Embedded Finance Market Report 2025

The embedded finance market size has grown exponentially in recent years. It will grow from $77.64 billion in 2024 to $94.42 billion in 2025 at a compound annual growth rate (CAGR) of 21.6%. The growth in the historic period can be attributed to increasing customer demand for convenience, growth of e-commerce, rising investment in open banking frameworks, growing consumer trust in non-bank platforms, growing adoption of digital wallets and contactless payments, and rising demand for instant credit and micro-lending solutions.

The embedded finance market size is expected to see exponential growth in the next few years. It will grow to $206.98 billion in 2029 at a compound annual growth rate (CAGR) of 21.7%. The growth in the forecast period can be attributed to increasing digital transformation, increasing popularity of online payment services, growing smartphone penetration, rising demand for on-demand insurance solutions, and increasing use of real-time data analytics. Major trends in the forecast period include technology-driven payment gateways, developing insurance-as-a-service models, integration of financial application programming interfaces, innovation in micro-investing platforms, and developing financial literacy tools.

The forecast of 21.7% growth over the next five years reflects a slight reduction of 0.2% from the previous projection. This reduction is primarily due to the impact of tariffs between the US and other countries. This is likely to directly affect the US through slower innovation in financial services integration, as application programming interfaces and white-label banking platforms, primarily developed in the United Kingdom and Estonia, face higher deployment costs due to tariff impacts on cloud-based solutions. The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.

The growing adoption of online payment services is anticipated to drive the expansion of the embedded finance market in the coming years. Online payment services are digital platforms or systems that allow individuals and businesses to securely and efficiently conduct financial transactions over the internet. Their rising popularity is largely attributed to the convenience, speed, and secure nature of transactions that can be carried out anytime and from anywhere. Embedded finance enhances these services by embedding financial capabilities directly into digital platforms, improving the overall user experience. It facilitates smoother transactions, minimizes friction, and delivers seamless payment processes, enabling businesses to operate more efficiently and allowing customers to complete purchases with greater ease. For example, in July 2024, UK Finance, a UK-based financial services organization, reported that 62% of UK adults used online banking in 2023, while 60% accessed banking via mobile applications. Thus, the growing use of online payment services is a key driver of the embedded finance market’s growth.

Leading companies in the embedded finance market are focusing on the development of innovative platforms, such as all-in-one fintech solutions, to simplify payment processes and enhance the overall customer experience. Comprehensive fintech platforms are integrated digital systems that deliver a broad spectrum of financial services - including payments, lending, insurance, investment management, and banking - within a unified framework. For example, in May 2024, Fidelity Information Services (FIS), a U.S.-based financial services provider, introduced Atelio by FIS, a platform tailored for financial institutions, businesses, and software developers. This platform provides a robust embedded finance solution featuring easily integrable application programming interfaces (APIs), allowing users to incorporate services such as deposit management, money transfers, card issuance, lending, and KYC (Know Your Customer) onboarding directly into their offerings. It stands out for its strong security measures, regulatory compliance, and developer-oriented features, enabling swift implementation of customizable financial services supported by FIS’s advanced technology and industry expertise.

In June 2023, Bnkbl Ltd., a UK-based provider of banking-as-a-service (BaaS), acquired Arex Markets for an undisclosed amount. This acquisition is intended to strengthen Bnkbl’s embedded finance capabilities by incorporating advanced credit and working capital solutions, creating a robust pan-European banking platform tailored for neobanks, fintechs, and global brands. Arex Markets, headquartered in Spain, is a fintech company specializing in embedded finance, with a particular emphasis on invoice financing solutions for small and medium-sized enterprises.

Major players in the embedded finance market are State Bank of India, eBay Inc., Adyen N.V., Cybrid Technology Inc., Stripe Inc., Finastra Group Holdings Limited, Green Dot Corporation, Affirm Holdings Inc., Paytm, ​Thoughtworks, Marqeta Inc., Q2 Holdings Inc., Xendit Inc., Zopa Bank Limited, Plaid Inc., Qover SA/NV, Transcard LLC, Lendflow Inc., Walnut Insurance Inc., and SoFi Technologies Inc.

North America was the largest region in the embedded finance market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in embedded finance report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the embedded finance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The embedded finance market consists of revenues earned by entities by providing services such as buy now pay later, card issuance, identity verification, and fraud detection. The market value includes the value of related goods sold by the service provider or included within the service offering. The embedded finance market also includes sales of smart POS terminals, smartwatches, and vending machines. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The sharp rise in U.S. tariffs and the ensuing trade tensions in spring 2025 are having a considerable impact on the financial sector, particularly in the areas of investment strategies and risk management. The increased tariffs have intensified market volatility, leading institutional investors to adopt more cautious approaches and driving greater demand for hedging solutions. Banks and asset managers are encountering higher costs in cross-border transactions as disrupted global supply chains and declining corporate earnings weigh on equity market performance. At the same time, insurance providers are facing elevated claims risks linked to supply chain interruptions and trade-related business losses. Furthermore, reduced consumer spending and weaker export demand are limiting credit growth and dampening investment appetite. In response to these challenges, the sector must focus on diversification, accelerate digital transformation, and strengthen scenario planning to manage the heightened economic uncertainty and safeguard profitability.

Embedded finance involves the seamless incorporation of financial services into non-financial products or platforms, enabling users to access financial functions as part of their everyday interactions. The primary goal is to improve user experience, enhance convenience, and create additional revenue opportunities for non-financial businesses. It allows companies to offer services such as payments, lending, insurance, or investment solutions without holding a financial services license.

The key categories of embedded finance include embedded payments, embedded lending, embedded investments, embedded insurance, and embedded banking. Embedded payment refers to the direct integration of payment processing functions within a digital platform or software application, enabling users to complete transactions without exiting the platform. This approach supports various business models, including business-to-business (B2B) and business-to-consumer (B2C), and caters to a broad range of industries such as retail, healthcare, logistics, manufacturing, travel, entertainment, and more.

The embedded finance market research report is one of a series of new reports that provides embedded finance market statistics, including the embedded finance industry's global market size, regional shares, competitors with the embedded finance market share, detailed embedded finance market segments, market trends and opportunities, and any further data you may need to thrive in the embedded finance industry. This embedded finance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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