Embedded finance has taken root across American industries from retail to payroll processing, but firms are deploying the consumer-focused technology in very different ways. A survey of 515 senior leaders at U.S. companies, conducted by PYMNTS Intelligence in collaboration with Green Dot, divides respondents into three cohorts by annual revenue and finds that a company’s size shapes nearly every aspect of its approach to integrating credit and payment tools into its systems. From delivery models and the technologies they invest in to the partners they seek out and the hurdles along the way, a company’s growth trajectory shapes how it deploys what is now a baseline capability.
Smaller and larger firms operate with fundamentally different priorities for offering financial services to consumers within their own operating ecosystems. The middle market occupies a distinct position all its own. With nearly 80% of middle market firms upgrading their embedded finance tools within 12 months, it’s the most active segment in the study and the one under the most pressure to unlock embedded finance’s performance- and revenue-boosting capabilities.
Key Findings
1. Embedded finance delivery models diverge with scale.
The majority of firms with annual revenues of more than $1 billion outsource their embedded finance to a single provider, compared with just 26% of firms with annual revenues of less than $250 million. As companies grow larger, it becomes harder for them to manage their financial infrastructure solely in-house.
2. The middle market feels the most friction.
Forty-five percent of middle market firms cite strategic alignment and return on investment as the areas where they struggle the most with embedded finance, nearly double the rate of smaller firms. For these businesses, the technology has grown too large for a single in-house team to manage but not yet been absorbed into the broader organization’s operations.
3. What firms want from embedded finance partners changes as they grow.
Smaller firms prioritize data security and trust in their provider. Larger firms want customization and a partner whose approach fits their existing business operations and technology systems. Middle market firms are the most likely to require their partners to hold a bank charter.
Who Builds, Who Buys
As firms expand, they tend to hand their embedded finance operations over to external providers, particularly a single partner. The majority of firms with revenues of more than $1 billion now rely on one third party. But among firms with annual revenues of less than $250 million, only about one-quarter do the same. These smaller firms are more likely to manage their embedded finance infrastructure in-house or spread it across multiple partners.
The reason is that with leaner teams and lower transaction volumes, smaller companies rarely have enough operational complexity or revenue to justify the cost of vetting, contracting with and integrating a single dedicated external partner. That makes in-house solutions or ad hoc multi-vendor arrangements the more pragmatic and cost-effective default.
Middle market firms tell a different story. With annual revenues between $250 million and $1 billion, they’re the most evenly distributed across all three approaches. Roughly one-third build internally, one-third use a single external provider and one-third work with several third parties. The spread suggests that this is the stage where, as companies face the growing complexity of maintaining their financial infrastructure in-house, they start actively weighing their options and deciding whether to keep building or consolidate around a partner.
The Race to Upgrade Embedded Finance at Scale
As embedded finance tools become increasingly available across industries and sectors, small and middle market firms are moving quickly. Roughly 80% of both groups plan to upgrade their embedded finance capabilities within the next 12 months. Among firms with revenues of more than $1 billion, that figure falls to 63%, perhaps because they already have a full suite of tools. Nearly one in five large firms report no plans to enhance their capabilities at all.
Large firms that plan to add new capabilities or features tend to reach for more complex products, such as banking and investing services. Smaller firms in the same position focus first on payments and payroll. The difference reflects where each group lies in its own development. Smaller firms are still putting embedded finance tools and features in place, while larger firms are extending and enhancing what they already have.
Technology Priorities Diverge by Scale
Smaller firms are investing in tools that improve speed and data intelligence in their current operations. Real-time payments, advanced analytics and cloud infrastructure each rank as priorities for more than 55% of firms with revenues of less than $250 million, compared with 42% of firms with revenues of more than $1 billion across all three areas.
At 38%, larger firms show considerably greater interest in blockchain and decentralized finance than the smallest firms (25%). Though these technologies haven’t yet reached widespread use, larger firms may have the runway and resources to invest in them early.
