The rise of “The Embedders’
When Walmart, the world’s largest company by revenue, announced earlier this year they are planning to launch their own fintech start-up and hired two Goldman Sachs veterans, it became clear this conglomerate is preparing to become a major force in the financial sector. In an industry like retail, where razor thin margins are the norm, the chance to open up new revenue opportunities simply can’t be turned down.
“Embedded Finance is a $7.2 Trillion global market opportunity for entrepreneurial businesses to grab over the next 10 years. The benefits are significant for all businesses in all sectors. The starting point is to fully understand what it is, how it works and the practicalities of how to create compelling new propositions that exploit it”.
Simon Torrence, Executive Working Group Member, World Economic Forum
As embedded finance continues to enable non-financial enterprises to provide banking services in a way that works for customers and brings advantages to themselves, it’s not a surprise that major players are getting involved. It is not just retail, with everyone from ecommerce players, manufacturers and health care providers working to offer financial products and services directly to their customers.
“As retailers increasingly seek to personalise their customer relationships and selling strategies, extending our business model to offer financial products and services becomes increasingly attractive and rational.
Financial Services offer a depth & relevance to customer relationships which compliments and builds on existing retail interaction; enabling us to serve a broader range of customer needs and – through richer understanding – serve them better”,
Andrew Murphy, Executive Director, Operations, John Lewis & Waitrose.
Enterprises aren’t just embracing embedded finance for the financial benefits with the improved customer experience gained from offering a user-friendly way to access financial products also being a major selling point. Utilising embedded finance, airline Finnair introduced a branded credit card with Nordic bank Nordea to create a seamless experience for clients.
With Nordea as their banking partner, Finnair can give their customers an immediate response when they apply for a credit card, far quicker than the previous manual application process. Nordea’s Consumer Finance API acts as the connecting layer between the customer and business, without the customer having to leave the main interface.
Reselling a financial product, like offering customers access to a third-party borrowing service to pay for an item, has traditionally been used by many companies. Embedded finance completely removes the need to pull the customer away from a single interface and streamlines the process.
The growth of the ‘Buy Now Pay Later’ (BNPL) model at ecommerce firms, particularly used by younger consumers, has been greatly enabled by advances in embedded finance. Online fashion retailers have taken advantage of fintechs like Klarna and Paypal to provide easy lending on purchases, with this practice only increasing as online sales grow.
Brands like ASOS and Ikea have adopted Klarna to meet both consumer demands and encourage customers to spend more. According to Klarna’s own research, retailers typically see a 68% increase in the average order value when using their service and 44% of users would have abandoned their purchase if Pay later wasn’t available.
“Thanks to increased competition in the Buy Now Pay Later space, better user experience, and financial conditions have become available for the end consumers. As a result, the combination of BNPL products and flexible financing options is quickly becoming a central part of the payment strategy of merchants of any size.”
Matteo Gamba, Product Lead – Payments, Wayfair
Healthcare providers, too, are currently experimenting with how they can use embedded finance to improve how patients are matched with insurance plans. As healthcare firms increase their use of advanced AI tools to better predict patient outcomes, they can use this data to offer a wider range of personalised coverage payment options.
From online real estate platforms partnering with fintechs to provide mortgages or home insurance to car dealerships transforming how they offer insurance and car financing through embedded finance that can reduce the number of expensive repossessions; there is seemingly no end to the types of enterprises that can benefit from embedded finance.
To join in the discussion, and hear more from this exciting community, join us on September 2 – 3, 2025 for FTT Embedded Finance & Super-Apps North America.
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Written by Finbarr Toesland, Editorial Contributor.