How Embedded FinTech Is Becoming B2B’s Competitive Edge

The ability to embed payments across nonfinancial touchpoints and into existing systems is transforming business models across industries with new monetization opportunities.

“There has definitely been an uptick in B2B-type platforms that are looking to add additional services to their product offering,” Justin Downey, vice president of product at Maverick, told PYMNTS.

From eCommerce and retail to healthcare and education, he said, businesses are leveraging these technologies to enhance customer experiences, streamline operations and open new revenue streams.

For many organizations, by integrating payment capabilities into core platforms, they are able to enhance data insights, improve customer experiences and boost platform stickiness.

Downey highlighted the importance of application programming interfaces (APIs) in driving the embedded FinTech trend, noting: “There’s been a lot of development with third parties and ease of integration through APIs. Adding this payment piece to an existing offering just makes sense.”

For software developers and enterprise strategists, he said, understanding how to evaluate full stack FinTech providers is vital to making informed technology investments.

As the world of payments continues to evolve, the importance of embedded FinTech and inclusive payment solutions will grow. With the right strategy, businesses can not only streamline their payment processes but also create new opportunities for growth and innovation.

Key Components

Embedded FinTech refers to the integration of financial services into nonfinancial platforms, allowing businesses to offer banking, payments, lending or insurance services directly within their existing ecosystems.

While the goal of embedded FinTech is to provide a seamless user experience, Downey stressed that achieving this simplicity often requires navigating complex back-end processes. One common pitfall, he said, is underestimating the challenges of security and regulatory compliance.

“Security is going to be a big one, right? Because you’re handling sensitive data,” Downey said. “We’ve seen an uptick in regulatory compliance … choosing the right partner to connect with and one that’s really an expert on the payment experience can keep you updated with compliance.”

FinTech solutions operate in a highly regulated space, and it’s becoming increasingly crucial that embedded FinTech partners can manage compliance burdens, particularly those that meet rigorous standards like PCI compliance and SOC 2 audits. Such credentials ensure that sensitive card information is handled securely.

Beyond security, customization is a cornerstone of effective embedded FinTech solutions, while a scalable solution is equally important in allowing the system to grow alongside the business.

“If you’re taking the time and spending the money to develop to a payment system, you want your core offering and the user experience to stay the same. It should flow, it should be seamless,” Downey said, emphasizing the importance of ensuring any payment experience remains customizable, cohesive and branded.

For Downey, the ultimate goal is clear: “You want to prevent the fraudsters, but you want the good payments to travel through, and you want the experience to look like it’s all the same system.”

Future of Embedded FinTech

Looking forward, Downey predicted further integration of artificial intelligence (AI) into embedded FinTech solutions.

“We talk a lot about AI … it’s automating certain tasks,” he said. “Finding out where AI can support as far as error handling, for example, if we’re doing an integration, an API connection from one system to communicate with another, how can AI be involved with that?”

Yet despite the buzz around embedded FinTech, Downey believes there is still a need for education in the market. He sees significant opportunities for collaboration between payment specialists and software providers to create mutually beneficial solutions.

“Both of these two parties can participate in the revenue. And I think it makes a lot of sense for them to connect together and really kind of enhance both of their offerings,” he said.

At Maverick, Downey’s own focus is on building the back-end infrastructure that supports these innovations.

“Our part is acting as a back-end operational system,” he said. Whether businesses need white-label systems, platforms to resell payments or more integrated approaches, Maverick aims to provide the robust “rails” that enable seamless, secure payment experiences.