A shift is underway in how financial services are distributed, with delivery increasingly taking place within digital platforms alongside traditional banking channels.
As digital ecosystems reshape commerce – from ride-hailing to B2B marketplaces and software-as-a-service – companies hosting economic activity are no longer content to simply pass payments along to financial providers.
Instead, they are embedding financial services directly into their platforms to streamline user journeys and improve operational efficiency. They’re repositioning their business models in the middle of the financial value chain through partnership-led embedded finance models.
Platforms are building on the increasing adoption of embedded finance to reshape how money moves across ecosystems, while supporting improved data visibility and new forms of value creation.
Embedded Finance Moves Into the Mainstream
What is embedded finance? McKinsey defines it as “the placing of a financial product in a nonfinancial customer experience, journey, or platform.” These two words encapsulate what is rapidly becoming a defining feature of the modern financial system.
By 2030, 74% of global digital consumer payments will take place on platforms owned by non-financial institutions. In the same year, the Asia-Pacific region’s embedded finance market is projected to reach US$373.2 billion in transaction value, and embedded finance’s global market value may reach US$7.2 trillion.
These trends reflect a broader evolution in how financial services are distributed and delivered. Non-financial companies are renegotiating how they co-create value with financial institutions, with the balance increasingly tilting in the former’s favour.
Embedded finance-enabled platforms that own the customer relationship and primary interface can distribute financial products directly within the user journey.
In the short term, embedded finance supports customer engagement on the platform while enabling broader ecosystem participation. In the long term, it increases customer loyalty while simultaneously securing a larger share of the profit pool for the platform. This creates shared value, strengthening both platform growth and user outcomes.
APIs: The Engine of Embedded Finance
Embedded finance providers like Bettr share their financing capabilities with third-party platforms through application programming interfaces (APIs): a type of digital connection that allows different systems to communicate and exchange data.
Bettr by Ant International uses APIs to integrate financial services directly into platform ecosystems. They allow different software systems to communicate without needing access to each other’s internal structure. Embedded finance APIs can thus be integrated almost seamlessly directly into existing software environments, sparing platform owners the need to build those capabilities from scratch.
With our APIs in place, these platforms can then offer embedded lending options natively within their service flow. For example, a seller can apply for revenue-based financing directly within an e-commerce platform without leaving the interface.
Once integrated, APIs provide the embedded financial infrastructure that supports compliance, modular service design, and data-driven financial services within the platform environment.
Security and regulatory compliance
Embedded finance providers typically operate through partnerships with regulated financial institutions and licensed infrastructure providers. In these models, licensing, regulatory oversight and core compliance responsibilities remain with regulated partners, allowing platforms to focus on distribution and user experience.
Platforms can integrate embedded finance APIs knowing that core compliance functions – including Know Your Customer (KYC) verification, Anti-Money Laundering (AML) screening, and fraud monitoring – are built into the infrastructure. The embedded financial infrastructure is also designed to meet security standards such as PCI DSS and data-protection requirements such as GDPR.
Modularity
Platforms can select specific financial capabilities – such as offering supply chain finance – and integrate their associated APIs into their existing workflows, allowing financial tools to appear as a natural extension of the platform rather than a separate add-on.
This removes the friction of sending users to external systems, while ensuring financial interactions occur at the moment they are most relevant within the user journey.
Access to data
Embedded finance APIs allow platforms to leverage the real-time behavioral and transactional data generated within their ecosystem. Metrics such as sales velocity or inventory turnover can support more contextual lending decisions and tailored financial offers.
In Bettr’s case, its credit engine uses machine learning models to interpret operational data such as sales flows and transaction activity within the platform environment.
This enables users to complete applications seamlessly within the platform, while lenders can draw on richer operational insights to assess creditworthiness. By leveraging real-time platform data, embedded models can also help extend access to financing for businesses that may previously have been underserved by traditional credit frameworks.
Revenue and Retention: The Embedded Finance Advantage
The ability to embed offerings like lending, payments, BNPL and insurance into their platforms through APIs allows platforms to support new monetisation opportunities across platform ecosystems.
Embedded finance creates commercial value for platforms both directly and indirectly:
Direct: Revenue generation
Platforms earn immediate income on fees or other revenues generated by the embedded financial transactions. Platforms might earn a percentage or flat fee on embedded finance-powered purchases or foreign exchange. Or they might collect a portion of the interchange fees incurred by transactions on their branded cards. In some cases, embedded finance can lead to increased revenue per customer by 2-5x.
Embedded finance also opens the door to new pricing models that bundle finance with their core value proposition. Platforms can package financial tools alongside their core software and charge recurring subscription fees for the combined offering, creating additional revenue while simplifying access for users.
Indirect: Strengthening retention and Customer Lifetime Value (CLV)
Embedding financial services within a platform strengthens customer retention and repeat usage – a crucial advantage, given that acquiring a new customer is up to 25x more expensive than retaining an existing one.
With financial services integrated into the platform, users can manage more of their business in one place, reducing friction and discouraging the search for alternatives. Research suggests that platforms with integrated payments see 2.5x lower attrition rates, as switching costs become prohibitively high for users that manage their sales, payroll, and capital in a single interface.
Bringing Embedded Finance to Your Platform
Integrating embedded finance into a platform requires careful alignment across strategy, infrastructure and compliance. Organisations typically work with infrastructure providers whose capabilities align with their customer needs while maintaining strong security and regulatory standards.
Through partnership with Bettr by Ant International, platforms can deliver embedded finance services without the cost and complexity of building them in-house. The result is a more seamless user experience and greater operational efficiency, with financial tools embedded directly within existing workflows.
As embedded finance adoption accelerates across the platform economy, organisations that integrate it thoughtfully will be better positioned to support growth, efficiency and long-term ecosystem value.
Learn more about embedded finance models or speak with our team to explore relevant use cases. Contact us today.
