Embedded Finance: Making Payments Possible in New Frontiers

If we thought the pandemic-driven shift to digital payments was an evolution, we’re about to be catapulted into a new world, where payments will become possible in places thought impossible just a few years ago. In fact, embedded finance will be a $777 billion opportunity by 2029. So how can businesses get a piece of it?

Put simply, it’s a way for financial and non-financial businesses alike to integrate payments services like credit or prepaid cards, lending, savings and other financial products into their core services. In doing so, businesses as diverse as consumer goods suppliers, transport operators, healthcare providers and entertainment companies can layer payment services into their processes, attract new customers with seamless payment journeys and generate additional revenues.

What’s really exciting about embedded finance is the simplicity of making complex payments accessible to a wide range of people and businesses, and the creative innovations that are opening new use cases and new opportunities.

The Size of the Embedded Payments Opportunity

When you consider how many businesses deal with payment transactions, the potential scope of the embedded finance opportunity is immense. Currently, consumer payments account for more than 60% of all embedded finance transactions and are set to reach $3.5 trillion by 2026.


The fintech industry has long pursued a fight against friction in payment processes because ultimately we are all consumers. As consumers, we may have different payment habits depending on where in the world we are, but we all hate lengthy new customer sign-up and registration processes; we hate having to reach for our wallets to manually enter our payment information on websites; and we really hate it when we’re redirected to other websites when trying to complete payments.

Embedded payments can certainly ease some of those pain points, by enabling payment processes to be easily layered into existing services. With customer onboarding already completed earlier and elsewhere down the value chain, there’s no need for new customers to waste time filling in details when they sign up for new services — their information can be pre-populated and verified instantly, saving time and generating vast cost savings in the form of customer acquisition and retention.

With all this friction taken out of payment processes, the buying process becomes quicker and easier for the consumer. As a result, companies frequently enjoy higher conversion rates and transaction completions as a result. Additionally, with the customer behavior data generated from each transaction, businesses get deeper real-time insights into who their customers are and how they can better appeal to them.

At a time when the threat of a global recession caused investment levels to plummet by 30% in 2022 to $92 billion, there is renewed urgency to slash costs, improve customer onboarding and retention and upsell to strengthen revenues. In this way, embedded payments can create a positive shift in mindsets. Traditional financial services like current savings or loan accounts that have struggled with being perceived as complicated can be reimagined as compelling customer experiences that ease and improve their daily lives.

The Embedded Payments Elements Businesses Need

Embedded payments sound easy in theory, but making them happen easily can be a daunting task to undertake for any business, let alone a non-financial one with no experience in payments. Questions around scale and scope, pricing structures, adaptability and strategic alignments can all overwhelm a business that is already faced with a multitude of decisions to make.

The holy grail for businesses is an embedded payment flow that is invisible to the customer — that means no redirecting to a third-party website and no separate logins or clunky transaction authentication steps that slow down the payment experience. Businesses need to ensure any service they add into their existing mix doesn’t cause more friction and leave customers frustrated. 

The processing platforms that provide the flow of embedded payments transactions also need to be trustworthy, available and ensure consistent uptime, all the time. Many financial businesses are still relying on outdated legacy platforms that are not equipped to deal with the demands of today’s digital commerce and are too expensive to overhaul.

Another important consideration for many businesses is knowing what to do when it comes to legal and compliance obligations like KYC, PCI DSS or SCA. For any company to effectively introduce embedded payments, it must fully embrace compliance demands and ensure that customers and end users are protected under regulation from the Financial Services Authority (FSA) and the Financial Conduct Authority (FCA). With more and more true user end protection in place, such as from the PSD2 regulation, the way businesses interact with customer information is changing for the better.

The trust factor is especially important when it comes to the consumer payment journey. The safety of their payment data is the number one concern for consumers everywhere — every time a consumer makes a transaction, they are entrusting their funds to the business they’re choosing to deal with. Damage that trust, and businesses will lose those customers forever. Without that trust, embedded finance can’t fulfil its potential.

That’s where cloud-based processing, combined with embedded payments functionality and easily integrated APIs offering new products and services, can really deliver value for money, creating consistent reliable transaction flows and empowering businesses to get embedded payments up and running with no hassle.

One example of how Enfuce is empowering businesses with embedded payments is our recent partnership with ecommerce aggregator Starcart. With so many online stores across Europe, finding good deals or hard-to-find items is time-consuming and costly for consumers, with online sellers suffering from high rates of basket abandonment. 

Working with Enfuce, Starcart can use virtual cards, allowing consumers to buy anything, from anywhere, in any currency, and finish online shopping from multiple retailers in just one click. By using embedded payments in this way, Starcart generates many benefits for its online sellers and gets sales from customers they wouldn’t normally reach. Additionally, with secure virtual card payments, Starcart’s retailers benefit from guaranteed settlement and payment as well as more checkout conversions. Not to mention it can give a much more enjoyable purchase experience to its customers in as few clicks as possible. 

Other Embedded Finance Trends Coming Down the Pipeline

I believe that embedded payments are bringing us to the verge of the next digital payments evolution. It’s not just because of the ease and convenience they provide to consumers and end users. When there is pressure to trim costs, embedded payments can be a big boost to a company’s bottom line, generating a consistent flow of transactions and opening new revenue streams.

In 2023 and beyond, we can expect more focus on rolling out value-added services that make consumers’ everyday lives easier and give businesses competitive differentiators that help them to stand out from the crowd. The growing popularity of buy now, pay later and subscription payments for a range of products and services are laying the foundations for companies to collaborate instead of competing.

There will be new hunger for more innovation and better end user experiences. That in turn will drive even more transformation in financial services, aided by collaboration, stringent compliance and embracing FSA and FCA regulation, and new partnerships among fintechs, banks and non-financial brands. By sharing resources and development and quickening the pace of innovation toward common goals, exciting new use cases for embedded payments can emerge in ways that wouldn’t have been possible just a few years ago.

With new possibilities within reach, payments can move beyond pure functionality and drive purpose, toward greater sustainability for the good of the planet, more holistic customer connections and deeper trust between customers and businesses. When that happens, everyone wins.

Denise Johansson is the Co-founder and Co-CEO of leading European fintech firm Enfuce, a pioneer in putting payment processing in the public cloud. Developing products and services that are deeply rooted in a “people first” and “fintech for good” ethos, she is a bold and fearless disruptor who has helped numerous European fintechs and financial institutions enter new markets quickly with safe, secure and scalable card products. Johansson’s commitment to exceptional solution performance and people-focused service quality has elevated Enfuce to become the payments partner of choice for businesses looking to expand their capabilities and reach new markets.

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