Instead of being sent to a separate site, you can take care of financial tasks — like paying for a product, tipping a driver, or applying for credit — without ever leaving the app or website you’re on. If you have used a food delivery app to check out or noticed a Buy Now, Pay Later (BNPL) option at an online store, you have experienced embedded finance firsthand.
After spending years in banking, I find this shift both exciting and long overdue. It’s changing the way people expect to handle money and how businesses provide value. In this article, I will walk you through how embedded finance can benefit your business, how it is different from open banking, and which companies are using it well. I will also cover some of the risks and limitations and share a few insights into where the trend is headed next.
Key takeaways:
- Embedded finance integrates financial services into non-financial platforms.
- It allows you to pay, borrow, or insure without leaving an app or site.
- It helps your business improve convenience and drive new revenue.
- It differs from open banking, which shares data across banks.
- Use cases include online checkouts, ride apps, and business tools.
How embedded finance works
The easiest way to understand how embedded finance works is to think about the tools you already use every day. Instead of going to a separate banking website or app to complete a payment, apply for credit, or send money, embedded finance brings those actions into the platforms you are already using. From your point of view, it feels simple and seamless. Behind the scenes, it’s powered by financial providers using secure technology like Application Programming Interface (API).
Here’s what that process usually looks like:
- A non-financial business offers a financial feature like payments, loans, or insurance inside its app or website.
- The customer uses the feature during their normal activity, such as shopping or booking a service.
- A third-party financial provider powers the feature, handling compliance, money movement, applications, and underwriting in the background.
- The customer stays in the same experience, never having to leave the platform or interact with a traditional bank directly.
That setup benefits everyone involved.
Pros & cons of embedded finance
Benefits
From my experience in banking, I’ve learned that people don’t want to jump through hoops to complete a payment or apply for credit; they want tools that work quietly in the background. That’s exactly what embedded finance delivers.
In short, embedded finance turns everyday platforms into powerful ecosystems. It adds value without adding complexity, which is exactly what modern users expect.
Challenges & considerations
As much as I love how embedded finance is reshaping the way we do business, it is not without its complications. There are important risks and responsibilities to consider, especially if your small business is thinking about adding financial features to its platform.
From compliance to customer trust, here are a few things you’ll want to keep in mind.
Offering embedded finance is a smart move for many businesses, but it’s not a plug-and-play decision. You need the right partners, a clear plan for customer support, and a solid understanding of the responsibility you’re taking on.
Tip from a former banker: Ensure you fully understand who your embedded finance partner is and how it handles compliance, security, and customer service before offering any financial service through your platform. Your brand will be the one customers remember, whether things go smoothly or not.
What’s next for embedded finance?
From what I’ve seen in both traditional banking and newer fintech spaces, embedded finance is just getting started. The tools we’re seeing today, like integrated business banking, spend management, and real-time insurance, are only the beginning.
- New industries will join the trend. Over the next few years, I expect embedded finance to move deeper into industries that haven’t traditionally offered financial services.
- Healthcare platforms may start offering payment plans or financing right inside patient portals.
- Freelance and creator tools could embed instant payments, tax tools, or benefits enrollment.
- Construction and logistics platforms might add financing or insurance quoting directly into their workflows.
- Tools for small businesses will keep getting smarter. What stands out to me most is how this shift brings enterprise-level tools to small businesses. As integrations get easier and fintech partnerships expand, embedded finance will become a standard expectation, not just a nice-to-have feature.
- Early adopters will have the advantage. If you’re building a product or running a small business, this is the time to explore embedded finance. Platforms that adopt these tools early can improve the user experience, increase revenue, and build long-term loyalty.
Embedded finance vs open banking
Both embedded finance and open banking are transforming the way businesses and consumers interact with money, but they work in different ways. Embedded finance brings financial services directly into everyday platforms, whereas open banking connects different financial institutions to give users more control over their data and accounts.
Who should consider using embedded finance?
In my experience, embedded finance isn’t just for large tech companies or banks. It’s a smart move for many SMBs, too, especially if you want to streamline operations, offer more value to your customers, or create new revenue streams without building an entirely separate financial product.
If you run a platform, service, or app where users already engage in transactions, embedded finance can help you do more without sending people elsewhere. I’ve seen it work well for:
- E-commerce platforms wanting to offer instant payments, financing, or even insurance at checkout
- Business software providers looking to build in banking, invoicing, or expense tools
- Marketplaces or service platforms where users pay, tip, or subscribe within the platform
- Small businesses seeking an all-in-one banking and budgeting experience without juggling multiple tools
Now is a good time to think about how financial services could fit into your customer experience, even if you’re not offering them yet. The platforms that start embedding finance early are often the ones that stay top of mind with users down the road.
If you’re ready to explore embedded finance for your business, the best tools can make all the difference. I’ve worked with enough banking products to know that choosing the right partner can save you time, money, and a lot of headaches.
Here are some top options I recommend exploring:
Relay: Best for banking and bookkeeping in one place
Pros
- Embedded features like bill pay, transfers, and budgeting tools
- Direct integration with QuickBooks and Xero
- Multiple accounts for cash flow management
Cons
- No physical branches
- No personal banking options
- No lending products
Standout features
- Multiple no-fee business checking accounts
- Automatic bill pay and approval workflows
- Real-time syncing with accounting software
- User permissions for teams or accountants
- Seamless embedded finance experience with no need to leave the platform
Relay offers full-service digital business banking designed specifically for entrepreneurs and small teams. You can create and manage multiple checking accounts, automate bill pay, connect directly to accounting software, and manage transfers and budgeting. It’s a great example of embedded banking that simplifies cash flow management without the need for a traditional bank branch, helping you stay organized and in control of your finances.
