Jul 30, 2025
Embedded finance continues transforming how mid-market companies access and integrate financial services directly into their platforms. This shift allows businesses to offer payment processing, lending, insurance, and banking services without building financial infrastructure from scratch.
The embedded finance market reached $108.55 billion in 2024 and shows strong adoption patterns among mid-sized enterprises seeking streamlined financial operations. Key players like Stripe and PayPal lead this expansion while banking-as-a-service platforms drive adoption across various industries including e-commerce and healthcare.
1) Global embedded finance market valued at $54.4 billion in 2022
The embedded finance market reached $54.4 billion in 2022, marking a significant milestone for businesses integrating financial services directly into their platforms. This valuation reflects the growing adoption of embedded payment solutions, lending options, and insurance products across various industries.
Mid-market companies are driving much of this growth by embedding financial tools into their customer experiences. These businesses recognize that offering seamless payment processing, instant credit approvals, and integrated banking services creates competitive advantages.
The market's substantial size demonstrates that embedded finance has moved beyond experimental implementations. Companies now view these integrated financial services as essential business infrastructure rather than optional features.
This $54.4 billion figure represents revenue generated by businesses that successfully integrated financial services into their core operations. The data shows that mid-market firms are increasingly choosing embedded solutions over traditional standalone financial products.
Financial technology adoption has accelerated as companies seek to control more of their customer journey. Embedded finance allows businesses to capture revenue that would otherwise flow to external financial service providers.
2) Projected market size of $290.61 billion by 2030
The embedded finance market is set to reach $290.61 billion by 2030, representing massive growth potential for mid-market companies. This projection reflects the increasing adoption of integrated financial services across various industries.
Mid-market firms are driving significant portions of this growth. They're integrating payment processing, lending, and insurance products directly into their platforms and customer experiences.
The market expansion stems from businesses recognizing embedded finance as a revenue opportunity rather than just operational infrastructure. Companies can now monetize financial services that previously generated no income.
B2B embedded finance solutions account for a substantial portion of projected growth. Mid-market companies are particularly well-positioned to capitalize on this trend due to their established customer relationships and operational scale.
The $290.61 billion figure encompasses various embedded finance categories including payments, lending, insurance, and banking services. Each segment presents distinct opportunities for mid-market businesses to enhance their service offerings.
Market growth is accelerating as more companies view financial services integration as essential for competitive advantage. The projected market size indicates that embedded finance will become standard practice rather than an innovative differentiator by 2030.
3) CAGR of approximately 23.3% from 2023 to 2030
The embedded finance market shows strong growth momentum with a projected compound annual growth rate of 23.3% through 2030. This expansion rate positions embedded finance among the fastest-growing fintech segments.
Mid-market companies are driving significant portions of this growth as they integrate financial services directly into their business platforms. The CAGR calculator methodology demonstrates how sustained double-digit growth compounds over multi-year periods.
Several technology sectors exhibit similar aggressive growth patterns. The global digital payment market projects 21.4% CAGR from 2025 to 2030, indicating broader fintech acceleration.
Companies adopting embedded finance solutions benefit from this market expansion through new revenue streams and improved customer retention. The 23.3% growth rate suggests the market will more than triple in size by 2030.
Mid-market firms positioning themselves early in this growth cycle gain competitive advantages through enhanced financial service offerings. The sustained growth trajectory indicates embedded finance represents a fundamental shift rather than a temporary trend.
4) Mid-market firms adopting embedded payments solutions rapidly
Mid-market companies are quickly embracing embedded payment technologies to streamline operations. These solutions integrate directly into existing business software platforms.
The global embedded finance market reached $104.8 billion in 2024 and continues expanding rapidly. Payment volumes through embedded channels are projected to hit $6.5 trillion by 2025.
Mid-market firms benefit from reduced payment processing complexity and improved cash flow management. Embedded solutions eliminate the need for separate payment systems and reduce transaction friction.
Software companies serving mid-market businesses are transitioning from subscription models to embedded payment revenue streams. This shift allows them to enhance their revenue strategies significantly.
Retail and e-commerce platforms currently lead embedded finance adoption among mid-market segments. However, adoption is spreading across multiple industries as businesses recognize operational benefits.
The technology offers mid-market firms payment solutions tailored specifically to their business management needs. Integration typically occurs within weeks rather than months compared to traditional payment system implementations.
