Embedded finance
Embedded finance is the delivery of financial services, such as accounts, payments, cards or lending, inside a non-financial company's own product, so its users get them without leaving the platform. The platform owns the customer experience. A licensed institution, usually a bank or e-money institution, provides the regulated service behind it.
Examples of embedded finance
| Service | Example |
|---|---|
| Embedded accounts | A marketplace gives each seller an account with its own IBAN, so payouts land inside the platform |
| Embedded wallets | Digital wallets inside a marketplace, gaming or mobility app hold balances that users spend or withdraw |
| Embedded payments | Accounting software lets users pay supplier invoices without logging in to a separate provider |
| Embedded cards | Expense or travel software issues company cards that its customers manage in the app |
| Embedded lending | A checkout offers buy now, pay later, or an e-commerce platform offers merchants working capital based on their sales |
| Embedded insurance | Cover is offered at the point of sale, such as shipping or travel insurance |
| Embedded investing | Investment services or wealth management offered inside a payroll, banking or savings app |
Who does what
Embedded finance splits the work between the brand the user sees and the regulated firm behind it, usually an e-money institution or a bank.| Layer | Role |
|---|---|
| Platform | Owns the user relationship, the interface and distribution; earns fees or a revenue share |
| Licensed provider | Holds the licence, issues the accounts or cards, holds client funds under safeguarding, runs AML checks on end users and answers to its supervisor |
| Technology layer | APIs that connect the two, often supplied by the licensed provider itself |
How embedded finance works
- Partnership: the platform signs an agreement with a licensed provider, such as an e-money institution, and agrees which services, countries and customer types are covered.
- Integration: the platform connects to the provider's APIs, or takes a ready-made white label interface, and builds the financial features into its product.
- Onboarding: each end user goes through KYC or KYB checks. The licensed provider is responsible for them, even when the platform collects the data in its own sign-up flow.
- Accounts and money movement: the provider issues accounts, IBANs or cards and processes payments. Client funds are held by the licensed provider and safeguarded, not kept on the platform's balance sheet.
- Ongoing operations: the provider runs transaction monitoring, sanctions screening and regulatory reporting, while the platform handles first-line customer support.
Embedded finance vs banking as a service
The two terms describe the same arrangement from opposite ends. Embedded finance is what the end user sees: financial features inside a product that isn't a financial company. Banking as a service is the supply side: a licensed provider exposing accounts, payments and cards through APIs so other companies can build them in. Most embedded finance runs on banking as a service.Embedded finance vs embedded banking
Embedded banking is the part of embedded finance that covers banking services: bank accounts or e-money accounts, IBANs, payments and cards. Embedded finance is wider. It also includes embedded lending, insurance, investment services and other embedded financial products that digital platforms offer to their users.In practice, embedded bank accounts and payments are usually the starting point. Once money flows through the platform, it has the financial data to add lending or other financial tools later.Why the embedded finance market is growing
Three changes made it practical for non-financial platforms to integrate financial services:- API-based infrastructure: embedded finance providers expose accounts, payments and cards through APIs, so a platform can launch in weeks rather than building its own regulated business.
- Open banking and PSD2: EU rules opened access to payment accounts and created a market of licensed financial service providers that aren't traditional banks.
- Vertical software: SaaS platforms built for one industry already hold their customers' workflows and financial data, which makes payments and accounts a natural next step.
Benefits of embedded finance
For end users, the main gain is convenience: they get paid, pay suppliers or access financing inside software they already use, without opening a separate account or reconciling data between systems.For platforms, embedded financial services can:- add new revenue streams from payments, cards and accounts
- keep customers on the platform for longer, because moving money becomes part of the product
- speed up payouts and collections, which matters for marketplaces and gig platforms
- give better data on customer activity, which helps with underwriting and product decisions
How platforms earn from embedded finance
Revenue models depend on the service and the partner contract. Common ones are:- Card interchange share: a share of the fee merchants pay when the platform's cards are used.
- Payment and FX fees: per-transaction fees on payouts, transfers and currency conversion.
- Account fees: monthly subscriptions or per-account charges for premium features.
- Lending and insurance: origination fees, revenue share or commissions from partner lenders and insurers.
Risks and challenges
Embedded finance moves regulated activity into non-financial products, which brings its own risks:- Partner dependency: the platform relies on one licensed provider for accounts and payments, and switching later is slow.
- Reconciliation and partner failure: when ledgers are split between the platform, a middleware layer and the licensed institution, client funds can be hard to trace. The 2024 bankruptcy of US middleware provider Synapse left end users of several fintech apps without access to their money for months.
- Compliance gaps: weak onboarding or monitoring in the platform's flow becomes the licensed provider's problem, and can lead to account closures for the platform's users.
- Fraud: new payment features attract fraud, so platforms need controls such as Verification of Payee and limits on new accounts.
What platforms should check in a partner
- whose name the IBAN is issued in, the end user's or a pooled account, which affects Verification of Payee results
- who carries out know your business checks on end users, and how much the platform has to collect
- how client funds are safeguarded and what happens if either party fails
- which countries the licence is passported to, and which currencies and payment schemes are covered
- who handles complaints, incidents and fraud cases, and how liability is split in the contract
Embedded finance at Narvi
Narvi offers two ways to embed financial services, both run under its e-money institution licence from the Finnish Financial Supervisory Authority, passported across the EEA. Banking as a Service is for platforms that want to build accounts and payments into their own product through an API. White label banking is for companies that want a branded banking portal for their customers without building one.| Banking as a Service | White label banking | |
|---|---|---|
| What you get | API access to accounts, payments and onboarding, built into your own interface | A ready-made online banking portal with your logo, colours and fonts |
| Who builds the interface | Your developers | Narvi, configured with your brand assets |
| Accounts | Dedicated IBANs created by API for each end user, with several per entity where funds must be kept apart | Dedicated IBANs in each customer's own name, plus multi-user access with roles for directors, accountants and staff |
| Payments | SEPA, SEPA Instant and SWIFT to 100+ countries in 75+ currencies; inbound in EUR, USD and GBP | SEPA, SEPA Instant and SWIFT to 100+ countries |
| Integration | REST API with Node.js and Python libraries and real-time webhooks; public documentation | No-code setup; Narvi runs hosting, security updates and new releases |
| Fits | Fintechs, marketplaces, PSPs, SaaS platforms, crypto companies | Crypto exchanges and OTC desks, iGaming operators, accounting and legal firms, startup accelerators |
FAQ
The financial services in it are. The licensed provider is supervised; the platform is regulated only to the extent its role requires, for example as a registered agent or distributor.
Not usually, if a licensed partner provides the service and the platform never holds client funds. It depends on the exact role, so get legal advice.
No. Open banking lets third parties read account data or start payments from accounts held elsewhere, with the customer's consent. Embedded finance can use it, but often provides the accounts themselves.
Banking as a service gives a platform APIs to build financial features into its own interface. White label banking gives it a finished banking portal under its own brand. The licensed provider behind both is the same; the difference is who builds and runs the interface.
Marketplaces giving sellers their own IBANs for payouts, accounting software that pays supplier invoices, expense platforms issuing company cards, and e-commerce platforms offering merchants financing based on their sales.
Marketplaces, SaaS and accounting platforms, gig economy apps, payment service providers, crypto companies and other digital businesses that want to offer accounts or payments to their own customers.
Related terms and sources
Payment service provider (PSP) · E-money institution (EMI) · Verification of Payee · Know your business (KYB) · Ultimate beneficial owner · Browse the full glossary
Last reviewed October 30, 2026Disclaimer
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
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