The Embedded Finance Market is estimated at $115.8 billion in 2024 and is projected to reach $251.5 billion by 2029, at a CAGR of 16.8% from 2024 to 2029, according to a new report by MarketsandMarkets.
Embedded Finance disruption
The embedded finance market is experiencing a massive disruption because of the development of technologies such as API, AI, and Blockchain. This capability allows companies to incorporate financial services into their platforms, delivering consistent and unique solutions. Furthermore, demand for complex, value-added, readily available services that can be offered in real-time has prompted firms in almost all industries to embrace Embedded Finance.
This shift helps non-financial firms to provide banking, lending, insurance, and payment services, which fortifies customer relations and generates more revenues. This market is divided into segments based on different aspects, such as the type, business model, and industry. These segments collectively offer a comprehensive overview of the evolving Embedded Finance landscape and its potential business implications.
By 2029, the Embedded Finance market is expected to have a robust growth trajectory
Substantial growth in the embedded finance market is driven by the rising digitalisation of financial services and the emergence of customised solutions across diverse industries. The seamless integration of financial services into non-financial platforms is being facilitated by technologies such as APIs and artificial intelligence, which are playing a crucial role in this transformation. Sectors such as healthcare, eCommerce, and transportation are increasingly adopting embedded payments, lending, and insurance to improve customer experiences and streamline operations. This expansion is driven by both B2B and B2C models, as businesses collaborate with FinTech providers to integrate financial services into their ecosystems. Customer relationships are being strengthened and new revenue opportunities are being unlocked.
Based on industry, the healthcare sector is expected to have the highest growth rate
The growing need for hassle-free, patient-focused payment solutions has led to the incorporation of embedded finance solutions into healthcare platforms. Digital health technologies, such as telemedicine and wearable devices, are driving the integration of payment, lending, and insurance options in the healthcare sector. Regulatory support for innovation in FinTech and healthcare, along with the demand for affordable and precise billing systems, is speeding up adoption for Embedded Finance solutions. Moreover, collaborations between FinTech companies and healthcare providers are making way for tailored financial products, enhancing patient access to care while simplifying provider revenue cycles. These factors are driving the widespread adoption of Embedded Finance in the healthcare industry, supporting the growth rate of the market and underscoring its transformative potential in the healthcare sector.
FinTech innovation is thriving
FinTech innovation is giving way to a thriving market in North America. Companies are now directly incorporating financial services, such as payments, lending, and insurance, directly into their core offerings. Companies such as Stripe, PayPal, and Plaid, which provide comprehensive solutions to enable other businesses to integrate financial capabilities efficiently, are leading the Embedded Finance sector in the United States. Canada is witnessing growth in the market, with companies like Shopify integrating payment and financing options into their eCommerce platform, thus improving the customer experience. The US Embedded Finance market is more mature, whereas Canada is catching up and the market growth would be facilitated by its robust technology ecosystem and supportive regulation.
- Embedded Finance