Visit Relay
North One: Best for mobile-first banking with built-in tools for payments and budgeting
Pros
- Mobile-first banking with embedded funds management
- Robust budgeting tools
- ACH, wires, and direct deposit supported
Cons
- No physical branches
- No lending products
- Customer support is limited to business hours
Standout features
- Designed for freelancers, startups, and small businesses wanting banking and cash flow
- Real-time budgeting with customizable envelope categories
- Embedded payments and transfers without switching platforms
- Integrations with QuickBooks and other accounting software
North One is a digital business banking platform built for speed and simplicity. You can send ACH and wire payments, set up envelopes for budgeting, and manage everything from a mobile app. It’s especially helpful if you’re a busy business owner who doesn’t want to juggle separate apps for payments, budgeting, and banking.
Visit North One
Ramp: Best for flexible credit and built-in expense controls
Pros
- Smart corporate cards with embedded spend management
- Real-time expense tracking
- Automatic account reconciliation with accounting tool integration
Cons
- Approval requires strong financials
- No banking or checking features
- Not ideal for small teams
Standout features
- Unlimited virtual and physical corporate cards
- Real-time spend limits and automated approvals
- AI-powered expense categorization and duplicate detection
- Seamless integration with QuickBooks, NetSuite, and Xero
Ramp isn’t just a corporate credit card with real-time reporting; it’s a complete spend management platform with real-time tracking of expenses. While it doesn’t offer consumer BNPL tools, it lets you manage cash flow through structured spending, which functions as the B2B equivalent. What I like most is how it blends embedded finance with automation, helping your business save both time and money.
Visit Ramp
Emburse: Best for managing multiple employees, frequent travel, or complex expense policies
Pros
- Simplifies expense management, embedded spending, and automations
- Virtual and physical cards for employee spending
- Account and financial integrations for easier money management
Cons
- Team setup at onboarding required
- No traditional banking services
- Pricing may vary based on company size
Standout features
- Smart expense tracking with policy enforcement
- Reimbursement automation and digital receipt capture
- Integration with platforms NetSuite and QuickBooks
- Customizable approval workflows and spending rules for teams
Emburse focuses on making expense and travel management easier. You can issue employee cards, track spending, and automate reimbursements, all from within the same system. It’s a smart solution if your growing company needs more control without extra manual work.
Visit Emburse
The Hartford: Best for reliable insurance options built into your workflow
Pros
- Trusted provider with a long-standing reputation
- Wide range of small business products can be embedded
- Integration with other business platforms for easier financial management
Cons
- Guided support may be needed for some policies
- Coverage not available in all industries
- Underwriting times may be lengthy
Standout features
- Embedded business insurance offered through payroll and small business platforms
- Instant quoting and coverage options for general liability, workers’ compensation, and business owner’s policy
- Flexible policy management via digital tools and partner dashboards
- Deep experience serving SMBs across industries
- Ideal for businesses wanting protection built into the tools they already use
The Hartford is a well-established insurance provider known for delivering reliable coverage options that fit seamlessly into your business workflow. It’s trusted by small businesses that want strong, dependable protection integrated into tools they already use, making it easier to secure policies during processes like payroll setup or onboarding. With The Hartford, you’re getting proven coverage from a company with decades of experience.
Visit The Hartford
Next Insurance: Best for seamless online insurance that’s fast to quote, easy to buy, and designed for small business integrations
Pros
- Fast online quotes
- Easy integration with embedded finance platforms
- Transparent pricing
Cons
- Coverage is limited to certain business types
- Does not offer coverage in all states; depends on the industry
- Limited options for customer support
Standout features
- Built specifically for embedded use; partners can offer insurance at the point of need
- Instant quotes and instant coverage with full online policy management
- Coverage includes general liability, professional liability, and commercial auto
- Partner integrations through APIs or embeddable widgets
- Ideal for businesses wanting to offer insurance on their platforms without redirecting users elsewhere
Next is one of the most forward-thinking insurance companies I’ve come across, built entirely for quick, digital experiences. It’s designed for small businesses wanting fast, self-service coverage without paperwork or delays. You can get quotes, compare options, and purchase policies online in minutes, often right inside the business platforms you already use, like payroll or marketplace apps.
Visit Next Insurance
Frequently asked questions (FAQs)
Traditional banking requires customers to visit a bank’s website or app to complete a transaction. Embedded finance brings that same financial service directly into the platform the customer is already using.
No. Most businesses partner with fintech companies or licensed providers that handle the banking, compliance, and infrastructure. You don’t need to be a bank, but you do need to choose your partners carefully.
Not at all. Small businesses, software platforms, and even local service providers can use embedded finance tools to simplify payments, offer financing, or provide insurance. It’s about finding the right tools to match your business needs.
The biggest challenge is maintaining trust. If something goes wrong with a payment or insurance policy, customers will often turn to your business for support, not the third-party provider. That’s why it’s important to partner with companies offering strong compliance, support, and security.