Embedded finance
Embedded finance is integrating financial services (payments, lending, insurance) into non-financial products via APIs.
Embedded finance is the trend where non-banks offer financial features as product features. Uber integrated driver payments; Shopify offers Shopify Capital (loans); Klarna embeds BNPL on every shop. Underlying infrastructure (BaaS) makes this possible without holding a bank licence yourself. Expected by 2030: a large share of financial services will reach end-users via non-banks.
Example
A B2B marketplace offers direct invoicing with 30-day payment terms for buyers while sellers are paid immediately. The marketplace takes no bank risk — a fintech partner (Fabrick, YouLend) provides the credit facility as embedded service.
Frequently asked questions
Is embedded finance regulated?
Yes. The end service falls under bank/PSP regulation; the embedding party must have a BaaS partner or its own licence.
Related terms
Further reading
- → Our service: Fintech sector