Embedded finance is not a single operating model. Instead, how payments, lending, investing and other financial functions are woven into a company’s digital ecosystem depends on who that company serves. Whether it’s a business-to-consumer (B2C) company, a business-to-business (B2B) provider that enables embedded finance for other businesses or a hybrid B2C-B2B firm that operates in both roles, the exact role shapes the benefits and frictions a firm experiences when deploying the technology.
While regulatory concerns loom for all firms using embedded finance, B2B users are the most likely to anticipate increased regulatory oversight. How users define success also varies: B2C and hybrid firms primarily measure that through the growth of business with existing customers. In contrast, B2B providers prioritize operational health, focusing on cash flow performance and cost reduction.
These varied priorities and concerns make the strategic choice of which embedded finance provider to work with crucial. Institutional trust in the provider is the dominant factor in partner selection, especially for B2B firms (69.1%), which prioritize data security and governance over speed-to-market. Meanwhile, B2C and hybrid firms weigh business “fit” heavily to ensure alignment with the user experience of their customers.
These are some of the findings in “The Trust Imperative in Embedded Finance,” a PYMNTS Intelligence collaboration with Green Dot. This study examines how organizations are engaging with embedded finance across the payment ecosystem. It draws on insights from a survey of 515 senior leaders at banks, neobanks, credit unions, FinTechs, HR and software firms, retailers, merchants and software-as-a-service technology firms between Aug. 21, 2025, and Sept. 10, 2025.
Embedded Finance Roles in the Ecosystem
How a company uses or provides embedded finance services depends on its distinct role in the embedded finance ecosystem, rather than on a uniform operating model. Firms occupy different positions in that payments landscape, including B2C firms that deliver embedded finance tools directly to customers or employees, B2B infrastructure providers that enable embedded finance for other businesses, and B2C and hybrid firms that operate in both roles. This ecosystem role matters because it shapes how a company defines the tool’s value, e.g., growth and customer outcomes versus enablement, speed and governance, and how it experiences and anticipates risk and regulatory scrutiny.
Value Drivers Differ by Ecosystem Role
The perceived value of embedded finance varies. B2C firms most often cite embedded finance as improving the customer/employee relationship (39.8%), driving faster onboarding (33.1%) and opening new revenue streams (31.4%), along with providing richer behavioral and financial data (29.7%, signaling a life cycle-and-growth value thesis). B2B firms, meanwhile, prioritize enablement outcomes tied to performance and friction reduction, particularly seamless user experiences (51.9%) and faster transmission of funds (46.9%), alongside relationship benefits (50.6%). B2C-B2B hybrids blend both perspectives and more strongly elevate system-level considerations, including risk assessment (39.4%) and ecosystem control/platform lock-in (35.9%).
Overall, the priorities of an embedded financing-deploying firm track closely with its position in the value chain: B2C firms emphasize growth and customer outcomes, B2B companies emphasize delivery and enablement, and hybrids pair customer value with a stronger emphasis on governance, risk and control.
Transparency and Cost-Complexity as Barriers
While embedded finance providers emphasize seamless user experiences as a core value driver, frictions reported by B2C firms reveal persistent barriers to realizing that promise. Among B2C firms, a lack of transparency or visibility into a provider’s processes and performance is the most cited friction (28.8%), followed by the high costs of integrating with existing systems (25.4%), suggesting that opacity and cost complexity can slow time-to-value and weaken projected returns. Provider-side constraints reinforce these challenges, as B2B firms also cite limited flexibility and customization of embedded finance solutions (27.2%) and low ROI or business impact (23.5%) as notable frictions. Hybrid firms report elevated regulatory or compliance issues (27.9%) and unexpected operational complexity (26.3%), consistent with their broader exposure across the enablement and end-user layers.
Overall, the findings suggest that delivering seamless embedded finance requires transparent operations, flexible integration models and governance that reduce costs and complexity for ecosystem partners.
