What Happens When Embedded Finance Grows Up?

For more than two decades, financial technology companies have been racing to expand a financing model invented by General Motors over a century ago. The model established in‑house finance arms so that car buyers could get a loan at the dealership instead of trudging to a bank.

Now the sprint to put more financial services into more businesses that aren’t banks is downshifting to a paced race, recent PYMNTS Intelligence data shows.

Until recently, embedded finance — software that weaves payments, lending, digital wallets, insurance and other financial products into the platform of a retailer or other business that isn’t itself a bank — was defined by speed. Fueled by Silicon Valley’s ethos of “move fast and break things,” the sales pitch of embedded finance providers was that the faster a nonbank company could offer financial services, the stronger its competitive edge in the digital economy. Integrating embedded finance tools without hiccups or glitches promised growth, stickier customers likely to come back, and new revenue streams, often without the wait and hassles traditionally associated with dealing with a bank.

Now come the brakes and cruise control in a global market expected to top $7.2 trillion by 2030.

Recent research from PYMNTS Intelligence produced in collaboration with Green Dot suggests that embedded finance is moving into a more disciplined stage shaped not by how fast a retailer can offer new financial products, but by how much it trusts the technology company providing those products, along with the compatibility and operational rigor of its tools.

From Fast Launches to Hard Trade-Offs

In its early years, embedded finance thrived on rapid deployment by online marketplaces and retailers. Platforms like Salesforce, a cloud software company for businesses, raced to add payments, wallets, payroll access and credit features, often prioritizing how fast they could get to market over ensuring those features played well with their other technology.

That approach delivered results. Embedded finance expanded quickly across retail, software, gig platforms and financial services. From Amazon.com and Uber to Kayak and Etsy, 97% of online marketplaces now have at least one embedded finance product for consumers.

Renata Caine, Green Dot’s general manager of banking as a service, told PYMNTS TV last December that “embedded finance is fundamental to how businesses create value and build customer loyalty.” Businesses of all sizes were embracing it, she added: “It’s no longer just the enterprise brands.”

But as use of embedded finance systems expanded, so did their operational footprint. Integration costs rose. Compliance demands multiplied. And visibility into how an embedded finance provider works behind the scenes became a growing concern.

Trust Me

The recent PYMNTS Intelligence study, based on a survey of 515 senior executives conducted in late 2025, captures this inflection point. Across the ecosystem, companies say embedded finance remains strategically important. But they are becoming more selective about how they deploy it — and who they work with.

Whether a business trusts an embedded finance provider has overtaken speed and price as the most important factor in choosing it as a partner, especially among business-to-business companies. These firms operate deeper in the financial stack, where outages, compliance failures and data issues carry real consequences. For them, reliability and governance now matter more than fast launches.

At the same time, many businesses report persistent pain points when integrating embedded finance into their operations. High integration costs, limited transparency into provider processes and regulatory complexity are slowing the time it takes to achieve real value. Embedded finance is still attractive, but it’s no longer seemingly effortless.

One Technology, Different Priorities

The PYMNTS research also shows that embedded finance looks and acts differently depending on a company’s role in the ecosystem.

Business-to-consumer firms tend to view embedded finance through a growth lens. They focus on using the tool to improve customer relationships, onboard new customers and drive customer engagement. For them, the emphasis is shifting from adding new features to deepening consumers’ usage of existing ones and keeping them in the fold.

B2B companies approach things differently. Their priorities center on operational health. Cash flow performance, cost control and system stability matter more than the experience of front-end users. For these companies, embedded finance is infrastructure.

Hybrid companies, which both provide embedded finance and use it internally, face the steepest learning curve. They have to balance customer experience with regulatory exposure and platform governance. As a result, they feel the added pressure of ensuring embedded finance ticks all the boxes — compliance, smooth operations — more acutely.

Here Come the Regulators

Expectations about how regulators both federal but especially state-level will shape and control embedded finance are accelerating this shift.

FinTechs providing embedded finance services are typically classified as third‑party technology or program managers rather than regulated financial institutions. Their activities are tightly governed by the contracts, oversight and due‑diligence frameworks imposed by the sponsor bank they work with. The bank is usually on the hook for any compliance failures in the embedded finance provider’s system, including those regarding know-your-customer rules, data sharing and anti-money laundering regulations set by federal governments and states.

Most companies surveyed by PYMNTS Intelligence don’t believe any additional regulation will harm embedded finance. But many expect oversight to increase, particularly over the next three years. Infrastructure providers and platforms working directly with financial services providers, such as buy now, pay later platforms like Klarna, anticipate the sharpest scrutiny.

This expectation is reshaping how companies approach what is now the “mature” stage of embedded finance. First, they’re building compliance and governance guardrails into their programs earlier. Second, they’re focusing on who they partner with long term, favoring providers with mature controls and transparent operations.

Redefining ‘Seamless’

Perhaps the most telling sign of maturity is how companies now define “seamless.”

In embedded finance’s early years, that meant “invisible.” Payments were sent. Funds moved quickly. Companies didn’t question  the technological complexity underneath. Today, seamless increasingly means predictable, transparent and accountable.

Limited visibility into how a provider’s processes actually work has emerged as a top concern, particularly for consumer-facing firms. When companies can’t see exactly how their embedded finance programs operate, their confidence in the provider dims. That lack of clarity makes it harder for them to scale and harder to respond when problems arise.

The New Embedded Finance Playbook

As embedded finance matures, a new playbook is emerging.

Companies are prioritizing governance frameworks that define oversight and accountability. They’re demanding clearer integration models that reduce costs and complexity. Data security and privacy controls are becoming baseline requirements, not differentiators.

This shift also affects how companies are measuring their success with embedded finance programs. Instead of focusing solely on new features or acquiring new customers, they’re tracking operational performance and long-term customer value. The result: Embedded finance is being treated less like an add-on and more like core infrastructure.

What Comes Next

The next phase will likely favor fewer, stronger platforms built for endurance rather than experimentation. Innovation will continue, but within tighter guardrails. Providers that can demonstrate reliability, compliance discipline and transparency are likely to gain share. Others may struggle to scale.

As embedded finance grows up, the companies that succeed in their use of it will be those willing to trade short-term speed for long-term trust in their provider.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.