Embedded finance is no longer a force only for consumer-facing products. It’s also thriving in the business-to-business (B2B) realm — reshaping how various platforms (e.g., marketplaces, vertical SaaS, ERP suites) handle payments, manage cashflow, and access credit. Let’s explore where embedded finance stands today in B2B, what business models and economics are emerging, and what founders and sponsor banks must leverage to win in this dynamic space. By understanding the embedded finance landscape in 2025, B2B stakeholders can better position themselves to capture value for the next 5 years. The opportunity is game-changing — but execution, alignment, and partnerships determine winners versus losers.
The Opportunity: B2B Embedded Finance at Scale
To understand why embedded finance is gaining ground in B2B, it’s helpful to quantify the opportunity and surface the key growth drivers and tailwinds.
Market Potential and Growth Projections
Embedded B2B payments opportunity could reach $16T in transaction value by 2030.
Bain’s analysis suggests that embedded B2B payments will hit $2.6T in 2026, generating meaningful revenue (in the near-term) for platforms and enablers.
According to multiple industry sources, embedded finance overall is growing rapidly: Plaid notes that the embedded finance market (across consumer and business) was valued at ~$82.3B in 2023 and is expected to multiply substantially.
Embedded finance is evolving from trend to core growth driver across vertical SaaS, marketplaces, and ERP/Procure-to-Pay platforms.
These numbers underscore a vast addressable space.
Forces Powering Adoption in B2B
Demand for frictionless, integrated workflows
Businesses — most notably small & midsized firms — expect their software products to be seamless. To “exit the platform” for payments, reconciliation, or capital requests should not be an option. Embedded financial services offer a frictionless experience where business activity lives.Working capital constraints & liquidity demands
Delayed payments, long cycles for receivables, and cumbersome supplier relationships challenge traditional B2B. Embedding financing (such as invoice financing, credit at point of transaction) becomes a resource to improve cashflow.ERP and treasury modernization
Businesses want financial operations (payables, receivables, liquidity planning) connected with core management systems. Banks and fintech platforms embedding treasury, accounting, and reconciliation form a bridge between operations and finance.Platform monetization pressure and differentiation
SaaS and marketplace platforms are on the hunt for diversification and monetization beyond subscription or transaction fees. Embedding finance enables new streams (e.g., deposit interest on user balances, interchange on card spend, loan interest) and greater “stickiness” in client relationships.APIs, open banking, and fintech infrastructure maturation
The technical ‘plumbing’ (open banking, APIs, risk scoring, underwriting engines) evolved to a point in which embedding finance is less of a lift and more of a modular orchestration of small parts.
These five forces created an ‘industry moment’ for embedded finance in B2B in 2025. The total size of the embedded B2B market plus accelerating demand for integrated experience and capital — equals early-movers (banks, platforms) will capture monumental value. For the remainder of this discussion, let’s examine how to win, pitfalls, and what lessons founders & banks should note.
Business Models & Economics: How Platforms Monetize Embedded Finance
Integrating financial features is not just about improving UX. It’s about new revenue models. How exactly do platforms and enablers make money? What margin levers are at play?
Commission/Take-Rate Models & Margins
Many mid-market B2B platforms can command 2–5% commission on embedded payment volumes.
In marketplaces, uplift from embedded finance comes as:
Transaction commission / take rate
Platforms may take a slice of each payment (e.g., 0.5%–2%) when managing the payment flow.Financing spread / interest margins
When the platform extends credit (or partners with a provider offering embedded lending), a portion of interest or fee income goes to the platform.Discount capture / dynamic discounting
Platforms may offer early payment discounts to buyers, taking a share of the discount margin.Fee layers for value-added services
Examples include reconciliation, accounting, cash flow analytics, and data insight add-ons.
For B2B embedded ACH (automated clearing house) payments, platforms are expected to capture net revenues of ~$4B from value-added services by 2026 and for embedded card volume, projected platform revenue is estimated at ~$0.8B.
These revenue splits imply that while raw transaction margins may compress, the ancillary services and layers are where much of the long-term value is captured.
Risk Allocation & Capital Models
Two of the biggest design questions in embedded finance: who bears credit / underwriting risk? How is that capital funded?