Regulatory Views and Expectations
Most firms don’t view regulation of embedded finance as harmful, but many expect tighter regulatory oversight. Whatever their role in the embedded finance ecosystem, respondents largely reject the idea that additional rules will negatively affect the industry and end users, with the strongest pushback coming from B2B infrastructure providers. At the same time, expectations for the future regulatory environment are mixed. B2B providers are the most likely to anticipate increased stringency over the next three years, while B2C and hybrid firms are more evenly divided on whether regulation will become stricter.
This combination suggests that the market is not opposed to regulation in principle, but is increasingly focused on meeting a higher bar in practice, particularly among sponsor banks and infrastructure providers subject to closer supervisory scrutiny. As oversight expectations rise, differentiation will increasingly hinge on program governance, compliance maturity, transparency and operational resilience, rather than speed-to-market or feature breadth.
Defining Embedded Finance Success
Success in embedded finance is most often defined as the deepening of existing relationships. Across segments, the success measure firms most commonly cited was growth of business with existing customers, cited by 59.7% of B2C and B2B hybrid firms, 56.8% of B2B providers and 46.6% of B2C firms. But when asked to identify a single primary success metric, benchmarks diverge. B2B providers are more likely to anchor success in operational health, with better cash flow performance (25.9%) and lower costs (25.9%) tied as their top primary metrics. By contrast, B2C firms (25.4%) and hybrids (30.5%) most often identify growth of business with existing customers as the primary measure. Beyond primary key performance indicators, more than 40% of respondents across segments also measure success through new customer adoption rates and a healthier balance sheet.
Overall, B2B providers tend to evaluate success through operational performance and efficiency, while firms closer to end users emphasize customer stickiness and relationship deepening.
The Drivers of Embedded Finance Partner Selection
Who a company chooses as its embedded finance provider is anchored in institutional confidence and strategic fit, with trust in the provider cited most frequently across roles, especially among B2B providers (69.1%). This heavier reliance on trust is consistent with a B2B enablement model in which providers operate deeper in the technology stack, carry greater third-party exposure and are judged on their reliability and governance as much as their feature sets.
After trust, partner selection priorities differ by role. B2C and hybrid firms place greater weight on business and customer fit, at 46.6% and 52.7%, respectively, signaling that partner choice hinges on alignment with the customer experience and operating model. Technology compatibility remains a consistent mid-tier requirement across segments (roughly 43%–47%), underscoring how integration readiness is a baseline requirement. B2B providers also stand out for emphasizing data security and privacy controls (50.6%), reflecting their heightened sensitivity to client expectations of strong risk management capabilities.
By comparison, embedded finance providers consider transactional considerations less frequently. Twenty-one percent of B2B providers cited cost-effectiveness, versus roughly 25% of B2C firms and 36% of hybrid firms. Sixteen percent of these providers cited speed-to-market, versus roughly 20% for B2C firms and 24% for hybrid firms. This suggests that B2B providers place greater emphasis on partner dependability and strategic alignment than on short-term pricing or launch advantages.
Methodology
“The Trust Imperative in Embedded Finance,” a PYMNTS Intelligence and Green Dot collaboration, is based on a survey of 515 senior leaders at U.S. companies from the following industries: financial services (including banks, FinTechs, neobanks, financial service centers, lenders, banking-as-a-service, wealth management, payments and cryptocurrency), technology (business software providers including consumer technology, gig economy technology, risk and compliance, cybersecurity, digital identity, data analytics, AI and blockchain), enterprise or HR software and retailers or merchants (including online only). Ninety-seven percent of companies surveyed generate annual revenues between $10 million and $2 billion. Less than 6% of the overall sample has less than $50 million in revenue. Eligible respondents were director level or above (e.g., CEO, CFO, COO), employed at companies with 100 or more employees and directly involved in finance or embedded finance operations, strategy or implementation. The study was conducted from Aug. 21, 2025, to Sept. 10, 2025.
