Embedded finance is a financial product sold inside a business that is not a bank. A loan offered at an online checkout, a business account opened inside accounting software, a card issued by a retailer or insurance added when you book a trip are all examples. The customer deals with the company they already use. A bank, lender or insurer provides the regulated product behind it.

How embedded finance works

Three parties are usually involved. The brand owns the customer relationship and decides where the product appears. A licensed provider, such as a bank, an electronic money institution, a lender or an insurer, holds the money or carries the risk and answers to regulators. Between them sits a technology company that turns the provider’s product into something the brand can switch on through an API.

For accounts and cards, that middle layer is Banking-as-a-Service: the bank licence and systems that let another company offer accounts on a bank’s charter. Our Banking-as-a-Service explainer covers how that part works and what went wrong when it failed at Synapse. Embedded finance is the wider idea, and it also includes lending, payments and insurance.

Common types of embedded finance

Payments came first. Platforms such as marketplaces and ride-hailing apps collect money from customers and pay it out to sellers and drivers, and many now hold balances and offer instant payouts as products in their own right.

Lending is the most visible. Buy now, pay later plans from companies such as Klarna and Affirm appear at the checkout of other retailers. Commerce platforms lend to their own merchants and take repayments as a share of future sales, using sales data they already hold to decide who qualifies. Lenders also embed credit in other industries, such as GoodLeap’s card for homeowners funded through Cross River Bank (our report).

Accounts and cards are the third type. Software companies now offer business accounts inside the tools their customers use every day. More than 2,000 car dealerships on Tekion’s software can open an FDIC-insured account without leaving it, with Core Bank holding the deposits (our report). Insurance can be embedded the same way, as cover offered when buying a phone, a car or a flight. Co-branded cards are an older version of the idea. Apple Card is issued by a bank, and in January 2026 Apple said it would move the card from Goldman Sachs to JPMorgan Chase, with the switch expected to take about two years, the Associated Press reported.

Fintechbits analysis

Why companies offer it

For the brand, a financial product earns revenue from customers it already has, such as interchange on card spending, interest on loans or a commission from an insurer. It can also make customers stay longer, because their money and their business tools sit in the same place. For banks and lenders, embedding is a way to reach customers they would struggle to win directly. Some banks want to keep more of that relationship: FIS launched a platform in September 2026 that lets banks offer accounts inside business software while keeping them on the bank’s own books (our report).

How embedded finance is regulated

There is no separate licence for embedded finance. The regulated provider holds the licence, and supervisors hold it responsible for products sold under other brands. That puts weight on the contracts and controls between the brand, the technology provider and the licensed firm, and supervisors have taken action where those were weak.

Some products are being brought inside the rules for the first time. In the UK, buy now, pay later loans came under the Financial Conduct Authority’s regulation on 15 July 2026. Providers now have to check that customers can afford the repayments, give clear information before the loan and help customers who fall behind, and customers can complain to the Financial Ombudsman Service, according to law firm Wiggin. In the US, the rules depend on the product, so an embedded loan, account or card is covered by the same lending, deposit or card rules as one sold by a bank directly.

Questions about embedded finance

What is the difference between embedded finance and Banking-as-a-Service?

Embedded finance is what the customer sees: a financial product inside a non-financial business. Banking-as-a-Service is one way it is delivered, using a bank’s licence and systems to offer accounts and cards.

Is my money safe in an embedded account?

It depends on where the money is held. In the US, FDIC insurance covers deposits at an insured bank if the bank fails, but not the failure of the software company or a middleman. In the UK and EU, money held by an electronic money institution is safeguarded rather than covered by deposit insurance.

Is buy now, pay later embedded finance?

Yes. A BNPL plan offered at another company’s checkout is one of the most common forms of embedded lending.

Who is responsible if something goes wrong?

The licensed provider is responsible to regulators for the product, even when it carries another company’s brand. The customer usually deals first with the brand they bought from.

Why do non-financial companies want to offer financial products?

They earn extra revenue from customers they already have, such as interest, interchange or commission, and customers tend to stay longer when their money is tied to the service.