Platform assumes risk (balance-sheet model)
The platform (or its financial arm) underwrites, funds, and bears default losses. This model allows full margin capture but requires capital, regulatory compliance, reserves, and risk management infrastructure.
Partner / sponsor bank assumes risk (pass-through model)
Many embedded models use a licensed bank or financial institution to underwrite and hold the risk, while the platform acts as a distributor or loan originator. The platform earns referral fees, revenue share, or servicing fees. This model reduces capital burden, but splits margin.Hybrid risk structure
Risk can be shared via co-lending, guarantee mechanisms, first-loss structures, or portfolio purchase agreements. These models align incentives while distributing burden.Fee-for-service (no credit) models
In cases where platforms embed payment switching, settlement, or reconciliation services without offering credit, revenue is generated purely via fees OR subscriptions for financial infrastructure modules.
Embedded finance for U.S. financial institutions highlights that banks must evaluate trade-offs — to become distributors, orchestrators, or principal lenders. Each role has implications for capital, margin, and control.
Customer Segmentation & Yielding
Embedded finance economics depend heavily on the credit quality, ticket size, and repeat activity of business clients:
SMBs are heavy adopters that are more likely to buy embedded financing, but bring higher credit risk.
Mid-market / enterprise buyers have treasury relationships and demand more customization.
Recurring transactions are critical — platforms with frequent purchase flows can better amortize underwriting cost and improve risk models.
Cross-sell potential is highly sought-after —platforms that can deliver multiple financial products (e.g., lending, insurance, embedded banking) will have hockey-stick growth with each client.
Economics in Practice: Benchmarks and Data
B2B marketplaces reported 15%–25% increases in volume growth after embedding financing, likely due to closing more deals or reducing default friction.
Embedded finance allow platforms to capture margins that traditionally went to banks or external fintechs.
Many of these fintech partners advance to the SaaS vendor immediately (fronting cash) while assuming the credit risk, allowing the SaaS vendor to maintain cash flow while offering flexible terms.
The takeaway: margins are real, but only for those who can manage underwriting, default loss, compliance, and operating costs. Embedded finance in B2B introduces multiple monetization levers beyond traditional SaaS or transaction models. Choosing the right mix (e.g. commission, spread) demands key alignment of capital, risk, and strategic positioning.
State of Adoption: Where Embedded Finance Has Gained Traction
Theory and projections are one thing. Actual adoption and use cases show which models are working in today’s B2B landscape.
Embedded Payments & AP/AR Integration
62% of businesses view ERP integration as the most critical factor for AP solutions, underlining the value of embedding payables directly into core workflows.
Platforms and banks are layering discounting, early pay, and reconciliation tools into AP/AR flows, turning accounts payable from cost centers into operational levers.
Embedded Lending & Invoice Financing
Triver, a UK-based fintech, is expanding embedded invoice financing for SMBs. It offers advances on client invoices (with fees from ~1.8% for 30-day invoices) through integration with business software.
Marketplace platforms like Alibaba now embed merchant financing directly into their procurement flows, eliminating friction for merchants to access credit at point-of-sale.
Some vertical SaaS vendors now offer embedded net-term credit (e.g., “Buy Now Pay Later” for B2B), enabling customers to purchase on credit terms instantly.
These lending models begin to replicate trade credit functions previously dominated by legacy financial institutions but now embedded inside digital workflows.
Treasury Services, Discounts & Liquidity Tools
U.S. Bank is embedding payments, dynamic discounting, reconciliation, and automated treasury services within their ERP-integrated platforms.
Kyriba’s “embedded treasury” framework outlines how corporate clients are beginning to demand real-time liquidity management, bank connectivity, and cash optimization within their operational platforms.
Some vendors allow “cash pooling,” multi-entity funds transfers, and virtual accounts as modular features embedded into business systems (especially for enterprises).
Adoption Risk, Switching, and Platform Churn
65% of SMBs say they would switch providers if embedded finance expectations are unmet—a low switching threshold.
Further, SMBs with well-integrated payments can see 25%–50% boosts in revenue depending on sector.
This suggests both the upside of embedding and the danger of complacency for platforms that lag in integration.
Adoption is strongest where the friction is highest —> AP/AR, credit, and treasury. Early-mover platform vendors and banks are pushing into these verticals. While embedded payments are the low-hanging fruit, lending, treasury, and liquidity tools are gaining momentum. The platforms that best tie operations + finance in the customer’s workflow are seeing considerable traction. Those failing to deliver will be left behind.
