Financial services are undergoing a true transformation, and at the heart of this shift lies embedded finance, a concept that should go beyond the capabilities of open banking in order to redefine how businesses and consumers interact with business financial services.

While open banking has focused on making financial data more accessible and transparent to all users, embedded finance takes the next logical step by integrating financial services directly into existing business models we use every day.

This integration is so seamless that consumers often don’t even realize they are engaging with financial products. Non-bank financial institutions (NBFIs) are at the forefront of this revolution, leveraging their agility and technological innovation to become faster than any of the traditional banks.

In practical terms, this article explains what is embedded finance, what are NBFIs in payments, why is embedded finance growing in Europe, how do NBFIs support business payments, what is a business payment account, what is a corporate IBAN account, how do embedded finance providers work, and why are businesses choosing non-bank payment providers.

Open banking, primarily driven by regulatory initiatives like PSD2 in Europe and the Open Banking Regulatory Framework in the UK, which is one of the most advanced globally, over the last ca. 10 years, has laid the groundwork for account information and financial data sharing. It supposedly has empowered users by giving them greater control over their financial information and partially enabled the development of innovative financial products.

However, since open banking is largely about accessibility and transparency, it was more of a pilot program for the financial industry. Embedded finance is what actually lies in front of us on the other hand, and it is about integration and user experience. It takes the principles of open banking and applies them in a way that makes financial services an intrinsic part of non-financial platforms.

For example, while open banking allows a consumer to view all their bank accounts in a single app, embedded finance enables that same consumer to secure a loan directly within an e-commerce platform without ever leaving the webshop. This level of integration is what sets embedded finance apart and makes it a gamechanger in the financial services industry.

This is why embedded finance Europe and embedded finance EU are increasingly important concepts for companies trying to understand the next stage of payments, accounts, lending and financial services for business.

Non-bank financial institutions (NBFIs) are leading the charge in embedded finance due to their ability to move quickly and innovate without the constraints of old legacy architecture and “we-have-always-done-it-this-way” mindset, that often pulls back the traditional banks.

NBFIs can deploy new financial services in matter of weeks, thanks to their agile working environment, cloud-native architectures and API-native IT approaches. This speed allows them to respond rapidly to market demands and offer hyper-personalized financial products tailored to real-time user behaviour.

In payments, this is also where NBFI payments and non-bank financial institutions payments become important. NBFIs are often better positioned to build flexible business payment services, corporate payment solutions, B2B payment services, and a digital payment solution for business because they are not tied to the same legacy infrastructure as many traditional banks.

One of the most compelling advantages of NBFIs is its customer centricity. By leveraging real-time data and advanced analytics, NBFIs can create financial products that are precisely tailored to the needs and behaviours of individual users. This level of personalization is difficult for traditional banks to achieve, given their reliance on outdated infrastructure, rigidness and more generalized risk models.

While open banking has always been associated with consumer-facing applications, embedded finance is also making significant movements in the B2B segments. By the end of 2026, it is expected that a substantial majority of non-financial platforms will offer microlending, alternative investment, insurance and other financial services.

This trend is particularly beneficial for SMEs that can now access financial products tailored to their specific needs without needing to go through the whole usual banking processes. Platforms like Shopify have already demonstrated the power of embedded finance in the B2B space. For instance, Shopify Capital allows merchants to borrow against their future sales even without undergoing a traditional credit check. The platform uses cash flow data analysis to determine eligibility and offer tailored loans, and tailored pricing naturally. This not only simplifies the borrowing process but also provides merchants with additional flexibility they may need to grow their businesses.

In the UK, Amazon’s partnership with TrueLayer is another excellent example of embedded finance in action. This collaboration enables users to pay via bank account transfer, or A2A payment, at the checkout, eliminating the need for card details and associated fees. The process is streamlined and secure, requiring only biometric authentication to complete the transaction.

For business users, the same logic can be applied to a business payment account, business IBAN, or corporate IBAN account. A platform that can offer account access, payments, transfers, payouts or lending inside its own product becomes more than a software platform. It becomes a practical financial layer for the business.

A typical embedded finance setup for business may include:

1. A business payment account for receiving, holding and sending funds.
2. A corporate IBAN account for domestic or cross-border transfers.
3. Embedded lending based on sales or cash flow data.
4. Automated invoice payments and supplier payouts.
5. Real-time payment tracking, fees and account visibility.

Generally speaking, embedded finance may bring a load of benefits for the whole industry. Businesses that adopt embedded finance solutions may see a significant increase in customer retention, often in the range of 20-30%. Cost saving is another major benefit of embedded finance, particularly for NBFIs, but by leveraging cloud-native technologies, NBFIs may reduce their operational costs by 10-20%, and such savings should be passed onto consumers in the form of lower fees and more competitive financial products. Also, not to forget, the overall efficiency gains from having automated processes and real-time data analytics should contribute to more streamlined and cost-effective business operations.