5) Embedded lending growing as key service among mid-market companies
The embedded lending market is experiencing rapid expansion. Embedded lending market revenue reached $7.66 billion in 2025 and is projected to hit $28.43 billion by 2032.
This represents a compound annual growth rate of 20.6% over the forecast period. The strong growth reflects increasing demand from businesses seeking integrated financial solutions.
Mid-market companies are gradually adopting embedded lending despite initial hesitation. Research shows that only 20% of U.S. middle-market firms prefer embedded finance over traditional financing options.
High-uncertainty firms show particular reluctance toward these new financing methods. However, adoption rates continue climbing as companies recognize the convenience benefits.
Embedded lending allows businesses to access credit directly through existing platforms they already use. This integration eliminates the need to navigate separate loan applications with traditional lenders.
The technology transforms how mid-market companies manage cash flow and working capital needs. Companies can secure financing without disrupting their established workflows or vendor relationships.
6) Banking-as-a-service platforms driving adoption in mid-sized businesses
Mid-sized enterprises are embracing banking-as-a-service platforms at an accelerated pace. The BaaS platform segment accounts for 25.6% revenue share in 2024 and continues growing at 14.8% annually.
These companies find BaaS platforms particularly attractive because they eliminate the need for extensive banking infrastructure investments. Mid-market firms can integrate financial services directly into their existing business processes without building systems from scratch.
The adoption rate among mid-sized enterprises reflects their position between startups seeking agility and large corporations with established banking relationships. They possess sufficient transaction volumes to justify embedded finance solutions while maintaining flexibility to implement new technologies quickly.
BaaS platforms enable these businesses to offer payment processing, lending, and account management services to their customers. This creates new revenue streams while improving customer retention through integrated financial experiences.
The technology removes traditional barriers that previously made financial service integration complex and expensive for mid-market companies. They can now deploy banking features in weeks rather than months or years.
7) Mid-market firms increasingly integrating embedded insurance products
Mid-market companies are rapidly adopting embedded insurance as part of their digital transformation strategies. The embedded insurance market is projected to reach $700 billion in gross written premiums by 2030.
These firms integrate insurance directly into their existing products and services rather than offering it separately. This approach reduces friction for customers and creates new revenue streams.
Manufacturing companies embed product warranties into their sales processes. Financial services firms bundle insurance with loans and investment products.
The integration eliminates traditional insurance sales barriers. Customers receive coverage automatically during their primary purchase without additional paperwork or lengthy approval processes.
Mid-market businesses report higher customer satisfaction when insurance coverage activates seamlessly. The embedded model also provides companies with valuable customer data and insights.
Technology platforms now offer APIs that allow mid-market firms to integrate insurance products within days rather than months. This speed enables companies to test different insurance offerings and optimize their embedded finance portfolios quickly.
Companies using embedded insurance see increased customer retention rates. The convenience factor drives repeat business and strengthens customer relationships across multiple product lines.
8) Stripe leading in embedded payments for mid-market firms
Stripe has established itself as the dominant player in embedded payments for mid-market companies. The platform allows businesses to integrate payment solutions directly into their existing software and applications.
Mid-market firms choose Stripe because it offers comprehensive embedded finance solutions that go beyond basic payment processing. Companies can add features like expense cards, loans, and financial accounts to their platforms.
The company's approach differs from competitors by unbundling its services. This means businesses can use Stripe's embedded financial tools even if they process payments through other providers.
Stripe's platform approach has positioned it well as the embedded finance market grows rapidly. The global embedded finance market is projected to reach $588.49 billion by 2030.
Mid-market firms benefit from Stripe's banking-as-a-service infrastructure. This allows them to add financial features quickly without building complex payment systems from scratch.
The platform helps businesses increase customer engagement and create new revenue streams. Companies can offer seamless payment experiences that keep users within their applications rather than redirecting to external payment pages.
9) PayPal expanding embedded finance offerings for mid-sized enterprises
PayPal has reached $30 billion in small business loans, demonstrating the scale of its embedded finance operations. The company integrates lending directly into merchant workflows rather than offering standalone loan products.
PayPal's embedded finance approach notifies users of pre-approved loan amounts through their existing dashboard. This eliminates the need for separate applications or credit checks.
The payment giant offers multiple finance products including PayPal Working Capital and PayPal Business Loan. These services fall under merchant finance and extend credit based on transaction history.
