Embedded finance (EF) has moved from side project to strategic priority almost overnight. What was once considered more of an experimental add-on is now becoming one of the most powerful growth engines for banks, fintechs, and enterprise platforms. And while Europe currently holds the advantage, the US is learning fast, and is poised to scale embedded finance in ways that could redefine the global market.
Global momentum reflects just how powerful this shift has become. McKinsey’s Global Payments Report shows worldwide payments revenue reaching $2.4 trillion in 2023, growing steadily at 7% annually, fueled in part by the rapid rise of embedded financial services. This global surge provides the backdrop for Europe’s even more pronounced acceleration.
McKinsey forecasts that embedded finance revenues in Europe will surpass €100 billion by 2030, up from €20–30 billion in 2023, already representing around 3% of total banking revenues. EF volumes in the region have expanded three times faster than direct lending over the past decade, and by 2030, embedded channels are projected to drive 20–25% of all retail and SME banking sales, compared to today’s 5–10%.
Together, these global and regional trends paint a clear picture: embedded finance is not only reshaping payments at scale, but also redefining how financial services are distributed, consumed, and monetized in Europe, with valuable lessons for the US market.
Why consumer behavior is accelerating EF growth
European consumers have steadily shifted toward integrated financial experiences. They expect financial services to appear at the moment they need them, whether that’s financing a vehicle, splitting payments at checkout, purchasing insurance within a retailer’s flow, or quickly receiving disbursement payments when they need to call upon an insurance policy.
A McKinsey survey found 40% of consumers now prefer online channels for vehicle financing, demonstrating just how far expectations have moved. BNPL options can boost checkout conversion rates by 20–30%, and one major European retailer saw customers using embedded lending spend 20% more per visit than non-users.
The lesson for US financial institutions is straightforward: frictionless experiences drive adoption, spend, and loyalty. In Europe, poorly executed flows with too many steps see cart abandonment rates soar to 30%, highlighting why UI and UX must be treated as strategic priorities, not just operational details.
European providers have responded by digitizing identity checks, accelerating underwriting decisioning, and embedding financing into the journey instead of redirecting users into external environments. This level of integration is where the US market still has some room to scale.
Why SMEs are becoming embedded finance’s next frontier
For SMEs, embedded finance is rapidly becoming a growth multiplier. The research shows that B2B buyers would quadruple their purchases if financing were seamlessly available at the point of transaction. Yet many US enterprise platforms treat financing as an optional add-on, rather than a growth lever.
In Europe, embedded finance has become a cost-efficient customer acquisition engine. In some European markets, acquiring a qualified SME lending lead through traditional channels is 15–20 times more expensive than acquiring that same lead through an EF partnership.
This economic shift is crucial, as by embedding finance directly into ERP systems, procurement tools, and supplier platforms, institutions can build sticky, high-Loan-To-Value relationships with SMEs while reducing acquisition costs.
A compelling example comes from Inbank in Estonia, which partnered with solar panel installers to offer instant financing for home energy upgrades. It didn’t just simplify the lending process—it also accelerated adoption of sustainable energy solutions, demonstrating how embedded finance can align commercial and societal goals.
What Europe got right: infrastructure, regulation, and collaboration
Europe’s head start isn’t about faster innovation—it’s about infrastructure and coordinated market incentives.
A clearer regulatory framework
Upcoming regulations such as the European Financial Data Access (FIDA) framework, PSD3 and specific consumer credit rules aim to streamline data sharing and creditworthiness assessment. This open-data environment enables lenders, platforms, and payment providers to collaborate with less friction.
By contrast, the US operates within a fragmented landscape. A more unified approach to financial data access could unlock enormous embedded finance potential.
A commitment to interoperability
Europe’s investment in improved APIs, electronic identification schemes, and instant underwriting infrastructure has dramatically lowered integration costs. For banks and fintechs, this means faster go-to-market cycles and simpler onboarding of enterprise partners.
The US has the technological advantage, but it often resides within siloed or proprietary systems. Standardization (through regulation) is the fastest path to scale.
