The definition
Embedded finance is the integration of financial products and services directly into non-financial platforms and applications. Instead of going to a bank or financial institution for insurance, payments, lending, or investment products — users access these services inside the tools they already use.
The result: financial functionality feels native to the product, not bolted on.
The six main categories
1. Embedded payments
The most mature and widely adopted category. PayPal in eBay (1998) was an early example. Today, a rider-hailing app’s in-app payment, a restaurant’s tap-to-pay on the waiter’s tablet, or a freelancer platform’s payout system are all embedded payments.
2. Embedded lending
Businesses or consumers borrow money within a platform they already use. Shopify merchants access Shopify Capital. Amazon sellers access Amazon Lending. SMEs access funding through their accounting software or payment dashboard.
This is the highest-revenue-per-deal category for platforms. See: What Is Embedded Lending?
3. Embedded insurance
Insurance offered at the point of need within a third-party platform. A travel booking site offering flight delay cover at checkout. A courier platform offering per-parcel insurance. An ecommerce platform offering product liability cover for sellers.
4. Embedded investment
Investment products accessed within non-investment platforms. Round-up saving/investing (Monzo, Revolut). Stock trading within a banking app. Tax-efficient investment wrappers integrated into accounting software.
5. Embedded banking
Banking services (current accounts, cards, account numbers) offered by non-banks using Banking-as-a-Service (BaaS) providers. Uber offering a current account and debit card to drivers. Shopify offering a business banking account to merchants.
6. Embedded wealth management
Advisory or automated investment management embedded in employer HR platforms, payroll products, or accounting software. Pension auto-enrolment initiated during payroll runs is an early form of this.
Why is it happening now?
Three structural enablers:
API infrastructure: BaaS and fintech-as-a-service providers (Stripe, Railsbank, ClearBank, Modulr) have made it possible to launch financial products without building core infrastructure from scratch.
Open Banking / PSD2: mandated data sharing between banks and third parties enables account data access with user consent — the backbone of credit decisioning, payment initiation, and financial management tools.
FCA regulatory evolution: the FCA’s regulatory perimeter has matured to accommodate embedded models. Non-financial firms can partner with regulated entities and act as introducers or regulated agents, rather than needing to become regulated entities themselves.
The commercial model
For platforms embedding financial products, the commercial model is typically:
- Revenue share: a percentage of interest, fees, or premiums generated through the platform’s distribution
- Referral fee: a fixed fee per completed transaction
- Float income: a share of interest on funds held in embedded accounts (relevant for embedded banking)
Embedded lending via a credit broker generates revenue share — typically up to 30% per funded deal for platforms working with Fundably. This makes it one of the highest-yield embedded finance categories available to B2B platforms today.
Where to focus for B2B platforms
If you run a B2B SaaS, marketplace, or platform serving UK businesses, embedded lending is typically the highest-priority embedded finance product:
- High deal value (average funded SME loan: £50k–£250k)
- High revenue per event (up to £5,000+ commission)
- Relatively simple to integrate (iFrame live in <48 hours)
- No balance sheet risk or regulatory overhead
See how Fundably’s embedded lending works for platforms here.