Mid-sized companies benefit from PayPal's single-click payment setup that connects multiple platforms. This reduces time spent on payment provider selection and troubleshooting across different support systems.
Former PayPal executives have launched new platforms specifically targeting mid-market embedded finance needs. These full-stack embedded finance platforms focus on helping non-fintech enterprises integrate card programs into their core offerings.
The embedded finance market is projected to reach $3.6 trillion by 2030. PayPal's model demonstrates how financial services blend seamlessly into existing business platforms.
10) Railsr secured $24 million funding to scale embedded finance tech
Railsr raised $24 million in funding from existing investors D Squared Capital and Moneta Venture Capital in October 2023. The UK-based embedded finance company operates under the trading name for Embedded Finance Limited.
The funding round came just months after Railsr underwent administration earlier in 2023. The company's chair Rick Haythornthwaite said the new capital demonstrated they were "bouncing back" from previous challenges.
Railsr provides banking-as-a-service platform technology that enables businesses to embed financial services into their products. The company formerly operated under the name Railsbank before rebranding.
The fresh capital allows Railsr to rebuild momentum in the embedded finance market. The funding came three months after appointing a new CEO to lead the company's recovery efforts.
Mid-market firms can leverage Railsr's infrastructure to offer digital wallets, virtual credit cards, and other financial products without building the technology in-house. This enables faster time-to-market for embedded finance solutions.
11) Embedded wealth management services gaining traction in mid-market sector
Mid-market companies are increasingly adopting embedded wealth management solutions to offer investment services directly within their platforms. This trend allows businesses to provide financial advisory tools without building separate wealth management infrastructure.
Embedded wealth management represents a $100 billion market opportunity as companies seek to expand their service offerings. Banking-as-a-Service providers enable this integration by offering pre-built wealth management APIs.
The technology allows mid-market firms to bundle investment options with their core products. E-commerce platforms can now offer retirement planning tools, while healthcare companies integrate investment accounts for medical savings.
Companies benefit from lower customer acquisition costs and expanded revenue streams. The embedded approach removes traditional barriers between financial services and everyday business operations.
Mid-market businesses report improved customer retention when offering integrated wealth management features. These services create stickier relationships by addressing multiple financial needs within a single platform.
The shift reflects growing demand for personalized financial solutions among business customers. Companies no longer need partnerships with traditional wealth management firms to provide investment services.
12) E-commerce platforms in mid-market segment fueling embedded finance use
Mid-market e-commerce businesses are driving significant growth in embedded finance adoption. These companies integrate financial services directly into their platforms to streamline operations and improve customer experiences.
Retail and e-commerce platforms serve as major use cases for embedded finance solutions today. Mid-market firms particularly benefit from these integrations because they can offer competitive financing options without building internal financial infrastructure.
E-commerce businesses implementing embedded finance report measurable improvements across key performance metrics. They see increased customer engagement and more streamlined operations when financial services become part of their core platform experience.
The integration allows mid-market e-commerce companies to offer payment processing, lending, and insurance services within their existing systems. This eliminates the need for customers to navigate to separate financial service providers during transactions.
Payment solutions dominate the embedded finance landscape for e-commerce platforms. However, lending services are gaining traction as mid-market businesses recognize the value of offering financing options during checkout processes.
Mid-market e-commerce platforms benefit from reduced friction in customer transactions. Financial services embedded directly into shopping experiences increase conversion rates and customer satisfaction levels.
13) Healthcare industry mid-market firms embedding financial products
Healthcare mid-market firms are increasingly integrating financial services into their platforms. Mid-market healthcare focused funds have historically outperformed the broader market while evolving their investment approaches.
Consumer demand drives this adoption. A recent survey found 79% of consumers want the ability to pay all types of medical bills through digital health platforms. Another 72% prefer platforms offering financing options.
The embedded finance market is projected to grow from $2.6 trillion in U.S. financial transactions in 2021 to $7 trillion by 2026. Healthcare represents a significant portion of this expansion.
Mid-market healthcare companies benefit from reduced transaction costs and improved patient experiences. These firms can offer payment plans, insurance processing, and billing solutions directly within their existing systems.
Healthcare services companies are shifting focus toward provider services and healthcare IT. This creates more opportunities for embedded financial products in specialized medical software and patient management platforms.