Lastly, platforms that offer embedded lending report a 5-15% higher revenue per user compared to those that do not, mainly driven by the ability to offer tailored financial products that meet the specific needs of users, thereby increasing overall user engagement and subsequently the transaction volumes. The integration of financial services into non-financial platforms also opens up new monetization opportunities, further boosting revenue potential.

Regulatory frameworks like PSD3 and the Financial Data Access ( FiDA) framework are actually what will enable the scale of the embedded finance going forward. These regulations build on the foundations laid by PSD2, introduce stronger fraud protections, standardized APIs, and innovative payment solutions like Variable Recurring Payments, or VRPs, or the Dynamic Recurring Payments, DRP, as presented by the European Payments Council, EPC, developed the SPAA scheme to define commercial standards for VRPs in the EU, which allow for automatic payments, such as utility bills, making the financial everyday of a consumer more convenient and efficient.

FiDA extends the principles of open banking to a broader range of financial products, including investments, pensions, and insurance, and such expansion turns every platform into a potential financial hub, capable of offering a wider range of financial services. However, the EU’s debate over excluding non-EU big tech companies from FiDA could either stifle innovation or protect European digital sovereignty, but that is another topic.

Despite all the aforementioned advantages, NBFIs face a significant challenge in building trust with consumers. Traditional banks have long-standing reputations for stability and security, and to address this, NBFIs are implementing robust security measures such as biometric authentication and encrypted APIs, but also forming strategic partnerships with banks mainly to add credibility to their operations.

Transparency should be seen as another critical factor in building consumer trust. NBFIs are focusing on providing real-time tracking of loans, payments, and fees, ensuring that users have a clear and comprehensive view of their financial interactions, which builds trust, but even more importantly enhances the user experience by providing greater control and understanding.

For businesses, this trust issue is equally important. Companies need to know that their payments, accounts, IBANs, fees and transaction data are visible, stable and easy to manage. This is one of the reasons why businesses are choosing embedded payment services and non-bank payment providers, especially when they need faster onboarding, clearer interfaces and payment tools that are built into the platforms they already use.

Looking ahead, banks and NBFIs are set to become utility providers, similar to the electricity providers. By 2030, they will power a wide range of applications, from travel and freelancing to gaming and beyond.

In the travel industry, for example, booking a flight could automatically include travel insurance without the need for additional forms or steps. For freelancers, platforms could offer invoicing, tax preparation, and instant payouts all within a single app, streamlining financial management and reducing administration. In the gaming industry, embedded finance could allow players to purchase in-game items with micro-loans that are repaid through future earnings. Such level of integration would enhance the user experience and open up new revenue streams for both platforms and financial service providers.

In conclusion, embedded finance represents the next evolution in financial services, building on the foundations laid by open banking to create a more integrated, seamless, and user-centric financial ecosystem.

The benefits are clear, including increased customer retention, cost savings, and revenue growth for businesses, and greater convenience and personalization for consumers. For companies, embedded finance also opens the door to more flexible financial services for business, including business payment services, B2B payment services, corporate payment solutions, business payment accounts and corporate IBAN accounts.

The future of finance is embedded, and those who embrace this revolution today will lead the financial services innovation of tomorrow.

Embedded finance is the integration of financial services directly into non-financial platforms, apps or business models. Instead of sending the user to a separate bank, lender or payment provider, the financial product appears inside the platform where the user already acts, buys, sells, works or manages money.

Embedded finance is growing in the EU because open banking, regulation, APIs and cloud-native technology have created a practical foundation for more integrated financial services. Businesses and consumers now expect payments, lending, accounts and insurance to appear directly inside the platforms they already use.

NBFIs in the payments industry are non-bank financial institutions that provide financial services without operating as traditional banks. In payments, they can support accounts, transfers, cards, APIs, merchant payments, payouts and other payment-related services for consumers, platforms and businesses.

NBFIs often differ from traditional financial institutions in speed, structure and technology. Traditional banks may depend on older infrastructure and generalized risk models. NBFIs are often more agile, cloud-native and API-native, which allows them to launch and adapt payment services faster.

Businesses are choosing embedded payment services because they reduce friction. Instead of managing separate tools for accounts, payments, payouts and reporting, companies can use financial services inside the platforms where they already work. This can improve speed, visibility and daily financial management.

A business payment account is an account designed for receiving, holding and sending money in a business context. It can support customer receipts, supplier payments, operational expenses, payouts, account visibility and reconciliation, especially when integrated into a wider business platform.

Business IBANs can support cross-border payments by giving companies account details for receiving and sending transfers across markets. For businesses operating internationally, IBAN-based payment access can make supplier payments, customer receipts and account management more structured and easier to track.

NBFIs are likely to play a major role in the future of European payments because they can build faster, more flexible and more integrated financial services. As embedded finance develops, NBFIs can help platforms offer accounts, payments, lending and payouts directly inside everyday digital services.