You are already using embedded finance. When your Uber ride ends and payment happens silently in the background no card, no checkout, no friction that is it. When Klarna appears at a retailer's checkout offering to split your bill into installments, the same principle is at work.
So, what is embedded finance? Embedded finance is the integration of financial services including payments, lending, insurance, and banking directly into non-financial platforms. Instead of visiting a bank, customers access financial products inside apps, websites, and software they already use.
The finance has come to you, inside software you were already using for something else entirely. This is not just a customer convenience trend. Embedded finance is expanding rapidly as businesses integrate financial products into digital experiences, and the UK has become one of the world's largest fintech markets and a major hub for embedded finance innovation.
What Is Embedded Finance?
Embedded finance is the integration of financial services payments, lending, insurance, or banking directly into non-financial platforms, so users never need to visit a bank to access them. The product comes to the customer, at the moment they need it, inside software they already trust.
That is the one-line definition. The practical reality is a little more layered.
The technology that makes it possible is the Application Programming Interface (API), a connection layer that lets a non-financial platform plug into banking infrastructure without building it from scratch. Behind almost every embedded finance product, there is a three-layer stack running quietly:
- The platform — what the customer actually sees (Shopify, Deliveroo, a SaaS accounting tool)
- The BaaS provider — a Banking-as-a-Service layer that handles compliance, card issuing and connectivity (Griffin, Railsr, Weavr, TrueLayer in the UK)
- The licensed bank — holds the funds and carries the regulatory authorisation (Barclays and NatWest have both expanded into this infrastructure role)
The customer sees only the first layer. The rest is invisible which is precisely the point.
"Embedded finance brings financial services directly to customers within the context of their existing digital experience with a particular brand or digital platform, reducing friction and enhancing end-user convenience." - Eugénie Krijnsen, Global Financial Services Advisory Leader, PwC
Embedded Finance UK Examples by Category
The UK is the third-largest fintech market globally as of 2025, and it has produced some of the clearest embedded finance UK examples across every major category.
Payments remain the most mature segment. Uber's automatic end-of-ride payment is the textbook case: no checkout screen, no card entry, just a receipt.
Klarna operates across thousands of UK retail checkouts; over 100 million consumers globally used its BNPL service in 2025. Apple integrated Klarna into Apple Pay by mid-2025, removing even the need to visit Klarna's own interface.
Embedded lending has expanded beyond consumer BNPL into SME credit. Shopify partners with YouLend to offer funding directly inside merchant dashboards, while Iwoca embeds business loans into accounting software and POS systems. According to McKinsey, embedded-finance lending volumes in Europe have grown three times faster than directly distributed loans over the past decade.
Embedded insurance is one of the UK's strongest embedded finance categories. Zego integrates with Uber and Deliveroo so driver insurance activates only while working. Wrisk embeds insurance into automotive brands including BMW, Mini, Volvo, and Jaguar Land Rover.
Embedded wealth management allows customers to invest without leaving their primary banking app. Nutmeg powers investment services for Chase UK, while Revolut integrates stock and crypto trading directly into its platform.
Embedded Finance vs Banking as a Service
Embedded finance and banking as a service are related but not the same the key difference is visibility.
Embedded finance is what the end customer interacts with: the BNPL option at checkout, the insurance that activates in an app, the loan offer inside accounting software. Banking as a service is the regulated infrastructure that makes those products possible, operating invisibly in the background.
Think of embedded finance vs banking as a service as the finished product versus the factory behind it.
In practice, the two operate together; most embedded finance products rely on a BaaS layer beneath them. Getting a UK banking licence takes 18 months to over two years, which is exactly why BaaS providers that already hold one are strategically valuable. Griffin received its full UK banking licence in March 2024, making it one of the first purpose-built BaaS banks in the country.
The Market and Opportunity
The UK embedded finance market was worth US$23.58 billion in 2024 and is projected to reach US$35.13 billion by 2030, according to ResearchAndMarkets' Q4 2025 Databook. The sector grew at a CAGR of 14.9% between 2021 and 2025.
Growth is supported by widespread open banking adoption, with more than 22 million UK adults already using open banking products. The regulatory environment is also maturing, with the Treasury expected to introduce legislation giving the Financial Conduct Authority (FCA) formal powers over open banking. Globally, embedded finance continues to attract investment and benefit from growing demand for integrated financial products.
How Companies Make Money From Embedded Finance
Companies generate revenue from embedded finance through five primary streams: interchange fees, lending margins, revenue sharing, subscription upgrades, and float income from held balances.
Interchange is typically the largest source, while embedded lending generates returns through interest spreads and insurance partnerships often involve revenue-sharing agreements.
Beyond direct revenue, embedded finance can increase customer lifetime value, improve retention, and reduce customer acquisition costs.
Why Embedded Finance Matters as a Sector
Embedded finance is not just a new revenue stream for fintech companies it represents a shift in how financial services are distributed. Traditional banking built its moat around customer relationships; embedded finance transfers that relationship to the platform.
Shopify becomes your merchant banker, Deliveroo becomes your insurance broker, and Revolut becomes your investment platform.
For the UK startup ecosystem, this creates opportunities for both infrastructure providers and platform businesses. As open banking adoption grows and digital financial products become more common, analysts expect embedded finance to remain one of fintech's fastest-growing sectors.
Conclusion
The question is no longer what is embedded finance, but how quickly it will reshape financial services. By embedding payments, lending, insurance, and investing directly into digital platforms, companies are bringing financial products closer to the point of need. As open banking adoption accelerates and UK fintech infrastructure matures, embedded finance is moving from innovation to expectation.
For more on the technology layer reshaping UK startups, read our Sector Spotlight: London's AI Startup Boom Is Entering a Brutal New Phase.
FAQs
1. What is embedded finance in simple terms?
Embedded finance is when financial services payments, loans, insurance are built into apps and websites you already use for other reasons, so you never have to visit a bank to access them. When payment processes automatically at the end of an Uber ride, or Klarna offers to split a purchase at checkout, that is embedded finance in everyday life.
2. What are examples of embedded finance in the UK?
The clearest embedded finance UK examples include Zego's automatic gig-worker insurance on Deliveroo and Uber; Wrisk's embedded insurance for BMW, Mini, Volvo, and Jaguar Land Rover; iwoca's business loans inside accounting software; YouLend's revenue-based financing inside Shopify; Nutmeg's investment products powering the Chase UK app; and Griffin, the UK-licensed BaaS provider enabling platforms to embed full-stack financial services.
3. How do companies make money from embedded finance?
The main revenue streams are interchange fees on every transaction processed (typically 2.2% - 2.4% on business debit cards), interest margins on embedded loans and BNPL products, revenue sharing or commission from financial institution partners, subscription uplift from premium tiers, and float income on balances held in embedded accounts.
Sources:This article draws on publicly available data and research from the FCA, ResearchAndMarkets, McKinsey, PitchBook, PwC, UK Treasury publications, company announcements, and official corporate websites including Griffin, Zego, Wrisk, YouLend, iwoca, Nutmeg, and Klarna.
