Embedded finance allows non-banks to offer financial services—like payments, lending, and insurance—without becoming banks themselves. They do this through Banking-as-a-Service (BaaS) partnerships and API connections with licensed banks. The licensed bank handles regulatory requirements, while the non-bank company delivers the customer experience. This approach is growing fast: the embedded finance market is projected to reach USD 155.96 billion in 2026 and surge to USD 454.48 billion by 2031, growing at a CAGR of 23.84%.
And here's how you (and your customers) can use embedded finance to enhance the customer experience and drive growth for your businesses.
What is Embedded Finance?
Embedded finance refers to the integration of financial tools into non-financial applications and websites. This makes services more accessible and convenient for users. This approach is similar to banking as a service (BaaS), but it focuses on providing these tools directly to consumers within the platforms they regularly use. This eliminates the need to switch between different applications.
With BaaS, fintech companies can develop and integrate financial services through technologies like APIs. Embedded finance takes this concept a step further. It incorporates these financial capabilities into the products or services where customers already spend their time online.
Rather than visiting separate financial websites or apps, embedded finance brings those financial tools directly to wherever customers shop, travel, get rides, and more. It integrates banking into the platforms they already use regularly. Managing money doesn't disrupt their workflow and, instead, operates seamlessly in the background.
How BaaS Enables Non-Banks to Offer Banking Products
Non-bank companies can offer financial services through several key mechanisms:
- API integration: Companies connect to a licensed bank's infrastructure through APIs. This lets them access banking functions without building them from scratch.
- White-label solutions: Banks provide ready-made financial products that companies can brand as their own.
- Regulatory compliance via bank partners: The licensed bank holds the banking charter and handles compliance with regulations like KYC (Know Your Customer) and AML (Anti-Money Laundering). This means non-banks don't need their own banking license.
- BIN sponsorship: Banks sponsor access to card network BINs (Bank Identification Numbers). This allows non-banks to issue branded debit or credit cards.
- Speed-to-market: Instead of years of development, companies can launch financial products in weeks or months.
Types of Banking Products Non-Banks Can Offer
Through embedded finance, non-bank companies can offer a wide range of financial products:
- Payments: Digital wallets, payment processing, and money transfers (43.68% of embedded finance market share in 2025)
- Lending and credit: Buy now, pay later, point-of-sale financing, and credit cards
- Banking: Checking accounts, savings accounts, and debit cards
- Insurance: Embedded coverage for purchases, travel, and more
- Investment: Fractional shares, robo-advisory, and savings tools
What Kinds of Businesses Integrate Embedded Finance?
Many types of companies are adding financial services to their platforms:
- Fintechs: Digital-first companies building financial products
- Retailers and e-commerce: Online and brick-and-mortar stores offering branded cards and financing
- Gig economy platforms: Rideshare and delivery apps providing instant payouts
- SaaS platforms: Business software adding expense management and payments
- Healthcare providers: Medical practices offering payment plans
- Telecommunications: Mobile carriers adding digital wallets and banking
- Travel companies: Airlines and booking sites with embedded insurance and payments
Five Use Cases of Embedded Finance
Embedded finance has the potential to transform how people experience and interact with money across various industries. Here are five real-world examples of embedded finance in action.
1. E-commerce
In the e-commerce world, embedded finance transformed the way consumers search for great deals online. With just a few clicks, customers can purchase almost anything through e-commerce platforms. This process also presents opportunities for businesses to expand the range of products and services they can offer.
For example, embedded finance enables online electronics stores to easily offer tailored insurance to customers during checkout. The benefits of embedded finance are not limited to online-only businesses. Brick-and-mortar stores can also offer branded credit cards or use embedded finance to provide secure, one-click payments through their apps. This saves time for both customers and staff while speeding up service. Embedded finance companies play a crucial role in this ecosystem by facilitating integrated financial services through various categories, including technology providers and banking institutions.
Case study: Shakepay
Cryptocurrency platform Shakepay recently partnered with Marqeta to launch a prepaid Visa debit card that rewards cardholders with Bitcoin instead of traditional cashback. Customers can fund their cards using personal bank accounts or by selling cryptocurrency. They receive up to 2% in Bitcoin rewards when shopping online or in-store. The Shakepay card attracted over 70,000 customers at launch, with that number nearly doubling shortly after.
Thanks to Marqeta, creating innovative payment products involving crypto is now a reality, helping Bitcoin become more mainstream and accessible to all consumers.– Roy Breidi, CTO and Co-Founder, Shakepay
2. Peer-to-Peer Payments
Embedded finance simplifies the process of sending money to friends. It integrates payment capabilities into the apps and websites that customers frequently use.
