Embedded finance is quietly but powerfully transforming how fintechs and non-financial brands work together. No longer just a buzzword, it’s becoming the backbone of digital business models-enabling everything from instant payments in ride-hailing apps to buy-now-pay-later options at checkout. For fintech founders, CTOs, digital transformation heads, and engineering leaders, understanding the “jobs” embedded finance does is now mission-critical.
Introduction: The Rise of Embedded Finance
Embedded finance means integrating financial services-like payments, lending, banking, or insurance-directly into non-financial platforms and products. Instead of sending users to a bank or a separate app, companies can now offer seamless financial experiences right where customers already are. This shift is subtle, but it’s changing the DNA of both fintech and consumer platforms.
As Angela Strange of a16z puts it, “Every company will be a fintech company.” Embedded finance is how that vision is coming to life.
Jobs to Be Done: Why Businesses “Hire” Embedded Finance
Let’s break down the main “jobs” embedded finance is solving for modern businesses and platforms:
1. Launching Financial Products Without Becoming a Bank
- The Job: Offer banking, payments, lending, or insurance without building a bank from scratch.
- How Embedded Finance Delivers: Platforms like Stripe, Unit, and Synapse provide APIs and infrastructure, letting brands launch debit cards, payment flows, or credit products in weeks, not years.
- Example: Shopify uses Stripe to power merchant payments, so sellers get paid instantly without ever leaving the Shopify dashboard.
2. Monetizing Customer Journeys
- The Job: Unlock new revenue streams by embedding financial touchpoints into digital experiences.
- How Embedded Finance Delivers: E-commerce platforms offer “buy now, pay later” (BNPL) at checkout (think Klarna, Affirm), logistics apps provide instant insurance, and marketplaces embed lending for sellers.
- Example: Amazon and Flipkart offer embedded credit and pay-later options, boosting order value and customer retention.
3. Reducing Build Time and Compliance Risk
- The Job: Launch compliant financial features quickly, without building everything in-house.
- How Embedded Finance Delivers: Third-party providers handle licensing, KYC/AML, and regulatory updates, so platforms can focus on user experience and growth.
- Example: Zolve partners with regulated banks and uses embedded finance APIs to offer cross-border accounts and cards to global citizens.
Why This Matters Now
Market Momentum:
- Embedded finance is projected to reach $570.9 billion by 2033, with annual revenues of $230 billion by 2025.
- Companies using embedded finance see 2–5x higher customer lifetime value and 30% lower acquisition costs (McKinsey).
Changing Expectations:
- Customers now expect frictionless, native financial services-whether paying for a ride, buying insurance, or accessing credit.
- Non-financial brands can now compete with banks on user experience and convenience, not just financial products.
Real-World Impact:
- Stripe and Shopify have made instant merchant payouts the norm.
- Plaid and Unit enable fintechs and brands to launch bank-like features with minimal overhead.
- BNPL leaders like Klarna and Affirm are redefining how consumers pay online.
Risks & Considerations
While embedded finance unlocks huge value, it’s not without challenges:
- Integration Complexity: Even with APIs, embedding financial services requires thoughtful architecture and skilled developers.
- Compliance Layering: Regulations like GDPR, PSD2, and local KYC/AML laws must be followed everywhere you operate.
- Resilience and Reliability: Outages or failures at a partner can disrupt your entire customer experience.
- Partner Risk: Choosing the wrong infrastructure partner can lead to service interruptions or compliance failures, as seen with some recent provider collapses.
Call to Action for Platform and IT Leaders
What Should Engineering and IT Teams Focus On?
- Modular, API-Driven Architecture: Build systems that can flexibly integrate with multiple embedded finance providers.
- Compliance by Design: Automate KYC, AML, and data privacy from the start-don’t bolt it on later.
- Resilience Planning: Ensure failover and redundancy for critical financial services.
- Strong Vendor Management: Vet partners for regulatory standing, reliability, and support.
Governance Models That Work:
- Adopt a platform governance model that includes regular compliance reviews, incident response plans, and ongoing partner risk assessments.
- Emphasize documentation, observability, and continuous monitoring.
The Need for Trusted Tech Partners:
- Choose embedded finance providers with proven track records (e.g., Stripe, Plaid, Unit).
- Look for partners who offer clear SLAs, transparent pricing, and robust compliance support.
The Takeaway
Embedded finance isn’t just another feature-it’s a strategic advantage. For fintechs and the platforms that support them, it’s the engine powering new business models, deeper customer engagement, and faster innovation. The winners will be those who build with flexibility, compliance, and resilience in mind-and who choose their partners wisely.
Inspired by research from Bain, McKinsey, a16z, Harvard, and thought leaders like Angela Strange and Alex Johnson, as well as real-world examples from Stripe, Shopify, Plaid, Zolve, and Unit.
