Embedded Finance Market Size - By Finance Type (Embedded Payment, Embedded Insurance, Embedded Investment, Embedded Lending, Embedded Banking), End Use (Retail, Healthcare, Logistics, Manufacturing, Travel & Entertainment), Business Model & Forecast, 2023 - 2032
Published Date: March - 2025 | Publisher: MIR | No of Pages: 240 | Industry: Media and IT | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationEmbedded Finance Market Size
Embedded Finance Market size was valued at USD 58 billion in 2022 and is predicted to register over 29% CAGR through 2023-2032. The rising digital payments are fueling the market growth by enabling the convenient embedding of financial services across numerous platforms. With more consumers turning to digital transactions, companies are riding the wave by providing bundled financial products, including digital wallets, lending, and payment gateways, in their apps.
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Following Press Information Bureau (India) January 2023 release, BHIM UPI emerged as the preferred mode of payment by citizens, with an incredible 8036.0 million digital payment transactions worth a total of USD 165.2 billion. Higher adoption of digital payment channels is broadening the embedded finance industry ecosystem, with easy, accessible, and personalized financial solutions offered to more people.
| Report Attribute | Details |
|---|---|
| Base Year | 2022 |
| Embedded Finance Market Size in 2022 | USD 58 Billion |
| Forecast Period | 2023 to 2032 |
| Forecast Period 2023 to 2032 CAGR | 29% |
| 2032 Value Projection | USD 730.5 Billion |
| Historical Data for | 2018 - 2022 |
| No. of Pages | 230 |
| Tables, Charts & Figures | 287 |
| Segments covered | 230 |
| Growth Drivers |
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| Pitfalls & Challenges |
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What are the growth opportunities in this market?
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The need for seamless customer experiences in payments is mainly fueling the size of the embedded finance market. Customers today expect frictionless and effortless payment processes from different platforms. In order to do so, businesses are embedding financial services into their applications and providing services in the form of digital wallets, instant loans, and easy payment gateways. The user experience focus increases customer satisfaction as well as driving market growth, resulting in an easier & improved financial ecosystem.
The incorporation of financial services into other platforms creates serious issues related to data security and privacy. The processing of sensitive financial data in other applications enhances the vulnerability of data breaches and cyberattacks. Securing customer data from unauthorized use and compliance with data protection laws, like GDPR in Europe, is of utmost priority. Formulating strong encryption policies, multi-factor authentication, and ongoing monitoring are the crucial steps to counteract data security issues and create confidence among the users of embedded finance services.
COVID-19 Impact
The COVID-19 pandemic hastened the growth of the embedded finance sector. The rise in e-commerce fueled the demand for Buy Now, Pay Later (BNPL) models, enabling customers to pay for purchases and make payments in installments, fueling sector growth. Throughout the pandemic, fintech startups were also of greater interest to investors, resulting in significant funding. The availability of capital enabled the creation of innovative embedded finance solutions to address the growing demand for digital financial services and contribute to overall market growth.
Embedded Finance Market Trends
Collaborations are leading the growth of the embedded finance sector by spreading sophisticated financial services for companies. Collaborations among fintech companies, traditional banking institutions, and technology firms make it easier to integrate various financial solutions into non-financial platforms.
For example, in June 2023, embedded finance firm Opnfi and actyv.ai, a business SaaS platform powered by AI and integrating B2B BNPL and insurance offerings, formed a strategic partnership. The two companies collaborated to bring embedded finance solutions designed for businesses in high-growth markets in South Asia, ASEAN, and the Middle East & Africa. This partnership not only speeds up the adoption of embedded finance services but also catalyzes a vibrant ecosystem of combined financial instruments.
The explosive development of e-commerce is offering rich soil for embedded financial services, driving market demand. Online shopping platforms are becoming more and more integrated with financial services, including digital wallets, BNPL solutions, and instant loans, within their platforms. Such integration supports customer experience while broadening the market scope, offering opportunities for companies to provide smooth financial solutions within the e-commerce environment. As the e-commerce sector is flourishing, the embedded finance market is poised for significant growth.
