What is embedded finance?

Embedded finance represents a paradigm shift in the way financial products and services are delivered, integrating them into non-financial platforms. Imagine adding travel insurance through a booking app, securing a small business loan on an accounting platform, or investing in mutual funds via a mobile app—these are all quintessential examples of embedded finance. Here, financial services are not standalone entities but are woven into the fabric of everyday platforms, creating a seamless experience for users.

At its core, embedded finance involves non-banking platforms—such as rideshare apps or travel websites—embedding financial services as value-added offerings. This trend extends to various financial sectors including card issuance, payments, lending, banking, wealth management, and insurance. The outcome is a smooth, integrated experience that aligns perfectly with modern consumers' and businesses' desires for simplicity, convenience, and efficiency.

How does embedded finance work?

The early iterations of embedded finance were often seen in high-value transactions, such as purchasing airline tickets on the carrier’s website or obtaining an auto loan through a car dealership. These initial journeys were typically fragmented, requiring users to be redirected from the merchant's site to a bank's portal to finalize the transaction.

Today, embedded finance has evolved significantly. It now appears in forms like Buy Now Pay Later (BNPL) options on e-commerce platforms, or account onboarding within an app. The entire process is streamlined within the app or site, often completed in just a few clicks.

Embedded finance involves providers who supply the financial products and services; enablers who connect providers of goods or services with distributors, offering the software and regulatory support; and distributors who operate the platforms where consumers shop and interact with built-in financial services.

Think of embedded finance as a smart data platform that brings together the technology infrastructure, industry know-how, licensing and plug-and-play integrations to make payments work behind the scenes.

Who benefits from embedded finance?

Embedded finance is one of those rare instances where everyone can win. Providers can access a low-cost way to reach more customers; enablers can tap into the growing demand for faster, simpler experiences; distributors can boost engagement on their platforms; and end-users can get real-time, personalized financial services — all within existing consumer experiences or business workflows.

Businesses are leveraging embedded finance tools to streamline customer onboarding processes and enhance user engagement. As expectations for personalized, rapid services rise – and with both public and private sectors advocating for greater financial inclusion – embedded finance stands out as a key enabler for accelerating working capital solutions.

As this trend continues to gain momentum, the financial ecosystem has an opportunity to become more integrated, efficient, and user centric.

Learn more about embedded finance:

• Visa Consulting & Analytics: Embedded finance

• From AI to RTP: Top trends shaping 2025 payments

• Visa and Taulia / SAP partner to drive global availability of embedded finance

• Three key trends in payments and commerce in 2024