Consider a scenario where passengers need to split the cost of a ride share with their friends. Instead of sending the money to one person who then pays the total fare, they could split the cost directly from their rideshare app. Everyone pays their share of the fare instantly.
Similarly, if a coworker covered the cost of lunch for the entire team, they could be quickly reimbursed. Embedded payments within their team's communication platform or social media app eliminate the need to switch between different apps. WeChat, a popular messaging app in China, exemplifies this concept by offering a digital wallet that enables peer-to-peer money transfers.
This embedded approach streamlines everyday financial interactions with others. It cleverly integrates payment capabilities into the platforms where people naturally connect and communicate.
3. Point-of-Sale Financing
When shopping in-store, customers may sometimes find that the total cost exceeds their planned spending. However, leaving empty-handed is not always an option. Point-of-sale financing through embedded finance can provide a solution.
Embedded finance allows stores to collaborate with financing providers to offer customers convenient payment options at checkout. These banking services provide seamless integration of financial solutions. They help enhance user experience and streamline financial operations. Instead of foregoing a large purchase, such as a new refrigerator, customers can take the item home and pay in more manageable monthly installments.
One notable example of a business using embedded finance to revolutionize the checkout experience is Klarna. This pioneering fintech company enables over 85 million shoppers across 200,000 merchants to "buy now, pay later" with ease.
Klarna's innovative solution eliminates the hassle of applying for traditional credit. Customers can seamlessly split their payments into installments without the need for tedious forms. This embedded financing option streamlines the online checkout process.
By partnering with Marqeta, Klarna can quickly generate virtual cards for each shopper. This facilitates secure and frictionless purchases across any online store or marketplace.
Since the beginning of their partnership in 2019, Klarna has witnessed its quarterly transaction volumes double, thanks to empowering customers with Marqeta's embedded payment technology.
4. Digital Wallets and Banking
Digital wallets simplify money management for consumers. When coupled with embedded finance, customers can store funds, make payments directly from their bank account, and handle banking directly within apps and websites. This eliminates the need to switch between different financial apps and tools.
This creates a seamless and simplified financial experience that is integrated into online activities. Moving money in and out, checking balances, and making purchases can be done instantly without leaving the platform. Apple Pay is a prime example of an embedded digital wallet. It's found within the Apple Wallet app but is also embedded across the company's ecosystem of devices. Customers can store cards, add tickets, and make purchases wherever Apple Pay is accepted.
Some apps even allow customers to quickly generate virtual debit or credit card numbers for secure online purchases. All of this is housed within the integrated digital wallet. Embedded finance is transforming the way people interact with and manage their money in the digital realm.
5. Insurance
Insurance claims can be a frustrating process. They often involve extensive paperwork, long wait times to speak with agents, and lengthy delays in receiving payouts. However, embedded finance has the potential to alleviate these issues. It seamlessly integrates insurance into the apps people already use daily.
With virtual insurance card technology, payouts can be issued almost instantly to a digital card or account controlled by the customer. This eliminates the need to anxiously wait for weeks to receive a reimbursement check.
Travel companies are also leveraging embedded insurance for scenarios such as lost luggage or canceled flights. The compensation process is built directly into their app's financial services. Customers can easily submit a claim with a single tap, without the need for additional logins or separate workflows.
Challenges and Considerations
While embedded finance offers significant opportunities, companies should be aware of key challenges:
- Regulatory compliance: Companies must ensure their bank partners maintain proper KYC (Know Your Customer) and AML (Anti-Money Laundering) processes. Data privacy regulations like GDPR and CCPA also apply.
- Third-party reliance: Depending on bank partners and technology providers creates operational risk. If a partner has issues, your financial services may be affected.
- Data security: Handling sensitive financial data requires robust security measures and ongoing vigilance.
- Customer trust: Users need confidence that their money and data are safe, even when financial services come from non-traditional providers.
The Future of Embedded Finance
Embedded finance represents the future of money management. It integrates financial tools into digital experiences to remove friction and unify banking into a seamless journey. This technology enables modern, user-friendly ways to earn, spend, and move money.
As this innovative approach continues to spread, embedded finance will reshape customer experiences across industries and open up new revenue opportunities for businesses. Companies can launch tailored embedded financial solutions through platforms like Marqeta. Our platform combines modular APIs for accounts, cards, payments, and more, providing businesses with the flexibility to design and control custom financial experiences.
Businesses can unlock new possibilities with Marqeta powering their embedded finance journey. We offer a proven platform that enables companies to stay at the forefront of this transformative technology and deliver cutting-edge financial experiences to their customers.
So, ready to unlock new growth opportunities for your business, your workers, and your customers? Then contact Marqeta today to learn how to put our embedded finance solutions to work in the real world for all of them.