Transaction multiples in mid-market healthcare deals averaged 5.8x in the $10-25 million range during 2024.
14) Projected market growth to $125.95 billion in 2025
The embedded finance market shows strong momentum heading into 2025. Mid-market companies are driving significant adoption as they seek integrated financial solutions.
Market projections indicate substantial expansion across embedded finance sectors. Payment processing, lending, and insurance products embedded within business platforms continue gaining traction.
The technology market growth reflects broader digital transformation trends affecting mid-market firms. Companies increasingly prefer seamless financial services integrated into their existing workflows rather than standalone solutions.
Mid-market businesses benefit from embedded finance through improved cash flow management and streamlined operations. These solutions reduce friction in B2B transactions while providing better customer experiences.
The $125.95 billion projection encompasses various embedded finance products including payment rails, credit facilities, and risk management tools. This growth represents expanding market demand for integrated financial services.
Financial technology adoption accelerates as mid-market companies recognize competitive advantages. Embedded solutions offer better data insights and operational efficiency compared to traditional banking relationships.
The projected market size demonstrates significant opportunity for businesses implementing embedded finance strategies. Companies can capture additional revenue streams while improving core business processes through integrated financial products.
Market Factors Driving Embedded-Finance Growth
The embedded finance market is experiencing rapid expansion driven by three primary forces: businesses accelerating digital transformation efforts, forming strategic technology partnerships, and responding to evolving customer expectations for seamless financial services.
Digital Transformation Initiatives
Mid-market companies are integrating financial services directly into their existing platforms to streamline operations. Digital payment adoption across business segments has become a key driver of this growth.
Companies embed payment processing, lending, and insurance products to eliminate friction in customer transactions. This integration reduces the need for customers to navigate to separate financial platforms.
Benefits of embedded finance integration:
- Faster transaction processing times
- Reduced customer acquisition costs
- Improved data collection and analytics
- Enhanced customer retention rates
Businesses report increased revenue streams when they offer embedded financial products. The integration allows companies to capture transaction fees and commissions previously lost to third-party providers.
Technology infrastructure improvements make these integrations more accessible. Cloud-based APIs enable mid-market firms to implement embedded finance solutions without significant upfront investments.
Strategic Partnerships and Integration
Technology partnerships between financial institutions and non-financial companies drive market expansion. These collaborations allow businesses to offer financial services without obtaining banking licenses or building internal capabilities.
Fintech companies provide the technical infrastructure while established businesses contribute customer relationships and distribution channels. This partnership model reduces implementation time from months to weeks.
Key partnership structures:
- White-label solutions - Financial services branded under the business name
- API integrations - Direct connection to financial service providers
- Revenue-sharing models - Collaborative profit distribution arrangements
Customer Demand Trends
Business customers expect financial services embedded within their primary software platforms. Consumer demand for seamless financial services integrated into digital experiences continues driving market growth.
Modern buyers prefer consolidated experiences rather than managing multiple vendor relationships. Embedded finance eliminates the need to switch between platforms for financial transactions.
Customer preference shifts:
- Single-platform transaction completion
- Real-time payment processing
- Transparent fee structures
- Mobile-optimized experiences
Small and medium enterprises show strong adoption rates for embedded finance products. These businesses often lack dedicated finance teams and benefit from automated financial processes integrated into their operational workflows.
Impact of Embedded-Finance Adoption on Mid-Market Firms
Mid-market companies implementing embedded finance solutions experience measurable improvements in operational speed and revenue generation. These firms gain competitive advantages through streamlined financial processes and new monetization opportunities that position them favorably within their industries.
Operational Efficiencies Realized
Manual processes strain finance departments as mid-market firms scale operations. Companies report automated invoicing and collections scoring 9.4 in importance ratings among growing businesses.
Embedded finance eliminates paper-based workflows that previously required multiple touchpoints. Payment processing times drop from days to minutes when financial services integrate directly into existing business platforms.
Key efficiency gains include:
- Reduced manual data entry by 70-80%
- Faster payment reconciliation cycles
- Automated credit decisions within seconds
- Streamlined accounts receivable management
Revenue Growth and Monetization
Companies embedding financial services into their platforms create new income streams beyond core business operations. Embedded finance providers and banks generate additional revenue through these integrated solutions.
Mid-market firms typically earn 2-5% commission on payment volumes processed through embedded systems. B2B marketplaces report 15-25% increases in transaction values when offering integrated financing options.
