Embedded Finance Will Reach a $7T Value Globally in the Next 10 Years


As firms, their customers and their financial partners race to keep up with the growing appetite for emerging digital tools, one concept that promises to shape the future of payments is embedded finance.

A new study, the Next-Gen Commercial Banking Tracker, a PYMNTS and FISPAN collaboration, reports that embedded finance will reach a $7 trillion value globally in the next 10 years.

Get the report: Next-Gen Commercial Banking Tracker

Embedded finance uses connective technologies to integrate payments directly into non-financial platforms, such as company websites or mobile apps, enabling any merchant or brand to offer innovative financial services to customer rapidly and at a relatively low cost.

Consumers are growing used to finding payment experiences grafted directly onto companies’ websites or mobile applications. Businesses as diverse as rideshares, restaurants and aggregated financial services have familiarized consumers with these embedded finance tools.

Businesses that do not yet offers these tools are anxious to get onboard, because they know that offering subpar or friction-laden payment experiences can lead to rapid loss of customer engagement — and revenue — as both consumers and B2B clients ratchet up expectations for payment speed and convenience. Grasping the embedded finance opportunity promises to give businesses a competitive edge in engaging and retaining today’s digital-first customers.

This, in turn, has placed pressure on firms’ banking partners to be ready to offer such solutions. As embedded payments become more popular, banks must work quickly to meet their business clients’ needs. Financial institutions must find ways to offer embedded finance tools to their business customers or risk being ousted from the digital financial playing field. Finding partners that can allow them to support and offer these tools is one solution that is becoming a central feature of many banks’ long-term strategy for growth — and for a share of that predicted $7 trillion value.