Europe Embedded Finance Market Size & Forecast by Value and Volume Across 100+ KPIs by Business Models, Distribution Models, End-Use Sectors, and Key Verticals (Payments, Lending, Insurance, Banking, Wealth) - Databook Q4 2025 Update

The embedded finance market in Europe is expected to grow by 11.1% on an annual basis to reach US$143.2 billion by 2025.

The embedded finance market in the region has experienced robust growth during 2021-2025, achieving a CAGR of 15.5%. This upward trajectory is expected to continue, with the market forecast to grow at a CAGR of 8.0% from 2026 to 2030. By the end of 2030, the embedded finance market is projected to expand from its 2024 value of US$128.9 billion to approximately US$194.6 billion.

Key Trends and Drivers Shaping Embedded Finance in Europe

Embedded finance in Europe is evolving from generic fintech integrations toward deeply verticalized, sector-specific deployments supported by regulatory shifts and maturing infrastructure. Banks and fintechs are converging through partnerships, while licensing and compliance are becoming decisive factors for scale. Over the next 2-4 years, the market is expected to intensify in complexity - driven by regulation (e.g., FIDA, MiCA), ecosystem consolidation, and cross-border infrastructure scaling. As embedded finance moves into investment, insurance, and pension-linked use cases, the European market is poised for a more regulated but innovation-friendly phase of expansion.

Embedded finance is shifting from retail-centric use cases to sector-specific verticals

• Embedded finance in Europe is moving beyond e-commerce and digital retail into more specialized verticals such as healthcare, mobility, agriculture, and B2B services. For instance, French company Alan offers embedded health insurance directly through HR platforms, while German startup GetHenry integrates financing solutions into B2B fleet management for last-mile delivery. This evolution is also evident in fintechs offering embedded lending tailored for industries like travel (e.g., Fly Now Pay Later in the UK) and education.
• Sector-specific digitization, coupled with the API-driven modularity of fintech infrastructure, is enabling this shift. Industry platforms with large user bases - such as Doctolib in healthcare or Flink in food delivery - are seeking to improve customer retention and monetization by embedding financial services natively. Regulation is also enabling this: for example, PSD2 open banking provisions have lowered entry barriers for non-banks to access financial data and offer credit or insurance directly.
• This trend is expected to intensify as more non-financial platforms seek value-added service differentiation. European startups are likely to emerge as enablers of embedded vertical finance, while banks may partner to retain visibility in niche value chains. Use cases in SME insurance, green energy finance, and construction payments are expected to gain traction, especially in markets like Germany, the Netherlands, and the Nordics.

Banks and fintechs are collaborating to co-develop embedded finance infrastructure

• Rather than competing, many traditional banks in Europe are now collaborating with fintechs to enable embedded finance use cases. For example, BBVA has partnered with several fintechs to offer Banking-as-a-Service (BaaS) products, while Solaris (Germany) and Treezor (France, owned by Société Générale) continue to offer white-labeled banking infrastructure to embedded finance providers.
• Banks are under regulatory and capital constraints that make direct consumer acquisition costlier. By leveraging fintech partnerships, they can access new distribution channels without building digital frontends. Simultaneously, fintechs gain from regulatory compliance and license coverage provided by the banks. The consolidation of BaaS providers across Europe is also pushing smaller players to align with larger banking institutions to survive.
• Expect a convergence of roles: more banks will operate as infrastructure providers, and fintechs will handle UX and sector-specific customizations. However, regulatory scrutiny around BaaS - especially after the Wirecard fallout - may lead to tighter oversight by the European Banking Authority (EBA) and national regulators. This may consolidate the BaaS ecosystem further, favoring well-capitalized platforms with strong compliance.

Regulation is catalyzing open finance ecosystems across the region

• Europe’s regulatory environment is actively fostering embedded finance through open finance and data-sharing mandates. The EU’s proposed Financial Data Access (FIDA) framework, an extension of PSD2, is expected to create a unified financial data space, paving the way for embedded financial products beyond payments - such as wealth management, pensions, and insurance.
• The European Commission aims to increase competition and interoperability in financial services. Open banking under PSD2 created the initial foundation; FIDA is designed to expand access to more financial datasets across institutions. Regulatory frameworks like the Digital Operational Resilience Act (DORA) and MiCA (Markets in Crypto-Assets Regulation) are also harmonizing compliance expectations, making it easier for embedded finance players to operate cross-border.
• The rollout of FIDA (expected by 2026) will likely expand embedded finance use cases into retirement planning, investment advice, and insurance claims management. Pan-European embedded finance models could emerge, especially among insurtech and wealthtech platforms that rely on granular user financial data. However, adoption will depend on the national implementation pace and digital maturity of incumbent financial institutions.

