The embedded finance market — financial services built into non-financial apps and platforms — has reached $138 billion in annual transaction volume, growing 48% year-over-year.
The largest categories are embedded payments (58% of volume), embedded lending (22%), embedded insurance (12%), and embedded investment (8%). Companies like Shopify, Uber, and Amazon offer financial services that rival traditional banks.
For consumers, the shift is largely invisible. When they buy now and pay later on Shopify, take a loan through Uber, or save money through a fintech app embedded in their employer's payroll system, they are using embedded finance.
Traditional banks are responding by offering banking-as-a-service (BaaS) platforms that power these embedded products. The irony: banks are now infrastructure providers for the very companies that are disintermediating them.