Embedded lending is fueling market expansion by allowing companies to make customers' loans easily available. By embedding lending services into the company's platforms, firms can present customers with fast & easy to use customized loans. This makes loaning easier, increases customer experience, and broadens economic inclusion. Since companies are increasingly implementing embedded lending solutions, the market will flourish and present various & effective financial services to many more.
Embedded Finance Market Analysis
Discover more about the most important segments driving this market
According to finance type, the embedded payment segment led approximately USD 27.3 billion revenue in 2022, as the demand for easy & secure payment options is on the rise. With consumers looking for hassle-free transactions and improved security, companies are embedding payment services into their platforms. For example, in June 2023, Mastercard launched Click to Pay in South Africa in partnership with PayU. The Click to Pay functionality is the next-generation e-commerce technology that enables consumers to pay without inputting card information or keeping sensitive data on the websites of different merchants.
Discover more about the major segments driving this market
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By end use, the retail segment embedded finance market held more than USD 17.3 billion revenue in 2022. The availability of affordable credit solutions for capital requirements is driving segment growth in the market. By providing affordable financial assistance, companies can effectively meet their working capital needs, leading to growth and stability.
For example, in July 2023, MyShubhLife, an embedded finance platform, partnered with PayWorld, a fintech platform focused on retail merchants in India. MyShubhLife via its NBFC Ekagrata aims to provide PayWorld's retailers easy access to credit to meet their working capital needs. Leveraging its embedded technology, MyShubhLife seeks to leverage PayWorld's large network of retailers to extend flexible and affordable credit solutions to merchants. The heightened availability to affordable credit choices strongly promotes retail segment expansion in the market.
Looking for region specific data?
North America embedded finance market size accounted for 35% of the revenue share in 2022, owing to its technological prowess and high digital connectivity. The region's continuous technological advancements in fintech, blockchain, and Artificial Intelligence (AI) form a fertile ground for innovative embedded finance solutions. Extensive internet & smartphone usage creates a conducive environment for seamless adoption, fostering the integration of digital financial services into everyday life. These factors, coupled with strong regulatory support, position North America at the forefront of the industry landscape, driving its rapid growth and evolution.
Embedded Finance Market Share
The major companies operating in the embedded finance industry are
- Banxware
- Cross River
- Finastra
- Finix
- Flywire
- Parafin
- PayPal Holdings, Inc.
- Stripe, Inc.
- TreviPay
- Zopa Bank Limited
In the competitive landscape of the embedded finance industry, dominant players including Stripe Inc. and PayPal Holdings, Inc. strategically forge partnerships to bolster digital payment trends. Through new product launches, they emphasize features, such as BNPL solutions and credit offerings, enhancing customer experience and solidifying their position as market leaders in the rapidly evolving embedded finance sector.
Embedded Finance Industry News
- In September 2023, Manigo, a London-based fintech-as-a-service platform, collaborated with SurePay, a Saudi Arabian payment solution provider, to introduce embedded finance solutions tailored for businesses and consumers across the UK.
- In November 2022, SBM Bank India and Open Financial Technologies Pvt. Ltd. entered into a strategic collaboration to introduce Zwitch, an all-encompassing embedded finance platform. This platform provides fintechs with a user-friendly, versatile API solution, empowering them to create customized financial products effortlessly, using both no-code and low-code methods.
The embedded finance market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD billion) from 2018 to 2032 for the following segments
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Market, By Finance Type
- Embedded Payment
- Embedded Insurance
- Embedded Investment
- Embedded Lending
- Embedded Banking
Market, By Business Model
- B2B
- B2C
Market, By End Use
- Retail
- Healthcare
- Logistics
- Manufacturing
- Travel & Entertainment
- Others
The above information has been provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Russia
- Nordics
- Asia Pacific
- China
- India
- Japan
- South Korea
- ANZ
- Southeast Asia
- Latin America
- Brazil
- Mexico
- Argentina
- MEA
- UAE
- South Africa
- Saudi Arabia
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