for businesses in non-financial industries. Now, these businesses can leverage embedded finance to offer a wide array of financial tools without having to build the complex infrastructure themselves.

For example, say you run a contractor scheduling app. With embedded finance, homeowners can not just schedule, but also pay for services directly on your app. Through a payment gateway integration, the app could embed payment processing directly in its interface — streamlining the contractor’s workflow, enhancing the homeowner’s user experience, and increasing the app owner’s revenue stream via a small percentage of each transaction.

What Are Some Examples of Embedded Finance?

Embedded finance includes a variety of financial solutions. Let’s explore some below. 

Payment solutions are one of the most widely used forms of embedded finance. As a form of integrated payments, this solution enables a holistic user experience in which customers don’t have to leave a website, app, or platform to make a payment for goods or services. One of the pioneers in embedded payments is Shopify. The company offers an all-in-one financial account that allows store owners to receive customer payments directly within the portal. 

Buy now, pay later (BNPL) options are an example of embedded lending, through which customers can access financing directly at the point of sale. Much like embedded payments, embedded lending integrates financing directly into your platform for a seamless user experience. This can increase sales and win customers who prefer to split their payments over time. Some popular companies that offer embedded loans as BNPL solutions include Afterpay, Affirm, and Klarna. 

Embedded insurance allows customers to buy insurance for big-ticket items at the point of sale. From flight bookings to phone purchases, embedded insurance lets customers to protect their purchases at checkout. This enables customers to purchase insurance when and where they need it, instead of dealing with a separate insurance provider later. 

What Are the Key Drivers Behind the Growth of Embedded Finance?

The rapid growth of embedded finance isn’t driven by luck or fad. Several factors are fueling embedded finance as a must-needed solution for businesses that accept digital payments, including:

• Technological Advancements: Thanks to APIs (application programming interfaces), it’s now much easier for non-financial businesses to connect with financial systems — without building complex infrastructure from scratch. Many APIs plug directly into payment gateways, making it simple and secure to process transactions.
• Changing Consumer Expectations: Gone are the days when customers settled for less-than-ideal shopping experiences. Today’s customers — who grew up with one-click shopping and lightning-fast websites — expect an enhanced shopping experience from start to finish. Businesses that offer seamless payment methods have the edge in customer retention and sales. 
• Convenience in Digital Transactions: The digital payments market is expected to reach a staggering $20 trillion in 2025.^[1]Statista. Payments – Worldwide. Accessed June 18, 2025. With more and more customers preferring to shop online, offering value-added services like financing options and insurance coverage is an excellent way for businesses to improve conversion rates. 

Who Are the Key Players of Embedded Finance?

Embedded finance is a massive ecosystem that includes multiple players. Below, we explore some of the biggest participants in this space.

Within embedded finance, these companies offer the core digital infrastructure that allows businesses to embed financial services on their platforms. They provide payment APIs and cloud platforms for integrating financial tools, middleware solutions that manage the integration, and off-the-shelf solutions for businesses to deploy on the front end.

Examples: Unit, Bond, Railsr, Treasury Prime, and Synapse. 

These companies integrate financial services directly into their existing products to benefit their customers. By utilizing embedded finance, these companies deliver added value to their customers and generate new revenue streams. They may also offer buy-now-pay-later solutions to help customers manage their finances more effectively. 

Examples: Shopify, Amazon, and QuickBooks.

As authorized financial institutions, these companies provide the actual financing products, like credit cards, loans, or insurance. They take on the risks of offering embedded services to non-financial companies and handle the regulatory compliance requirements. 

Examples: JPMorgan Chase, Intuit, Column, and HSBC.  

Financial technology companies build the tools that bring embedded finance together to offer actionable solutions. For example, a lending fintech might offer BNPL solutions you can integrate into your checkout page. An insurance fintech might provide customized insurance plans that you can include in your customers’ purchase flows. 

Examples: Stripe, Chime, PayPal, and Affirm. 

Benefits and Challenges of Implementing Embedded Finance for Businesses

While there’s no doubt about the powerful benefits of implementing embedded finance solutions, it also has its share of challenges.

Business owners may struggle to find industry-specific embedded solutions that support their regulatory requirements and customer needs. For example, an embedded solution for retail checkouts might not work well for healthcare services. This is where the silver lining emerges. By solving these niche industry issues with tailored embedded payment solutions, software businesses can unlock entirely new, specialized revenue streams. 

For many small and mid-sized businesses, the financial technology side of things can be a real challenge. Without a dedicated team, rolling out new payment systems isn’t just hard — it can be risky. A rushed setup could open the door to security issues, unexpected costs, or even damaged customer trust.

That’s why a lot of businesses choose to team up with a payment solutions provider. Instead of building everything from the ground up, they get access to reliable, ready-to-go tools that plug right into their existing software.

The Future of Embedded Finance Across Industries

Embedded finance isn’t just a passing trend. It’s a major shift that’s opening up real opportunities for innovation and growth across all kinds of industries. Businesses across all industries and especially those offering software solutions are finding smart ways to integrate financial services directly into their products. As competition heats up, the businesses that embrace embedded finance early are better positioned to stand out, run more efficiently, diversify revenue streams, and stay strong for the long haul.

Unlock the Future of Finance with Embedded Finance Solutions

When businesses embed financial services directly into their core offerings, it can lead to smoother customer experiences, stronger loyalty, and new ways to generate revenue. Wondering how embedded payments could work for your business? At PaymentCloud, we get that every business is different. That’s why we offer customized integration solutions designed to upgrade your payment systems and support your growth. Take a look at what we offer and see how we can help take your business to the next level.

Easy Integrations. Connect our payment solutions with your software.

I want my free quote