Embedded Finance: The Invisible Revolution in Payments

Imagine a world where making payments is as natural as sending a text message, where financial services are woven into the fabric of every digital touchpoint. This is the promise of embedded finance: a silent transformation reshaping how we shop, dine, travel, and run businesses.

Unpacking the Embedded Finance Phenomenon

At its core, embedded finance is the integration of financial services into everyday tools that people already use. Rather than switching between banking apps and commerce platforms, users can complete transactions directly within the experiences they enjoy.

Powered by sophisticated APIs (application programming interfaces), this approach goes well beyond traditional Banking as a Service. It places lending, insurance, payments, and investment capabilities right where the customer’s attention is focused, delivering seamless and embedded payment experiences without redirects or multiple logins.

Explosive Market Growth and Projections

The numbers behind this movement are staggering. In 2023, the global embedded finance market was valued at $83.32 billion, rising to nearly $92 billion in total transaction value by 2024. Projections anticipate a market size of $107.27 billion in 2024, followed by an astonishing leap to $588.49 billion by 2030, driven by a CAGR of 32.8%. Alternative forecasts suggest a $370.9 billion valuation by 2035 at a CAGR of 15.8%.

On the transaction side, embedded finance already accounted for $2.6 trillion—or almost 5% of all US financial transactions—in 2021. This figure is expected to exceed $7 trillion by 2026, representing over 10% of total US transaction value. A World Economic Forum report even envisions a $7.2 trillion embedded finance ecosystem by 2030.

Driving Forces Behind the Revolution

• Widespread smartphone and internet access, making digital payments ubiquitous
• Rapid fintech innovations that lower barriers to entry
• Evolving consumer expectations for frictionless, personalized digital interactions
• Macroeconomic pressures—rising rates and inflation—accelerating cash conversion
• Small business demand for streamlined cash flow and embedded solutions

Unlocking Value: Benefits for Customers and Businesses

Embedded finance unlocks unprecedented advantages on both sides of the ledger, creating new efficiencies and revenue streams.

• For Customers: Convenience through one-click checkouts, flexible installment plans, and personalized financial insights.
• For Businesses: Reduced operational costs, cost-reduction and risk-mitigation benefits, enhanced customer loyalty, and new monetization models.

Real-World Transformations

Leading brands have already embraced embedded finance to deliver richer, more engaging experiences. In Asia, WeChat’s digital wallet allows users to split bills, pay merchants, and send peer-to-peer transfers without leaving the chat interface. Apple Pay exemplifies how digital wallets can permeate device ecosystems, enabling quick in-store and online payments across millions of merchants.

The buy now, pay later sector is another vivid illustration: Klarna, Affirm, and Afterpay are projected to process $576 billion in transactions by 2026, with over half of surveyed organizations reporting a 25% boost in revenue thanks to BNPL integrations.

• WeChat: Seamless peer-to-peer transfers in messaging
• Apple Pay: Integrated digital wallet across devices
• Klarna, Affirm, Afterpay: Explosive BNPL growth
• Ramp: Corporate cards and expense management for businesses

Charting the Future: Opportunities and Outlook

As embedded finance matures, the spotlight is shifting toward business-to-business offerings. The B2B payments market is forecast to hit $33.3 trillion by 2026, with embedded B2B payments alone surging from $0.7 trillion to $2.6 trillion. Lending volumes may expand fivefold, reaching $50–75 billion, while account-to-account transfers could near $850 billion by 2026 at a 13% CAGR.

Emerging sectors such as insurance, tax services, and accounting are poised for integration next, opening doors to transformative market opportunity well beyond payments and lending. Platforms like Marqeta are providing modular APIs for cards, accounts, and value-added ACH, making it easier than ever to embed tailored financial solutions.

With a projected $51 billion market opportunity in the US alone, and global forecasts ranging up to $7.2 trillion by 2030, embedded finance represents one of the most significant shifts in fintech history. By 2026, we expect a tipping point where embedded B2B services match or exceed consumer adoption, redefining how companies manage cash flows and engage customers.

The invisible revolution has only just begun. Organizations that embrace embedded finance today will unlock new growth, delight users with effortless payment journeys, and seize a competitive edge in a landscape where financial services fade into the background. The future of payments is embedded, and its potential is limitless.