The global embedded finance market is expected to expand from USD 115.8 billion in 2024 to USD 251.5 billion by 2029, registering a Compound Annual Growth Rate (CAGR) of 16.8%. This growth is driven by the increasing demand for hybrid financial services, enabling users to seamlessly access financial solutions within non-financial sectors. Additionally, advancements in digital infrastructure and supportive government initiatives are further accelerating the adoption of embedded finance across various industries.
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The embedded finance market is experiencing a massive disruption because of the development of technologies such as API, AI, blockchain, etc. This capability allows companies to incorporate financial services into their platforms, delivering consistent and unique solutions. Furthermore, demand for new complex, value-added, readily available services that can be offered in real-time has pressured firms in almost all industries to embrace embedded finance. This shift helps non-financial firms to provide banking, lending, insurance, and payment services, which fortifies customer relations and generates more revenues. This market is divided into segments based on different aspects, such as the type, business model, and industry. Type includes solutions such as embedded payments, embedded lending, embedded insurance, embedded investment/wealth management, and others such as issuance and deposits. The business model includes both B2B and B2C. The industry segment focuses on retail & eCommerce, healthcare, education, telecom, transportation, mobility and logistics, travel & hospitality, and other industries, namely real estate, energy, media & entertainment, and agriculture. These segments collectively offer a comprehensive overview of the evolving embedded finance landscape and its potential business implications.
“Based on industry, retail & eCommerce sector to hold the largest market size during the forecast period.”
The research identified several drivers that would make the retail and e-commerce sector the most significant market for embedded finance throughout the forecast period, including the steady growth in online purchasing coupled with the rising number of digital consumers requires effective financial services integrated into the e-commerce platforms; BNPL products increase consumers’ purchasing capacity, leading to increased spending. Personalization capabilities enable retailers to offer customized financial products to their customers, enhancing satisfaction and loyalty. Secure payment gateways and other algorithms in fintech underline smooth transaction processes, leading to higher consumer confidence. An omnichannel approach that integrates both online and offline experiences has financial services that help improve the shopping experience. Growing cooperation between fintech and retailers helps to achieve significant integration and compliance with the requirements to introduce new services. At the same time, the growth of mobile commerce enhances the demand for integrated mobile payments. Collectively, these factors explain the large market size of the retail and e-commerce segment in the embedded finance market during the forecast period.
“Based on the business model, the B2C model is expected to hold a higher growth rate during the forecast period.”
The B2C model for embedded finance is expected to experience tremendous growth primarily because of the rising customer expectations for integrated and omnichannel financial solutions. The development of digital channels and e-commerce fuels the need for broader implementation. Innovation experiences in fintech, APIs, and AI, for instance, have helped ease integration, lowering entry barriers. Moreover, the strategic B2C model increases customer loyalty and customer retention since it provides them with individualized financial services, thus building lasting partnerships. It also widens the market since consumers who used to be locked out from accessing financial facilities due to various factors can access business ventures. Favorable economic and demographic indicators, such as improved disposable income, especially in emerging markets, as well as enhanced access to the Internet, have also boosted the demand for integrated financial services. These factors have made it evident that the B2C embedded finance model will likely realize faster growth during the forecast period under consideration.
“Asia Pacific is expected to hold a higher growth rate during the forecast period.”
The Asia Pacific region will have the highest growth rate in the embedded finance market for the next forecast period because of several factors. The constantly expanding digitally linked economy due to the rise in Internet connection and smartphone use makes it easier to incorporate financial services into consumer apps. The growth of e-commerce and a continuously increasing volume of online purchases, the development of the middle class and a gradual increase in the available amount of money encourage the desire to have non-cash payment solutions such as digital wallets and BNPL. State programs aimed at developing digital financial services make a helping condition, and significant investments in fintech start-ups and technological development fuel the market’s growth. A large population of the countries in this region presents a substantial demand for financial services. The tech firms collaborate with different institutions and businesses to ensure that financial services are integrated into a universal platform. All these factors combined make it possible to affirm that the Asia Pacific region will maintain a favorable, capturing growth rate in the forecast period.
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Unique Features in the Embedded Finance Market
Embedded finance enables businesses to integrate financial services directly into their platforms, allowing users to access banking, lending, insurance, and payment solutions without needing to visit traditional financial institutions. This frictionless experience enhances customer engagement and convenience.
Unlike traditional financial services, embedded finance extends beyond banks and fintech companies. It is increasingly adopted by e-commerce platforms, healthcare providers, travel companies, and other non-financial industries, making financial services more accessible to users.
The embedded finance market heavily relies on Application Programming Interfaces (APIs) to connect financial services with third-party applications. These APIs facilitate smooth integration, enabling businesses to offer financial products without developing their own banking infrastructure.
With the help of artificial intelligence and data analytics, embedded finance solutions provide personalized financial products based on user behavior, spending patterns, and transaction history. This ensures tailored services such as customized loan offers, insurance plans, and investment options.