Revenue enhancement methods:
- Payment processing fees
- Credit facilitation commissions
- Data analytics services
- Premium financial features
Companies serving other businesses often double their average transaction sizes by offering buy-now-pay-later options at checkout. This approach reduces customer acquisition costs while increasing lifetime value metrics.
Competitive Positioning Within Industry Sectors
Retail and e-commerce sectors show the strongest adoption rates for embedded finance solutions among mid-market companies. These industries leverage integrated payments to differentiate service offerings.
Manufacturing and distribution firms gain competitive edges by offering flexible payment terms directly through order management systems. Customers complete larger purchases when financing options appear seamlessly within procurement workflows.
Industry-specific advantages:
| Sector | Primary Benefit | Impact |
|---|---|---|
| E-commerce | Faster checkout | 15% cart conversion increase |
| Manufacturing | Extended payment terms | 25% larger order values |
| Services | Automated billing | 40% faster payment cycles |
Mid-market companies without embedded finance capabilities lose deals to competitors offering integrated solutions. Buyers increasingly expect financing and payment options within vendor platforms rather than separate applications.
Firms implementing these technologies first in their sectors often capture 10-15% additional market share within 18 months. Early adopters establish customer dependencies that create switching costs for competitors attempting similar integrations.
Frequently Asked Questions
Mid-market firms face specific challenges when implementing embedded finance solutions. These questions address adoption trends, lending transformations, banking industry impacts, integration benefits, research findings, and compliance requirements.
What are the latest trends in embedded finance adoption among mid-market firms?
Mid-market companies are rapidly integrating embedded payment solutions into their existing platforms. This trend allows businesses to offer financial services without building infrastructure from scratch.
The embedded finance market reached $104.8 billion in 2024 and continues expanding. Companies now embed lending, payments, and insurance directly into their software platforms.
Banking-as-a-service platforms drive much of this growth. These solutions let mid-market firms offer financial products to their customers seamlessly.
How is embedded lending transforming the financial landscape for mid-sized businesses?
Embedded lending has become a key service among mid-market companies seeking new revenue streams. Businesses can now offer loans and credit products directly through their platforms.
This transformation reduces friction for end customers who no longer need separate financial applications. Mid-sized firms generate additional income while improving customer retention rates.
The integration eliminates traditional barriers between commerce and finance. Companies can approve credit applications in real-time during checkout processes.
What impact does embedded finance have on the traditional banking industry?
Traditional banks face increased competition as non-financial companies offer banking services. Mid-market firms now provide payments, lending, and other financial products previously exclusive to banks.
Banks are responding by partnering with fintech companies and software platforms. These partnerships allow banks to reach new customers through embedded solutions.
The shift forces banks to rethink their distribution strategies. Many now focus on providing backend infrastructure rather than direct customer relationships.
What benefits do mid-market firms experience when integrating embedded finance solutions?
Mid-market firms generate new revenue streams by offering financial services to their customers. These companies typically earn fees or interest from embedded lending and payment products.
Customer retention improves when businesses provide comprehensive financial solutions. Clients prefer platforms that handle both core services and financial needs in one place.
Integration reduces customer acquisition costs since existing users access new financial products. Companies avoid expensive marketing campaigns to attract separate financial service customers.
How do industry reports from McKinsey and Gartner assess the growth of embedded finance in the mid-market sector?
Industry analysts project significant growth in embedded finance adoption among mid-market firms. The market is expected to reach $375.68 billion by 2030 with a compound annual growth rate of 24.43%.
Research firms highlight the convenience factor driving adoption among businesses. Mid-market companies seek solutions that integrate seamlessly with existing operations.
Analysts emphasize the competitive advantage embedded finance provides. Companies offering these services differentiate themselves from competitors using traditional financial partnerships.
What are the regulatory considerations for mid-market firms implementing embedded finance services?
Mid-market firms must comply with financial regulations when offering embedded services. These companies need proper licensing or must partner with licensed financial institutions.
Data protection requirements become more complex when handling financial information. Businesses must implement security measures that meet banking industry standards.
Compliance costs can be significant for smaller mid-market firms. Many choose to work with established fintech partners rather than obtaining their own licenses.
This post is to be used for informational purposes only and does not constitute formal legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Resolve assumes no liability for actions taken in reliance upon the information contained herein.
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