Consumer protection and licensing requirements are tightening, especially in BNPL and embedded credit

• Embedded credit - particularly Buy Now, Pay Later (BNPL) - has come under increasing regulatory scrutiny in Europe. Countries like the UK are finalizing BNPL-specific rules, while others like Germany, France, and the Netherlands are closely watching consumer debt accumulation from embedded loans offered at the point of sale. Several providers, including Klarna, Zilch, and Scalapay, have had to adjust practices due to national regulator interventions.
• Consumer debt levels, lack of transparency in repayment terms, and limited creditworthiness checks have triggered regulatory concern. Policymakers across the European Union, FCA (UK), and BaFin (Germany) are increasingly treating embedded credit products like traditional loans, requiring proper affordability checks, risk disclosures, and licensing. The rise of non-bank entities offering credit without oversight has also created systemic risk concerns.
• This trend is likely to stabilize embedded credit in Europe but with higher compliance burdens. Larger platforms with credit licensing - such as Klarna or banks offering white-labeled BNPL - will adapt, while smaller players may exit or consolidate. We may also see a pivot toward embedded debit or installment savings products as alternatives, especially in countries with stricter consumer protection mandates.

Infrastructure players are consolidating and scaling across borders

• Europe’s embedded finance infrastructure landscape is seeing horizontal and vertical consolidation. Pan-European BaaS providers like Railsr (UK), Bankable, and Treezor are expanding into new markets or merging to create full-stack capabilities. At the same time, sector-specific infrastructure platforms (e.g., Weavr for B2B finance, Upvest for wealthtech APIs) are raising funding and scaling across borders.
• Regulatory fragmentation across EU member states has historically limited embedded finance scalability. Infrastructure providers are responding by acquiring licenses in multiple jurisdictions (e.g., e-money licenses in Ireland, Lithuania, or Luxembourg) and investing in compliance automation. Venture capital backing has also shifted toward infrastructure enablers that offer modular, API-first solutions to non-fintech businesses.
• The region will see fewer but more robust infrastructure providers with pan-European service coverage. This will lower barriers for smaller platforms to launch embedded financial services while maintaining regulatory compliance. However, infrastructure resilience, cross-border payment capabilities, and licensing clarity will remain critical success factors.

Competitive Landscape in the Embedded Finance Market in Europe

Europe’s embedded finance competitive landscape is becoming structurally more layered and dynamic. Infrastructure players are scaling across geographies and verticals, fintechs are maturing into ecosystem orchestrators, and traditional banks are repositioning as service providers or regulated enablers. M&A activity and licensing have emerged as core strategic levers, with regulatory compliance no longer a back-office function but a front-line differentiator. Over the next 2-4 years, the ecosystem is likely to consolidate around well-capitalized, multi-country operators with clear licensing footprints, strong compliance narratives, and vertical specialization.

Embedded finance competition is intensifying across infrastructure and distribution layers

• The embedded finance market in Europe is witnessing heightened competition at both the infrastructure (Banking-as-a-Service, payments, APIs) and application layers (BNPL, embedded insurance, wealth, etc.). Infrastructure providers such as Solaris (Germany), Treezor (France), and Weavr (UK) are competing for partnerships with non-financial platforms, while BNPL players like Klarna (Sweden), Scalapay (Italy), and Zilch (UK) are expanding their footprint in consumer-facing segments.
• At the same time, tech-forward incumbents such as Revolut and Wise are embedding their own financial products into broader consumer ecosystems, creating blurred lines between enabler and competitor. The result is a fragmented but dynamic landscape, with multiple players occupying overlapping value chains and vying for platform integrations.

Infrastructure platforms are scaling pan-Europe, while new vertical enablers are emerging

• Pan-European BaaS platforms such as Railsr, Bankable, Treezor, and Mambu continue to build out their infrastructure across payments, cards, lending, and compliance tooling. Weavr, a UK-based embedded finance startup, raised $40M in 2023 to expand its “plug-and-play” finance solutions across verticals like HR, healthcare, and SaaS platforms.
• New vertical enablers are also entering niche segments. For example, Upvest (Germany) is offering investment APIs for embedded wealthtech use cases, while CoverGo (headquartered in Singapore but active in Europe) is powering embedded insurance across B2B platforms. Additionally, local banks in countries like Spain, the Netherlands, and the Nordics are launching their own BaaS arms to retain market share against tech-native players.

Regulatory changes and licensing developments

• Regulatory oversight has become a strategic differentiator, especially in light of BaFin’s intensified scrutiny of BaaS players in Germany and the broader EBA recommendations on outsourcing in the fintech ecosystem. Platforms like Solaris have had to restructure internal processes to retain license viability and client trust.
• Additionally, companies like Mambu and Treezor are increasingly marketing their licensing coverage (e.g., e-money licenses in multiple EU jurisdictions) as part of competitive differentiation. The UK’s Financial Conduct Authority (FCA) has also signaled stricter requirements for BNPL players, prompting firms like Zilch to secure full consumer credit licenses ahead of formal rule enforcement. Going forward, embedded finance platforms will need to demonstrate not only product innovation but robust compliance, data privacy, and anti-money laundering (AML) infrastructure to stay competitive.

