The Revolution Inside Your Favourite App Made By Embedded Finance
Ever noticed how you can buy, pay or even get a loan without leaving the app you are using?
That’s embedded finance, the force that changed fintech more than so many technology trends in the past decade.
What started as a “pay in one click” experience became a full-scale transformation of how financial products are built and delivered. By 2025 embedded finance has blurred the lines between tech, banking and commerce so much that we barely notice where one ends and the other begins.
But let’s rewind a bit. To see how we got here, it’s worth remembering what fintech looked like before pretty much everything got embedded.
Before The Merge: When Fintech Lived In Silos
In the early 2010s, fintech was all about standalone apps. You had one app for payments, another for investments, another for loans. Each managed its own users, compliance and integrations – all of it. That model worked well, but only to a point, because the world can’t stand still, never.
Banks still controlled the rails, APIs were quite rare and every new product had to build its own payment logic. It was innovative back to the days, yes, but was it scalable?
The dream of frictionless finance existed, the work was there, it is just the technology and regulation simply hadn’t caught up. Yet.
The Shift: APIs, Open banking And New Infrastructure
Open banking regulations started appearing in 2015. Regulatory changes like Payment Services Directive (PSD2, officially adopted in October 2015 and implemented in January 2018) in Europe made it legal and safe to share financial data through APIs.
Carding attacks are back in style, with smarter bots and stolen card lists. If your payment form has no velocity checks or CAPTCHA, you’re a target. Token misuse is a growing issue. Especially when developers don’t rotate or validate tokens properly.
Companies like Marqeta, Solarisbank and Stripe turned complex banking operations into modular tools that any platform could use. The effect was immediate.
Out of a sudden, any company from a retail app to a logistics platform could plug financial features directly into its product.
Real-World Examples Of Embedded Finance In Action:
- Shopify Capital gives merchants instant working capital, originating around $3 billion in merchant funding in 2024;
- Uber Wallet lets drivers manage earnings without switching apps;
- Apple Pay integration with Affirm (after discontinuing its own Apple Pay Later service in June 2024) brings buy-now-pay-later directly into the iPhone checkout flow through trusted partners.
This was the turning point. Finance stopped being a separate destination and became something you could just plug into whatever you were already building. Embedded finance transformed fintech from standalone innovation into a layer that could sit inside anything.
What Exactly Changed In Fintech
Embedded finance added convenience, but the most important thing is that it rewired fundamental aspects of the financial system.
What changed across the entire fintech landscape?
- Distribution. Financial products moved to where users and potential clients already are. Instead of customers finding banks, banks came to the customer through retail, SaaS and marketplaces. The “fight” for customer attention moved from “build a better banking app” to “integrate into platforms customers already trust”.
- Customer ownership. The relationship now belongs to the platform, not the financial institution. A ride-sharing company or e-commerce marketplace owns the trust and data, while banks provide regulated rails behind the scenes.
- Speed. Onboarding, verification and lending decisions that used to take weeks now happen in minutes thanks to APIs and machine learning.
- Monetisation. Fintech companies found new ways to make money: earning a percentage on every transaction, charging for instant access to credit, and selling insurance right when customers need it—like trip coverage when booking a flight.
- Risk and compliance. Regulatory responsibility is now shared between platforms and banks. Both are liable when something goes wrong, which is why understanding fintech compliance became critical. Shared risk means shared accountability.
The Numbers Behind The Shift
Let’s ground this in actual data:
- Current market size: The global embedded finance market reached approximately $104.8 billion in 2024 and is projected to reach $588.49 billion by 2030, according to Global Market Insights and Grand View Research.
- United States market: The US embedded finance market surpassed $29.5 billion in 2024 and is projected to reach $468 billion by 2034.
- Business impact: the latest PYMNTS report shows that embedded finance is demonstrating value by improving financial outcomes (cited by 86% of firms) and strengthening customer ties by 75%.
This is a global scale infrastructure adoption and fintech is no longer the exclusive domain of licensed institutions. It is across every industry, from retail to healthcare to logistics.
The Benefits Of Embedded Finance For SaaS And Digital platforms
If you are running a SaaS product, embedded finance can do more than streamline payments.
It can improve retention, lower churn and add revenue.
For example:
- Invoicing apps offering instant payouts keep freelancers on the platform instead of switching to competitors with faster access to earnings;
- Marketplaces providing seller insurance or buy-now-pay-later at checkout reduce friction at the point of purchase, directly impacting conversion rates;
- Workforce platforms enabling early wage access solve a real pain point for gig workers, increasing both usage and loyalty.
Each adds value and revenue without building a separate product. That’s why the benefits of embedded finance for SaaS platforms directly impact user experience and lifetime value, when the technical foundation is built right.
The Next Chapter: Contextual And AI-Driven Finance
New layers like contextual finance are already emerging – when services predict what users need before they ask.
Think payroll systems offering smart tax adjustments, subscription apps suggesting right-sized credit limits or AI-based cashflow forecasts that help small and medium enterprises avoid overdrafts before they happen.
At the same time, regulation is evolving. The European Commission’s Financial Data Access regulation (FIDA) is moving through final negotiations, with implementation expected to begin in 2027. FIDA aims to expand open banking principles across all financial sectors. Not just payments, but also insurance, investments, and pensions.
So, yes, embedded finance changed fintech. But the transformation isn’t over as AI and compliance frameworks evolve side by side.
What This Means For Businesses
No, the takeaway isn’t that everyone needs to “build a fintech”
It is that any trusted digital platform can integrate financial functionality and do it safely.
For startups that’s a shortcut to monetisation. Instead of building financial infrastructure from scratch, you plug into existing licensed providers. For enterprises it’s a strategy for deeper engagement. Keeping users inside your platform by solving their financial needs increases lifetime value. For fintechs, it’s a reminder that infrastructure is where the next competitive edge lies.
Embedded finance changed our relationship with money itself. Finance is no longer a destination. It’s part of the journey.
And the best part?
You probably used embedded finance today without even noticing it.
Related Lerpal articles:
Online Payments and Security 2025
Fintech Compliance
Implementing Embedded Finance
Ready to explore embedded finance for your platform? Contact our team to discuss how we can help you build secure, compliant and scalable financial features.