Key Challenges and Risks
Despite the promise, embedding finance into B2B platforms is not easy. Founders and sponsor banks must navigate regulatory, operational, and alignment risks. Below are the top challenges to anticipate.
Credit Risk and Underwriting Complexity
Unlike consumer credit, underwriting B2B loans is highly complex. Businesses vary in size, seasonal cycles, and industry exposure, which makes predicting risk far more difficult. Platforms that assume credit exposure must invest heavily in credit models, fraud detection, and loss forecasting. Without this discipline, defaults can quickly erode profitability — especially if an entire vertical is exposed to a downturn.
Capital, Liquidity, and Funding
Another hurdle is the funding model. Platforms offering credit must either finance loans on their own balance sheet or secure external capital. Both paths come with trade-offs. Balance-sheet lending maximizes margin capture but ties up capital and exposes the platform to liquidity risk. Partnering with sponsor banks can ease the burden but reduces the platform’s share of revenue. Either way, cost of capital is pivotal in determining whether embedded lending can scale profitably.
Regulatory and Compliance Overhead
Operating at the intersection of finance and technology invites significant regulatory complexity. Embedded finance must comply with lending laws, payments regulations, KYC/AML rules, and data privacy requirements. These obligations multiply when platforms operate across multiple jurisdictions. Sponsor banks often shoulder some of this burden, but platforms must still ensure disclosures, customer protections, and licensing assumptions are watertight to avoid legal or reputational fallout.
Integration Complexity and Legacy Systems
Embedding finance into enterprise workflows is rarely straightforward. Many ERP and procurement systems were not designed to handle modern API-driven services. Platforms that fail to deliver seamless, real-time integration risk frustrating their customers with errors, latency, or reconciliation mismatches. Building a robust technical foundation for exception handling and data consistency is just as important as the financial product itself.
Alignment Between Platform and Bank
Partnerships between platforms and sponsor banks can falter if incentives are not aligned. Disagreements over risk-sharing, revenue splits, or underwriting standards may cause friction and slow down adoption. Without clear governance and shared objectives, what begins as a collaborative effort can quickly turn adversarial, eroding trust on both sides.
Competitive Dynamics and Margin Pressure
As more players enter embedded finance, pricing pressure will rise. Platforms may compete on take-rates and terms, creating a race to the bottom that compresses margins. At the same time, fintech infrastructure providers are making it easier for competitors to offer similar services, increasing commoditization. Banks may also bypass intermediaries by internalizing capabilities, creating new headwinds for platforms.
Customer Trust and Experience
Trust is everything in finance. If an embedded lending product fails to deliver on terms, causes service interruptions, or mishandles sensitive financial data, the platform’s reputation suffers. A poorly executed financial product can undo years of brand equity. This is why transparency, reliability, and customer support must be as carefully designed as the financial features themselves.
Macro and Cyclical Risks
Finally, economic cycles cannot be ignored. During downturns, defaults rise, receivables stretch, and liquidity tightens. Platforms heavily exposed to risky verticals may find themselves absorbing losses they cannot withstand. Sponsor banks, too, must monitor concentration risks and prepare for correlated losses across industries. Stress testing and scenario planning are essential safeguards in an inherently cyclical environment. Embedded finance offers substantial upside, but only those who understand and mitigate the operational, risk, capital, and alignment challenges can scale sustainably. Ignoring these risks invites serious pitfalls.
Strategic Considerations & Best Practices for Founders
Given the opportunity and challenges, what should B2B founders keep in mind as they embed finance in their platforms? Below are strategic lessons derived from current practice and road tests.
Start with the Right Use Case & Incremental Approach
Begin with payments + AP/AR integration before layering lending or treasury. Payments serve as a “foot in the door.”
Pilot with a niche vertical or customer segment to refine underwriting & operations before scaling widely.
Use modular architecture so you can add financial features iteratively.
Partner vs Build: Choose Your Play Carefully
For many early-stage firms, partnering with fintech enablers or banks is more capital-efficient than building full-stack.
Evaluate fintech partners not just on ease of integration but on risk appetite, underwriting competency, and cultural fit.
Make sure to maintain architectural flexibility so you can migrate OR build internally later for improved economics.