Competitive dynamics are expected to consolidate and polarize by specialization

• Over the next two to four years, the European embedded finance landscape is expected to polarize into three clusters:

1) scaled infrastructure providers offering full-stack BaaS across borders;
2) vertical-specific enablers focusing on insurance, wealth, and B2B flows; and
3) licensed fintech-banking hybrids (e.g., Revolut) embedding finance within their own ecosystem.

• Regulatory harmonization under upcoming frameworks like FIDA (Financial Data Access) and DORA (Digital Operational Resilience Act) will lower the compliance burden for well-capitalized players while forcing consolidation among smaller, under-licensed providers. The role of telcos, e-commerce platforms, and SaaS vendors as embedded finance distributors will also grow, altering the competitive balance from fintech-only dynamics to multi-sector competition.

This report provides a detailed data-centric analysis of the embedded finance industry in Europe, covering five major verticals: payments, lending, insurance, banking, and investments & wealth management. It covers more than 100 KPIs, including transaction value, transaction volume, average transaction size, revenue indicators, and financial performance measures.

The report offers segmentation by business models (platform-based, enabler, and regulatory entity), distribution models (own and third-party platforms), and end-use markets, including e-commerce, retail, healthcare, travel & hospitality, utilities, automotive, education, and the gig economy. Together, these datasets provide a comprehensive, quantifiable view of market size, operational efficiency, risk, customer behavior, and user experience in the embedded finance market.

PayNXT360 research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.

This title is a bundled offering, combining the following 17 reports, covering 2700+ tables and 3000+ figures:

1. Europe Embedded Finance Business and Investment Opportunities Databook
2. Austria Embedded Finance Business and Investment Opportunities Databook
3. Belgium Embedded Finance Business and Investment Opportunities Databook
4. Denmark Embedded Finance Business and Investment Opportunities Databook
5. Finland Embedded Finance Business and Investment Opportunities Databook
6. France Embedded Finance Business and Investment Opportunities Databook
7. Germany Embedded Finance Business and Investment Opportunities Databook
8. Greece Embedded Finance Business and Investment Opportunities Databook
9. Ireland Embedded Finance Business and Investment Opportunities Databook
10. Israel Embedded Finance Business and Investment Opportunities Databook
11. Italy Embedded Finance Business and Investment Opportunities Databook
12. Netherlands Embedded Finance Business and Investment Opportunities Databook
13. Poland Embedded Finance Business and Investment Opportunities Databook
14. Russia Embedded Finance Business and Investment Opportunities Databook
15. Spain Embedded Finance Business and Investment Opportunities Databook
16. Switzerland Embedded Finance Business and Investment Opportunities Databook
17. United Kingdom Embedded Finance Business and Investment Opportunities Databook

Scope

This report provides in-depth, data-centric analysis of the regional embedded finance market, with exclusive coverage of B2C transactions and adoption metrics. Below is a summary of key market segments.

Embedded Finance Market Size and Growth Dynamics

• Total Transaction Value
• Number of Transactions
• Average Value per Transaction

Embedded Finance Financial Performance Indicators

• Total Revenue
• Average Revenue per Transaction / Product

Embedded Finance Key Metrics

• Operational Efficiency Metrics: Transaction Success Rate, Automation Rate (Instant Decision %), Average Turnaround / Processing Time
• Quality & Risk Metrics: Fraud Rate, Error Rate
• Customer Behavior Metrics: Repeat Borrowing Rate, Customer Retention Rate, Churn Rate, Conversion Rate, Abandonment Rate, Cross-Sell / Upsell Rate
• User Experience Metrics: Average Transaction Speed, Average Order / Loan / Policy / Investment Size

Embedded Payments Market Size and Growth Dynamics

• Total Payment Value (TPV) and Growth Outlook
• Number of Transactions and Usage Trends
• Average Revenue per Transaction

Embedded Payments Key Metrics

• Transaction Metrics: Transaction Success Rate, Repeat Usage Rate
• Operational Efficiency Metrics: Chargeback Rate, Fraud Rate, Dispute / Resolution Rate
• Conversion & Retention Metrics: Conversion Rate, Abandonment Rate, Customer Retention Rate
• User Experience Metrics: Average Transaction Speed, Error Rate

