Embedded Finance Pushes Traditional Banks Behind the Scenes

Embedded finance puts payments, lending, insurance and other financial products inside the software and workflows of non-financial companies. The market initially centered on general-purpose APIs that helped businesses add such services quickly. Providers are now moving deeper into individual industries, tailoring products to sector-specific operations, regulatory obligations and economic models in a bid to improve customer retention and increase the value generated from each relationship.

The latest shift is toward vertical platforms built around how a particular industry operates, replacing broadly standardized integrations with more specialized infrastructure and expertise. Competition is consequently moving beyond the number of financial features offered to the provider’s understanding of sector rules and workflows. The available report information identifies no specific institution, transaction amount, market-growth figure or publication date, leaving no disclosed quantitative milestone to verify.

Embedded finance integrates payments, disbursements, credit and wallets directly into ERP, procurement or industry software, allowing businesses to complete transactions without switching to a bank’s system. A 2025 study by PYMNTS Intelligence and Marqeta found that the model is evolving from an add-on into core infrastructure for B2B platforms, opening new revenue streams from fees and financial services.

On March 12, 2026, PYMNTS published a survey of 30 payments executives at U.S. B2B platforms with annual revenue of at least $500 million. Of those surveyed, 54% reported a direct increase in revenue, rising to 67% among platforms with more than $1 billion in annual revenue. Some 83% had embedded payments, 70% offered disbursements and 57% provided digital wallets. A separate report on April 13 said 58% of small businesses viewed inflation as their main financial challenge in 2025, while the market was projected to grow from $4.1 trillion to $15.6 trillion by 2030.

Embedded finance integrates payments, lending, wallets and other services directly into nonfinancial platforms, evolving from a value-added feature into core FinTech infrastructure. A survey by PYMNTS Intelligence and Marqeta found that every respondent offered at least one such service. Nearly 90% used embedded finance to improve customer experience, while 60% said it helped build trust, making compliance, fraud prevention and data governance critical to further expansion.

PYMNTS reported on March 3, 2026, that 80% of surveyed FinTechs viewed robust compliance as essential to effective innovation. More than half of those offering at least four functions faced difficulties coordinating across departments, while 46% said ongoing operations consumed too many internal resources. On March 11, PYMNTS Intelligence and Green Dot also said CFOs were scrutinizing return on investment, total cost of ownership and long-term obligations. Neither report disclosed specific investment amounts.