Major Highlights of the Embedded Finance Market
Businesses across industries are incorporating embedded payment solutions to enhance customer convenience. Digital wallets, in-app payments, and Buy Now, Pay Later (BNPL) options are becoming widely adopted, transforming the way transactions are conducted.
Embedded finance is no longer limited to banking and fintech companies. Industries such as e-commerce, healthcare, travel, retail, and automotive are integrating financial services to improve customer experience and drive additional revenue streams.
The adoption of API-based solutions is accelerating, enabling businesses to embed financial services effortlessly into their platforms. APIs facilitate seamless connections between businesses and financial service providers, reducing the need for complex banking infrastructure.
Embedded lending is revolutionizing credit accessibility by providing instant financing at the point of purchase. This is particularly beneficial for e-commerce, B2B marketplaces, and gig economy platforms, where quick credit approval enhances purchasing power.
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Top Companies in the Embedded Finance Market
The major vendors covered in the embedded finance market are Stripe, Inc. (US), PayPal Holdings, Inc. (US), Amazon.com, Inc. (US), Plaid, Inc. (US), Klarna Bank AB (Sweden), FIS (US), Visa Inc. (US), Cross River Bank (US), Zeta Services Inc. (US), Marqeta, Inc. (US), Wise Payments Limited (UK), Goldman Sachs (UK), JPMorgan Chase & Co. (US), Alipay+ (China), Unit Finance Inc. (US), Solaris SE (Germany), Parafin, Inc. (US), Belvo (Mexico), Kasko Ltd. (UK), Tint Technologies Inc. (US), Mezu, Inc. (US), Fortis Payment Systems (US), Additiv AG (Switzerland), Galileo Financial Technologies, LLC (US), Trevipay (US). These players have adopted various growth strategies, such as partnerships, agreements and collaborations, new product launches, enhancements, and acquisitions to expand their footprint in the embedded finance market.
STRIPE, INC.
Stripe is a global fintech company that offers payment software solutions for businesses and people to make and receive payments via the Internet or through its mobile applications. The company creates software for the handling of online debit and credit card transactions. Stripe’s support services are divided into application support, sales support, developer support, and analytics support. Its product offerings include Atlas, Billing, Capital, Checkout, Climate, Connect, Corporate Card, Data Pipeline, Elements, Financial Connections, Identity, Invoicing, Payment Links, and many others. As for the company’s presence, Stripe is in San Francisco, Dublin, Paris, London, Ireland, and Tokyo, which arranges its presence in North America, Europe, and Asia. According to the International Labour Organization, the company has 8,016 employees.
PAYPAL HOLDINGS, INC.
PayPal Holdings, Inc. is a global and American-based company that offers an online financial platform that simplifies payments and commerce with merchants and consumers globally. The company only aims at reducing the financial barriers to financial services, enhancing users’ and society’s financial well-being, and expanding access to capital, and economic opportunity for all PayPal consumers, merchants, and other businesses globally. The company collects revenue from two segments: revenues from the actual transaction and quantitative revenues from other related value-added services. Their goal is to enable merchants and consumers to manage and move their money anywhere in the world in the markets we serve, anytime, on any platform, and using any device when sending payments or getting paid, including person-to-person (“P2P”) payments. PayPal believes that effective management of non-financial risks and opportunities, including environmental, social, and governance (“ESG”) topics, helps to create value for stakeholders and deliver on mission and strategy. According to their annual report for the year ended 2023, the revenue reached USD 29,771 billion. The company has 27,200 employees who are actively employed in the company. PayPal is a global company with a presence in different regions, such as Europe, the Middle East, Asia and the Pacific, and North and Latin America.
PLAID, INC.
Plaid, Inc., based in the US, is a leading player in the embedded finance market, providing the infrastructure that enables digital financial services. The company's platform connects various fintech applications with users' bank accounts, facilitating seamless financial data access and transactions. Plaid's technology supports a wide range of services, including payment processing, personal finance management, and lending, by integrating financial services directly into applications. This capability enhances user experiences and drives innovation in the financial sector, making Plaid a crucial enabler of embedded finance solutions.
KLARNA BANK AB
Klarna Bank AB, headquartered in Sweden, is a prominent player in the embedded finance market, specializing in providing seamless financial services integrated into online shopping experiences. Klarna offers a range of solutions, including buy now, pay later (BNPL) options, direct payments, and post-purchase services. By embedding these financial services directly into e-commerce platforms, Klarna enhances customer convenience and flexibility, driving higher conversion rates for merchants. The company's innovative approach to payment solutions positions it as a key contributor to the growth and evolution of embedded finance.
FIS
FIS (US) is a leading provider in the embedded finance market, offering a comprehensive suite of financial technology solutions designed to integrate seamlessly into various business platforms. By embedding banking, payments, and financial management services into non-financial applications, FIS enables companies to enhance their customer experiences and streamline operations. Their advanced technology and broad range of services support businesses in delivering customized financial solutions, driving innovation, and meeting the evolving demands of the digital economy.
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