Align Incentives & Governance with Sponsor Banks
Design transparent risk-sharing models, profit splits, first-loss frameworks, and exit clauses.
Ensure proper governance structures, data access, and co-control over underwriting rules over time.
Monitor alignment so both parties remain committed & incentivized as volumes scale.
Build Strong Data & Risk Infrastructure Early
Invest in data flows, real-time monitoring, fraud detection, and credit modeling — from the beginning.
If lacking actual data, acquire alternative data (supply chain data, ERP/transaction flows) to feed credit models.
Design control frameworks, stress testing, and loss reserves in early stages of program launch.
Prioritize UX, Seamlessness & Trust
The embedded finance experience must feel natural. Fast approvals, low friction, real-time visibility — all in-platform.
Display clear terms, risk disclosures, and account statements for transparency.
Provide reconciliation, exception handling, and self-service tools to reduce manual burden.
Leverage Cross-Sell and Multi-Product Bundles
With embedded payment/credit live, upsell new products (treasury, cash management, insurance, supply chain finance).
Bundling multiple products yields more revenue per user AND raises switching costs (of customers leaving).
Monitor Credit Cycles & Capital Efficiency
Maintain guardrails on concentration, vertical exposure, and stress scenario provisions.
Use dynamic pricing or risk-based pricing to adapt to portfolio performance.
Optimize capital deployment so spread exceeds cost of capital, after all risk provisioning.
Be Mindful of Regulation and Compliance as You Scale
Start simple, but plan for regulatory layering across credit, payments, data privacy, and cross-border operations.
Monitor evolving legislation — especially in regions with stricter fintech oversight.
Engage compliance expertise early to avoid retroactive compliance “taxes.”
For founders, winning in embedded finance means combining product discipline, capital efficiency, alignment, and risk engineering. The winners will be those who strike the balance between ambitious monetization and resilient operations.
Strategic Considerations & Best Practices for Sponsor Banks
Embedded finance is not just the domain of fintechs and platforms. Sponsor banks and incumbent financial institutions have a pivotal role. Here’s what banks must internalize to succeed as partners or principal providers.
Defining Your Role & Business Model Posture
Banks must decide whether to act as product providers, principals, OR distribution partners.
Product provider: banks directly supply financial products (credit, payment rails) while B2B platforms distribute.
Principal: bank owns entire stack including customer interface, risk management, and technology enablement.
Distribution partner: bank shares revenue, outsources servicing and other components, and/or allows for white-labeling.
Choose the role that best aligns with capital, technology, and strategic vision.
Investing in Modular, API-First Infrastructure
Legacy banking stacks often resist embedding — to partner effectively, banks must modernize via APIs, microservices, and composable architectures.
The acquisition of fintech infrastructure providers (e.g., FIS acquiring Amount) signals this imperative.
Banks must offer developer-friendly APIs, sandbox environments, SLAs, and robust scaling support for partners.
Risk Management, Capital, and Compliance Readiness
Assess the capital and reserve implications of underwriting embedded credit.
Governance, models, audits, and regulatory oversight must be designed for third-party embedded flows.
Use shared risk models, first-loss frameworks, or portfolio partnerships to align exposures with platforms.
Partnering, Not Overpowering
Banks must be flexible collaborators, not domineering partners. Platforms require as much control over UX, data, and risk rules as possible.
Respecting the platform’s brand and ownership of customer relationships is key for long-term trust.
Offer customizable product tiers (e.g., white label, co-branded, or direct) to suit platform maturity.
Monetization & Margin Sharing
Banks can monetize via interest spread, interchange, servicing fees, guarantee fees, or even data services.
As margins compress, capturing ancillary value (e.g., analytics, treasury, risk services) becomes more salient than pure credit yields.
Competitive Threat & Defense Strategy
If banks delay, fintechs and platforms may internalize more of the stack, bypassing the bank.
To avoid disintermediation, banks should proactively partner, invest in technology, and own at least part of the embedded path.
Banks with legacy strength in capital, regulation, and trust have enduring advantages—but only if they evolve.
Building a Scalable Ecosystem & Go-To-Market Strategy
Banks can offer a marketplace of embedded fintech partners to platforms (a “platform of platforms”).
