Now, they are shifting from experimentation to disciplined execution as embedded finance becomes a core part of how they compete and grow.
The PYMNTS Intelligence report “Embedded Finance Grows Up: How Online Marketplaces Can Retain Customers and Boost Revenues,” is based on a survey of 37 senior executives across U.S. marketplaces in retail, travel, finance and business services.
It found that adoption is nearly universal, yet the most striking theme is how marketplaces are maturing in their thinking about what embedded finance is supposed to achieve. Rather than treating these tools as add-ons, companies are aligning them with defined business goals such as retention, customer experience and risk reduction.
The study highlighted a marketplace sector that is no longer tinkering at the edges of financial services but is instead building financial infrastructure into the core of how it operates and plans for growth.
Key data points include:
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- Embedded finance helped 64% of marketplaces reduce churn, while 51% said the tools open new revenue streams.
- Regulatory challenges affect 81% of firms, making compliance expertise a top vendor selection factor.
- Strong regulatory compliance is essential to success with embedded finance, cited by 92% of marketplaces.
The report showed that embedded financial tools are doing more than supporting transactions. They are shaping competition by helping marketplaces build tighter relationships with customers and suppliers.
Tools such as digital wallets and streamlined payouts strengthen engagement and improve the flow of funds for sellers. Lending products, including consumer financing and working capital loans for suppliers, support revenue generation by keeping more financial activity within the marketplace. These capabilities, once seen as experimental, are now central to how marketplaces differentiate themselves.
Regulation emerges as the dominant operational challenge, and the findings suggested that the complexity of compliance is pushing marketplaces to rethink how they choose their partners. Even though 76% of firms want platforms customizable to their needs, flexibility ranks below regulatory expertise and fraud risk management when executives decide which vendors to trust.
The study revealed that 75% of respondents also cited fraud as a hurdle, reinforcing why companies search for partners that can extend their internal capabilities rather than simply supply technology.
The shift toward prioritizing risk control over customization underscored a broader movement inside many enterprises. Embedded finance is maturing from a creative product exercise into a strategic and operational necessity.
The report found that companies with weaker internal collaboration between product and compliance teams are more likely to rely heavily on vendor fraud prevention capabilities. Firms with stronger cross-functional communication show greater confidence in building customizable tools, but even they place compliance at the top of the success criteria list.
Other findings in the report pointed to embedded finance’s ability to improve customer experience, enhance data insights and streamline operations.
Nearly 8 in 10 marketplaces said their goal in expanding embedded offerings is to improve customer experience, while more than half see it as a path to operational efficiency.
The broader message across the data is that embedded finance has moved from an optional feature to a strategic discipline, and the companies that treat it as such are positioning themselves for more durable growth in the years ahead.