A partnership-first ecosystem
European banks increasingly view EF partners as strategic distributors. Instead of competing with platforms, they collaborate, enabling banks to extend reach while enabling platforms to monetize financial moments.
For US financial institutions, especially those with strong brand trust, this partnership mindset represents a significant growth opportunity.
The shift to real-time data and smarter decisioning
Embedded finance is evolving from simply offering payments or lending to harnessing real-time operational data to unlock new risk models and financial products.
Embedded finance facilitators are seeing a clear trend: businesses are not just adopting embedded tools, they are restructuring how they manage cash flow.
Near real-time insights enable:
- cash-flow-based underwriting
- seasonal performance forecasts
- operational stability signals (supplier stability, customer concentration, recurring revenue)
- enhanced due diligence through complete transaction history
- smarter fraud detection through behavioral patterns
This complements, rather than replaces, traditional underwriting. It creates a fuller, more dynamic picture of financial health which is critical for lending, insurance, and working capital products.
The integrated ecosystem opportunity
Businesses increasingly want unified financial ecosystems too, not siloed tools or disjointed services. A designer of modern banking solutions like Marqeta is uniquely positioned to deliver fully integrated, end-to-end solutions that combine the infrastructure, intelligence, and orchestration required to power next-generation financial experiences. This includes:
Network, bank, and compliance infrastructure
- Deep, trusted relationships with partner banks and BIN sponsors
- Regulatory and compliance orchestration built into the platform
- Tokenization for real time provisioning across the card networks, with fraud and risk detection built in
Card issuing, processing, and lifecycle management
- Virtual, tokenized, and physical cards with full card lifecycle management
- A variety of card funding capabilities
- Disputes management and chargeback workflow automation
Real-time decisioning and risk intelligence
- Real-Time Decisioning (RTD) platform enabling dynamic spend controls
- Predictive fraud detection using behavioral and transaction-level signals
- Customizable rules engines for authorizations, limits, and merchant categories
Data, insights, and operational intelligence
- Real-time data feeds and analytics dashboards
- Operational and financial intelligence drawn from live transactions
- APIs for integrating payment data into broader enterprise decisioning
Developer experience and UX enablement
- A comprehensive UX Toolkit, including Cardholder UI SDK components
- Interactive Voice Response (IVR) tooling for automated customer flows
- Fully documented, developer-friendly APIs and sandbox testing environments
Orchestration across the entire embedded finance stack
- Integration with wallets, financing, and rewards engines
- Configurable workflows for onboarding, KYC, and customer verification
- Enterprise-grade reliability, uptime, and monitoring
The US market, home to global software leaders, massive financial institutions, and highly digitized SMBs is perfectly positioned to capitalize on the next wave. The opportunity is larger than Europe’s, but it requires adopting Europe’s playbook of interoperability, data-driven underwriting, partnership plays and seamless UX.
What the US can learn from Europe
1. Build seamless user experiences
Clunky flows destroy conversion. Europe has invested heavily in UX and minimal friction identity verification. US providers can accelerate adoption by prioritizing integrated, intuitive journeys.
2. Treat platforms as distribution engines
European banks partner with platforms. US banks can unlock scale by viewing platforms as force multipliers rather than competitors.
3. Standardize and open up data
Open-banking-style frameworks fuel European innovation. Data standardization—whether regulatory or industry-led—would accelerate EF adoption in the US.
4. Use real-time operational data to enhance risk models
The opportunity for the US lies in using real-time payments and lending, and the supporting data insights to build smarter, more inclusive financial products.
The path forward: a trillion-dollar opportunity in the making
Embedded finance is redefining how financial services are distributed, consumed, and monetized. Europe’s model shows what’s possible when technology, regulation, and partnerships align.
For banks, fintechs, and enterprise platforms in the US, the opportunity is not to replicate Europe—it is to leapfrog it. By focusing on seamless integration, customer-centric design, and data-driven decisioning, US providers can capture an even greater share of the global embedded finance opportunity.
EF isn’t just reshaping payments and lending. It’s reshaping the digital economy itself. The institutions that act now will define the competitive landscape for the next decade.