Joint go-to-market incentives, risk-sharing structures, and “plug & play” partner models accelerate adoption.
Banks should co-invest in onboarding, integration, and product development with platform clients.
Sponsor banks that understand how to play in the embedded finance ecosystem — not as gatekeepers but as enablers — are better positioned to grow.
Emerging Trends & Future Directions (Next 1–3 Years)
Beyond today’s use cases, several nascent trends are shaping where embedded finance in B2B may evolve next. Founders and banks should watch these closely.
AI-Driven Underwriting & Risk Orchestration
Generative AI and machine learning enable real-time risk scoring, autonomous decisions, early-warning risk detection, and fraud prevention.
Payments firms face a tension between optimization and human oversight — embedded finance must balance automation with trust.
Embedding AI into underwriting stacks will reduce cost per decision and expand caps on small-ticket B2B credit.
Composability, Modular Financial Primitives & Embedded Treasury
Instead of monolithic offerings, future platforms will compose smaller financial primitives (e.g., virtual accounts, liquidity APIs, dynamic discounting) into custom bundles.
“Embedded treasury” (cash, liquidity, forex, pooling) will increasingly be offered natively to larger B2B firms.
Platforms will become marketplaces of financial modules from multiple providers.
Cross-Border Embedded Finance & Trade Finance
Embedded trade credit, foreign exchange, cross-border settlement, and supply chain finance will become critical for platforms operating globally.
Banks and fintechs are racing to support seamless cross-border embedded flows with dynamic FX, customs, and trade risk modules.
ESG, Sustainability & Embedded ESG Financing
Platforms may embed ESG-linked credit or incentives (e.g., lower rates for sustainable suppliers, green credits).
Sustainable supply chain finance or carbon offset financing may become embedded in procurement platforms.
ESG compliance and reporting will feed into embedded finance product design.
Deeper Analytics, Predictive Insights & Cash Flow Capture
As embedded finance modules mature, platforms will leverage embedded transaction data to build predictive models, cash flow forecasting, and working capital tools for users.
These insights can be monetized or used to upsell infrastructure services.
Decentralization & Digital Assets
Over time, blockchain or tokenization could enable new embedded settlement rails, digital assets, or stablecoin-based liquidity inside B2B workflows.
Although nascent, some platforms may experiment with programmable money or smart-contract-anchored trade finance modules.
The future of embedded finance in B2B is not limited to payments and lending. Over time, embedded cash, treasury, cross-border trade, AI-driven underwriting, and intelligent analytics will converge to create fully integrated financial operating systems within business platforms. Those who anticipate and build for this layered future will gain durable advantage.
Key Learnings: Summary & Strategic Checklist
To wrap up, here is a concise summary of key insights and a practical checklist that B2B founders and sponsor banks can use to assess readiness and opportunity.
STRATEGIC READINESS CHECKLIST
Use case selection – Identify the right entry point, starting with payments or AR flows before expanding into lending or treasury.
Partner vs. build decision – Evaluate whether your platform has the capital, technology, and regulatory capacity to build in-house or whether it is more efficient to partner.
Risk-sharing design – Define how risk, revenue, and governance are split between platform and sponsor bank, including loss provisions and exit clauses.
Infrastructure and data – Ensure robust data ingestion, real-time monitoring, fraud detection, and reconciliation systems are in place.
User experience and integration – Deliver a seamless, native financial experience with minimal latency and strong reconciliation capabilities.
Compliance and licensing – Anticipate regulatory obligations in each geography and develop a compliance roadmap early.
Pilot and scale strategy – Start with a small vertical or customer segment, measure performance, and expand gradually.
Capital and funding readiness – Secure funding sources or credit lines to support embedded lending without straining liquidity.
Monitoring and guardrails – Implement dashboards, stress tests, and risk frameworks to manage concentration and cyclical risks.
Exit and flexibility – Maintain modular architecture and open APIs that allow migration or pivoting as economics evolve.
Embedded finance in B2B is not a fad—it is rapidly becoming a foundational dimension of how software, marketplaces, and operations systems monetize and differentiate. For founders, the time to act is now: pick the right use cases, partner wisely, build resilience, and scale deliberately. For banks, the imperative is clear: evolve from being bypassed to being embedded. Success will go to those who can weave finance into operations in a trustful, capital-efficient, and seamless way.
