The Global Landscape of Embedded Finance

Article by Phoebe Singer, mmob

Embedded finance is expanding rapidly, but is it the same worldwide? We look at the most successful use cases and businesses in different regions.

Embedded finance is fast becoming one of the most talked about sectors within financial services. There is a great optimism for the collaboration generated by embedded finance, as well as the vastly improved user experience for consumers and SMEs.We explore what embedded finance looks like globally, highlighting the dominating use cases and leading companies in Europe, Asia-Pacific, Middle East and Africa, and the Americas. Is the world experiencing embedded finance transformation?


Embedded lending in the form of ‘buy now, pay later’ (BNPL) has grown rapidly within Europe and in particular the UK, spurred on in part by consumer spending habits and the coronavirus pandemic. The BNPL market in Europe is expected to grow by 35.6% annually, reaching a valuation of US$121,508.7 million by 2029. The largest player in this sector is Swedish unicorn Klarna, followed by Clearpay and PayPal. There is fierce competition in the European BNPL space, with alternative features such as in-store solutions and the removal of late payment fees being used to differentiate competitors, and existing digital banks such as Monzo, Revolut, and Curve have announced plans to offer BNPL solutions.Europe is also leading the embedded insurance drive. Insurtech companies raised almost $800m in VC funding in 2021, and companies such as Wefox and Bought by Many are focussing on opening additional distribution channels to make use of embedded insurance. While it has not yet become mainstream, embedded insurance is likely to be the next big vertical in the European market and can drastically improve the experience of users through improved convenience.


As home of the largest superapps in the world, the Asia-Pacific market is used to interacting with financial services in new and innovative ways, developing solutions to match the demand of a young, smartphone-enabled population. Grab initially started as a ride-hailing app and now has investment, insurance and payment products, among other services, providing financial services to its 180 million users. Embedded finance has a key role in play in Asia and other regions with a large unbanked population, as users previously excluded from traditional finance can access services easily from non-financial companies.While lending is rapidly growing, the largest vertical is embedded insurance. Numbers of insurtech companies are increasing particularly in China and India as businesses look to improve insurance availability. With the growth of e-Commerce giants such as Alibaba in the region, more users look to insure goods at the point of sale and in transit, creating a leading embedded insurance industry.

Middle East & Africa

Similarly to the Asian market, embedded finance has the opportunity to bring financial services to a large unbanked population. The industry grew by 45.3% from 2021 to reach $10.3 billion this year, demonstrating the rapid growth of embedded finance within the region.Embedded insurance is the largest vertical in this region, having seen growth specifically related to the mobility sector. Led by ride-hailing giants such as Uber and Careem, embedded insurance products have seamlessly protected drivers and users in cars and the increasingly popular mopeds and e-bikes in the region.Embedded payments are currently being tested in the region, the improvement of which has been a priority of governments and investors. Perhaps in a different trend to other regions, there have recently been a high number of collaborations between fintechs and offline businesses as the market looks to serve both the financially savvy and unbanked populations. Flutterwave’s Fintech-as-a-Service solution broadens its offering from payment solutions to the tools to build financial products, enabling African businesses to make embedded finance work for them.While rhetoric in Europe has largely looked to displace traditional finance, with phrases such as ‘Every company will be a fintech’ and ‘Banking is necessary, but banks are not’, sentiment in the Middle East & Africa looks at the core role of banks within the embedded finance ecosystem, as banks will facilitate the embedded processes. It is assumed, however, that users will become more indifferent to which bank is supplying the process and banks should look to collaborate and white-label their products.

The Americas

While embedded payments hold a market share, embedded lending is becoming more popular in Latin America. Embedded finance platform, Valari, seeks to improve credit opportunities for SMEs by integrating a ‘credit button’ within the technology companies’ apps with a single API. Given that SMEs make up 99.5% of companies in the region, embedded lending has the opportunity to improve financial services for businesses and users alike. Similarly to the Asia-Pacific region, Latin America has seen the emergence of superapps such as on-demand delivery services Rappi and Mercado Libre. It is hoped the embedding of financial products within shopping and messenger applications will support consumers and spur the growth of the Latin American fintech scene.In the US, embedded finance revenue reached $22.5bn in 2020 and is expected to grow tenfold to over $230bn by 2025, a large proportion of which is the embedded payment industry. Embedded insurance is quickly developing, with startups such as Lemonade and DealerPolicy bringing insurance to consumers in innovative ways. Lending is a growing market, particular SME-lending as businesses struggle to gain funding through traditional finance and accelerated by the pandemic. The US embedded finance market is growing rapidly to counter traditional financial practices and improve user access.

Embedded finance is touching all corners of the financial services industry. New use cases are being created through emerging technology and new partnerships across verticals. While the popularity of embedded products differs between the regions, innovation is happening across the industry. The opportunities for embedded finance to improve the financial lives of users is simply massive and mass adoption of end-to-end journeys is within reach following COVID-19’s promotion of increased digital services.

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