The middle market sits between the two groups on most embedded finance features, without a pronounced lean in either direction. Some have outgrown their bootstrapping in-house approach but haven’t yet committed to a strategic technology vision. Others are investing in operational tools but have a lot of room to grow.
Embedded Finance Growing Pains
Regardless of their size, fraud, service disruptions and operational complexity affect firms at broadly similar rates. Still, several problems concentrate heavily in the middle market.
Strategic alignment with core business strategy, decision making and return on investment (ROI) is the sharpest example. Nearly one in two (45%) of middle market firms cite that as an obstacle, nearly double the 24% rate among smaller firms. Coordination across internal teams follows the same pattern. Technical and integration challenges also peak in this cohort. Smaller firms are the most likely of any group to report no hurdles at all.
This pattern is consistent across all measured categories. Middle-market companies are at a stage where embedded finance has grown beyond what a single in-house team can quietly manage in the background, but hasn’t yet been absorbed into how the broader organization makes decisions. That in-between position is where the holdups concentrate.
Partner Equation Changes With Scale
What firms look for in an embedded finance partner shifts considerably as they grow.
Firms with less than $250 million in revenue lead with trust and security. Nearly two-thirds prioritize trust in their provider, and close to half prioritize data security—rates that fall to 51% and 27%, respectively, among firms with revenues of more than $1 billion. Smaller firms also place more weight on the breadth of financial products a partner can offer.
Larger firms shift their focus toward customization and business fit. Nearly half of firms with more than $1 billion in revenue say customization is a key criterion, compared with roughly one-third of smaller firms. More than half prioritize a partner whose approach aligns with how their business already works.
The middle market stands out on one particular point. Nearly one in three (32%) say their partner must hold a bank charter, the highest among all revenue tiers. That means the provider is itself a licensed, regulated bank that can hold deposits, issue credit and move money directly, without routing those activities through a separate banking partner. It answers to federal and state regulators and carries the legal obligations that come with that.
By contrast, a provider without a charter, usually called a Banking-as-a-Service (BaaS) provider, offers financial products by sitting atop a chartered bank. It handles the technology and the customer experience, but the actual banking activity takes place at the bank underneath. That intermediary layer is where regulatory scrutiny has concentrated in recent years.
That middle-market preference for a provider with a bank charter likely reflects several pressures at once. The companies may want the chance to build compliance capabilities alongside a chartered partner and, in some cases, to lay the early groundwork for their longer-term ambitions.
Conclusion
How embedded finance providers market their services should match a customer’s growth stage. The primary starting point is that the case for outsourcing embedded finance grows as firms scale. The criteria firms use to evaluate partners differ across revenue tiers. Middle-market firms are at a decision point, actively choosing between building and buying. The question they need to ask now is whether their current approach can keep pace with where the company is heading.
That’s because middle-market firms face distinct pressures. They’re the most active segment in the study. Nearly 80% are upgrading within 12 months. They have the strongest appetite for chartered banking partners and they report the most friction around strategic alignment. A partner that offers direct access to regulated banking infrastructure and a compliance framework the firm can build on serves this group better than one that simply sits between the firm and the bank.
Smaller firms need security and trust. Middle-market firms need governance and a chartered banking relationship. Larger firms need customization and a close fit with how they already do business. The criteria that matter most at $100 million in revenue are not the same ones that matter at $1 billion.
Methodology
PYMNTS Intelligence surveyed 515 senior leaders at U.S. companies from Aug. 21–Sept. 10, 2025. Respondents are from the following industries: financial services (including banks, FinTechs, neobanks, financial service centers, lenders, banking-as-a-service, wealth management, payments and cryptocurrency platforms), 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 of between $10 million and $2 billion. Less than 6% of the overall sample has less than $50 million in annual revenue. Eligible respondents were director level or above (i.e., CEO, CFO, COO), employed at companies with 100 or more employees and directly involved in finance or embedded finance operations, strategy or implementation.
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