How non-financial platforms are embedding banking, payments and lending via open APIs to reshape the financial services landscape.

The concept of embedded finance — the offering of financial services (payments, lending, deposits, insurance) by non-financial companies or platforms through API integrations — has rapidly moved from experiment to mainstream. Coupled with open banking and open finance initiatives, the ecosystem of APIs is powering a new wave of financial service embedding.

According to projections, the open-finance market may reach some US$150 billion by 2027, with embedded finance processing over US$7 trillion in transactions by 2026.

Why embedded finance matters
Embedded finance takes the friction out of the payment/financial experience by placing financial services where the customer already is — a retailer’s checkout, a ride-share platform, a B2B supply chain portal. This enhances user experience, strengthens platform loyalty and opens new revenue streams for platforms and financial-service providers alike.

For example, a retailer embedding a buy now, pay later (BNPL) option at checkout or an e-commerce platform issuing a co-branded debit card via a banking-as-a-service (BaaS) partner are both manifestations of embedded finance.

Open APIs – the underpinning technology
The shift is enabled by open APIs: regulated frameworks (as in Europe’s PSD2) compel banks to expose customer and payment data (with consent) for fintechs and third parties. This creates the plumbing for embedded finance and platform-based financial services.

In parallel, many licensed banks and fintech infrastructure providers offer BaaS (Banking-as-a-Service) platforms with full-stack services (account issuance, payments, compliance) that non-bank companies can integrate via APIs.

Applications across sectors
Retail and e-commerce: embedding payment and financing options directly at point of sale.
Mobility and transport: ride-share platforms offering wallets or reward-linked payment services.
Supply chain/B2B: manufacturers or distributors offering embedded payment terms or financing to their ecosystem partners.
Healthcare/insurtech: showing payment plans or lending at the point of appointment booking.

Benefits and strategic implications
For platforms: new revenue via interchange, embedded credit, recurring subscription models.
For consumers: smoother, context-aware financial journeys without leaving the platform.
For banks/fintechs: partnership opportunities, wider distribution of their services beyond traditional channels.

Challenges to navigate

• Regulatory complexity: Financial services embedded into non-bank platforms comes with compliance burden (e.g., KYC/AML, disclosures).

• Risk and credit management: Especially when embedding lending or financing, platforms must ensure proper underwriting, data governance and consumer protection.

• Technology and integration: Ensuring API maturity, data security, scalability, and resilience.

• Partnership governance: Aligning non-bank platforms, banks, and fintechs in strategy, revenue share, and brand control.

Future outlook
Embedded finance is poised for further acceleration as more industries open themselves to financial-service bundling. Key trends include:

• Deepening of “platform + finance” business models.

• Growth of B2B embedded finance (not just consumer).

• Increasing use of analytics and data insight across embedded services for personalization.

• Greater regulatory scrutiny and standardisation of embedded finance offerings.
  
  In essence, embedded finance and open API ecosystems are redefining the structural architecture of payments and financial services. Where payment used to occur as a separate step, the service is now embedded at the point of action—making finance invisible and instantaneous.
  
  Closing Thoughts:
  For businesses, embracing embedded finance means thinking beyond the product to the broader experience: where can payments, credit or deposit services be built into the flow? For consumers, the experience becomes frictionless, context-rich, and intelligent. As the API economy matures, the winners will be those platforms that embed financial services seamlessly, securely, and with compliance built in.
  
  Reference sites:

1. “Embedded finance and Banking-as-a-Service: The core banking implications”, Finextra, https://www.finextra.com/blogposting/29710/embedded-finance-and-banking-as-a-service-the-core-banking-implications

2. “The API economy: How Embedded Finance is connecting customers to the world”, FintechStrategy, https://www.fintechstrategy.com/blog/2025/03/12/the-api-economy-how-embedded-finance-is-connecting-customers-to-the-world/

3. “Embedded Finance: unlocking the $500bn opportunity”, Capgemini, https://www.capgemini.com/insights/expert-perspectives/embedded-finance-unlocking-the-500bn-opportunity/

4. “Embedded Finance & Open Banking: Why APIs are the New Standard”, Digital API Craft, https://resources.digitalapicraft.com/blog/embedded-finance-open-banking-why-apis-are-the-new-standard

5. “Embedded Finance Continues to Reshape Financial Ecosystems”, PYMNTS, https://www.pymnts.com/innovation/2025/embedded-finance-boom-continues-to-reshape-financial-ecosystems/

Serge Boudreaux – AI Hardware Technologies, Montreal, Quebec
Peter Jonathan Wilcheck – Co-Editor Miami, Florida