Embedded Payments Market Segmentation by Business Models

• Platform-Based Model
• Enabler-Based Model
• Regulatory-Entity Model

Embedded Payments Market Segmentation by Distribution Models

• Own Platforms
• Third-Party Platforms

Embedded Payments Market Segmentation by End-Use Markets

• E-commerce & Retail
• Digital Products & Services
• Travel & Hospitality
• Leisure & Entertainment
• Health & Wellness
• Utility Bill Payments
• Other Sectors

Embedded Lending Market Size and Growth Dynamics

• Loan Disbursement Value
• Number of Loans Issued
• Average Loan Size

Embedded Lending Key Metrics

• Credit Quality & Risk Metrics: Delinquency Rate (30/60/90 Days), Approval Rate, Default Rate, Loss Given Default (LGD)
• Monetization & Unit Economics Metrics: Interest Revenue per Loan
• Adoption & Usage Metrics: Repeat Borrowing Rate
• Operational & Platform Efficiency Metrics: Loan Origination Time (TAT), Automation Rate (Instant Decision %)

Embedded Lending Market Segmentation by Business Models

• Platform-Based Model
• Enabler-Based Model
• Regulatory-Entity Model

Embedded Lending Market Segmentation by Distribution Models

• Own Platforms
• Third-Party Platforms

Embedded Lending Market Segmentation by Product Types

• Buy Now, Pay Later (BNPL)
• Point-of-Sale (POS) Lending
• Personal Loans
• Gig Worker Income Advances
• Other Loan Types

Embedded Lending Market Segmentation by End-Use Markets

• E-commerce & Retail
• Gig Economy
• Travel & Hospitality
• Healthcare
• Education & EdTech
• Automotive & Mobility
• Other Sectors

Embedded Insurance Market Size and Premium Dynamics

• Gross Written Premium (GWP)
• Number of Policies Issued
• Average Premium per Policy

Embedded Insurance Key Metrics

• Policy & Premium Metrics: Renewal Rate
• Claims & Risk Performance Metrics: Claims Ratio (Loss Ratio), Claim Frequency, Claim Settlement Time, Fraud Rate
• Platform Monetization Metrics: Embedded Insurance Revenue per User (RIU)
• Distribution & Conversion Metrics: Attachment Rate, Quote-to-Bind Conversion Rate, Cross-Sell / Upsell Rate

Embedded Insurance Market Segmentation by Policy Type

• Life Insurance
• Non-Life Insurance (Motor Vehicle, Home/Property, Accident & Health, Others)
• Motor Vehicle
• Home/Property
• Accident & Health

Embedded Insurance Market Segmentation by Business Models

• Platform-Based Model
• Enabler-Based Model
• Regulatory-Entity Model

Embedded Insurance Market Segmentation by Distribution Models

• Own Platforms
• Third-Party Platforms

Embedded Insurance Market Segmentation by End-Use Markets

• E-commerce & Retail
• Travel & Hospitality
• Automotive & Mobility
• Healthcare
• Other Sectors

Embedded Banking Market Size and Account Dynamics

• Total Deposits / Inflows
• Account Fee Revenue

Embedded Banking Key Metrics

• Account Metrics: Account Churn Rate
• Risk & Compliance Metrics: Fraudulent Transaction Rate

Embedded Banking Distribution by End-Use Markets

• Gig & Freelance Platforms
• E-commerce & Marketplaces
• Fintech Apps & Neobanks
• Other Platforms

Embedded Investments & Wealth Market Size and User Dynamics

• Total Assets Under Management (AUM)
• Number of Investment Transactions
• Average Investment per User

Embedded Investments & Wealth Key Metrics

• Returns & Performance Metrics: Annualized Portfolio Return
• Retention Metrics: Account Churn Rate

Embedded Investments & Wealth Market Segmentation by Business Models

• Platform-Based Model
• Enabler-Based Model
• Regulatory-Entity Model

Embedded Investments & Wealth Market Segmentation by Distribution Models

• Own Platforms
• Third-Party Platforms

Embedded Investments & Wealth Market Segmentation by End-Use Markets

• Fintech & Neobank Apps
• E-commerce & Super Apps
• Gig & Freelancer Platforms
• Other Platforms

Reasons to buy

• Comprehensive KPI Coverage: Access over 100 key performance indicators (KPIs), including transaction value, transaction volume, revenue, and average transaction size.
• Complete Vertical Coverage: Structured datasets across all five embedded finance verticals - payments, lending, insurance, banking, and investments & wealth.
• Granular Market Segmentation: Detailed data by business models (platform-based, enabler, regulatory-entity), distribution models (own vs. third-party platforms), and product types.
• Sector-Level Data Tracking: Coverage across B2C end-use markets such as e-commerce, retail, healthcare, travel & hospitality, utilities, automotive, education, gig economy, and others.
• Operational & Performance Metrics: Provides data on efficiency, quality & risk, monetization, customer behavior, and user experience indicators for a rounded view of market performance.