Dr Ozan Özerk, Founder, OpenPayd
Good illusions take you on a journey, so let me do the same. Imagine it’s 2026. You need to go to the supermarket, so you rent a car. You unlock the car with an app on your phone, drive to the supermarket and start shopping. The app instantly charges you for the trip, direct from your bank account.
At the supermarket, you choose your eggs, milk and bread. Then you walk out. No more check-out line to stand in or scanning every item in your basket. The final bill for everything you took and is automatically deducted from your account with the supermarket, without you having to lift a finger.
It’s a nice day, so you decide to walk home and get a coffee on the way. You pop into your local coffee shop and are told by the staff that they will round up your loose change on every order and invest it in green businesses on your behalf. With a few clicks of the coffee shop’s app, your new investment portfolio is up and running in seconds.
So, what’s going on? Where are the banks, credit card companies and wealth managers? Where have all the financial services providers gone?
Well, as with all real illusionists who make objects disappear, they’re never really gone, they’re just not where you expect them to be. This is Embedded Finance – taking financial services like payments, loans or investments and integrating them into everyday products and services.
The examples I’ve given above are still in their infancy, they just aren’t widespread yet. But make no mistake, Embedded Finance is already here. Even businesses which have no background in providing financial services are incorporating them into their offering, improving the products and services they provide.
There are two reasons this has been made possible. The first is regulation. In the UK, banks have to grant access to customer data to third party providers and allow them to make payments directly from a customer’s bank account, should the customer want them to. Non-financial companies have been quick to jump on this to build simpler, more intuitive customer journeys. Ride hailing apps such as Uber have set the standard – automatically deducting its fee from your bank account as soon as you get out of the car, doing away with the need to enter your card details for each trip or even confirm payment.
The second reason is the continuing move towards digital finance instead of cash. We are all accustomed to paying for our goods and services electronically. Many of us also have no reason to go into a bank because we can do most transactions online. In China, where super apps such as WeChat and Alipay dominate the market, cash has almost disappeared.
Those two factors alone have unlocked a host of benefits for businesses: increased sales, better customer relationships, lower operational costs and even the opportunity to build new business lines.
Now, Embedded Finance is going mainstream. OpenPayd recently commissioned the largest ever independent study into Embedded Finance. We found that 92 percent of business leaders plan to launch some form of Embedded Finance within the next five years and 73 percent within the next two years.
These businesses are looking around them, seeing the successes of Embedded Finance and applying them to their own operations.
If you want to understand what those first movers in Embedded Finance look like, you don’t have to look far. From shopping online to buying your next car, financial services are being embedded in everyday products in surprising ways.
Embedded Banking – Shopify: Shopify has allowed small businesses to accept payments for a long time. Last year, it took this to a new level. The ecommerce company noticed that merchants were using their personal bank accounts to receive payments, which makes it harder for a small business to track income and expenses. Through Embedded Banking, it launched Shopify Balance, a bank account within Shopify to help its merchants track their expenses and manage cash flow in one place.
Embedded Insurance – Tesla: In California, customers can take out car insurance through Tesla when they buy a car. Tesla hasn’t hired an entire insurance team and become a financially-regulated insurer; it has simply plugged these services in using a third-party. This means it will receive huge amounts of data on its cars and the causes of common problems. In turn, its customers will receive instant insurance at an affordable rate. So it’s a win-win.
Embedded Lending – Klarna: An increasingly common option when shopping online is to buy-now-pay-later, with Swedish payments company Klarna popularising the method. This is hugely popular with consumers and helps retailers tackle the problem of checkout carts being abandoned (which is, on average, about 73 percent of items). Klarna has made Embedded Lending easy to integrate, so on many e-commerce sites it will appear as if this payment option is coming directly from the brand you’re shopping with.
Embedded Finance will be worth $7.2 trillion by 2030, according to Simon Torrance. As increasingly more businesses embed financial offerings into products and services, the way in which we access, invest, save, send and spend money will completely change.
As a result, we’ll be better insured and be able to make smarter investments, buy what we want in a matter of seconds and pay for it on our own terms. Financial services will have become so common, accessible and easy-to-use, eventually it will feel like they aren’t there at all.
Great illusions challenge what we believe is possible. Embedded Finance is doing just the same. It’s challenging decades of received wisdom about how and where we should use financial services. And it allows us to build a world where financial services will eventually become invisible in our daily lives.
Dr. Ozan Özerk is the Founder of OpenPayd.