Embedded payments are expected to reach $7 trillion in global transaction value by 2026, reshaping the financial sector. (PR Newswire)
This article explores essential statistics and events related to embedded payments.
We examine how payment services are seamlessly integrated into non-financial platforms, the growing role of fintech partnerships, and how these changes impact consumer behavior.
These driving forces are revolutionizing the way businesses and consumers interact with financial services, making payments more convenient, personalized, and efficient than ever before.
The embedded finance market is set to reach $588.49B by 2030 (32.8% CAGR). Embedded payments will hit $7T by 2026, with B2B payments reaching $2.6T and $6.7B in revenue.
This article combines open-access resources and proprietary data to present accurate, up-to-date statistics and shifts on embedded payment.
Our methodology involves:
Key data providers include:
While we strive for accuracy, occurences in embedded payment are shifting rapidly.
These statistics reflect current patterns and should not be considered permanent facts.
Embedded payments emerged in the early 2010s, driven by the rise of e-commerce and mobile applications.
It refers to the integration of payment processing directly into non-financial platforms, allowing users to complete transactions without leaving the application.
Since its inception, embedded payments have grown remarkably, with key milestones such as the introduction of one-click checkout systems marking major developments.
Today, the embedded payments market is characterized by a seamless user experience and increasing adoption across various industries.
Major players include companies like PayPal, Stripe, and Square, and consumer demand for convenience and speed continues to shape the industry's trajectory.
The embedded payments segment is estimated to have the largest market size within the embedded finance market, valued at $83.32 billion in 2023. (Grand View Research)
This growth highlights the crucial role embedded payments play in the digital economy, making it a key area of focus for businesses and financial institutions.
Embedded payments are becoming increasingly popular as businesses and consumers seek more seamless, integrated payment experiences.
These trends are transforming how payments are made across industries, from e-commerce to mobility services, driving the growth and evolution of embedded payments:
Digital wallets are on the rise, with the global market projected to grow by 60% to $12 trillion by 2026. (Juniper Research)
Consumers increasingly prefer wallets like Apple Pay and Google Pay for their seamless and secure payments across apps and platforms.
This is meaningful because it reduces friction in transactions, making checkout quicker and more convenient.
For example, Starbucks attributes over 30% of its U.S. sales to embedded digital wallet payments. (Geek Wire)
Non-financial apps, from ride-sharing to e-commerce, are integrating embedded payments, and this sector is expected to reach $588.49 billion by 2030. (Grand View Research)
The convenience of paying directly within the app—such as Uber's automatic fare payment—enhances user experience, creating a more streamlined financial ecosystem.
This is remarkable as it opens new revenue streams for non-financial companies while making transactions more efficient for consumers.
Embedded business-to-business (B2B) payments are also experiencing major growth, with projections indicating they will reach $2.6 trillion by 2026. (Bain)
This underscores the value embedded payments bring to the B2B space, enabling more efficient and streamlined business transactions.
As companies seek to optimize their financial processes and reduce friction, embedded B2B payments offer a compelling solution.
The $6.7 billion in revenue that embedded B2B payments are expected to generate for platforms and enablers by 2026 further emphasizes the commercial potential of this course. (Bain)
Subscription-based services are booming, with the global market expected to hit $1.5 trillion by 2025. (Forbes)
Platforms like Netflix, Spotify, and Adobe lead this shift by embedding recurring payments directly into their ecosystems.
This is vital because it encourages customer loyalty while automating revenue streams.
Over 60% of U.S. households now use multiple subscription services, driven by the ease of embedded payments. (Forbes)
The embedded payment industry, while rapidly growing and innovating, faces several key challenges as it seeks to offer seamless, secure, and efficient payment experiences.
These challenges affect both businesses implementing embedded payment solutions and consumers using them. Here are the primary challenges in the industry:
Despite the outstanding growth projections, merchants' adoption of embedded payments remains relatively low, with only 5% currently offering embedded payment options. (Storm2)
This presents both challenges and opportunities for the industry.
Barriers to adoption may include technological complexity, regulatory concerns, or a lack of awareness.
As the industry matures, addressing these challenges and driving merchant adoption will be crucial for realizing the full potential of embedded payments.
With the rise in embedded payments, data security has become a top challenge as cyberattacks have increased by 50% over the last year. (Purple Sec)
As companies handle more sensitive payment data, they become prime targets for hackers.
This is important because breaches can lead to financial losses, consumer distrust, and regulatory penalties.
For instance, the 2019 Capital One data breach impacted over 100 million customers, underscoring the importance of robust security measures.
Supporting a wide range of payment methods, including credit cards, digital wallets, and bank account payments, to cater to a diverse customer base can be both technically and operationally challenging.
Each payment method has unique requirements that must be addressed, from integration to fraud prevention.
Businesses must strike a balance between offering a broad selection of payment options and maintaining a streamlined user experience.
Failure to manage payment method diversity effectively can lead to customer frustration and abandoned transactions.
The embedded payments industry is rapidly developing, driven by changing customer preferences and technological advancements.
Businesses must stay agile and adaptable to keep pace with these changes, which may require ongoing investments in technology, staff training, and process optimization.
Failure to adapt can lead to outdated systems, customer dissatisfaction, and lost market share.
Successful businesses in the embedded payments industry will be those that can anticipate and respond to industry drifts and customer needs.
The embedded payments industry is poised for considerable growth, with numerous emerging opportunities shaping the future of financial transactions.
Here are some of the key opportunities in this rapidly expanding space:
As embedded payments continue to gain traction, there is a vast opportunity for expansion into new industries and markets traditionally underserved by traditional financial services.
This includes sectors like healthcare, education, and the gig economy, where embedded payments can streamline transactions and enhance user experiences.
With the increasing adoption of artificial intelligence and machine learning, embedded payments are becoming more personalized and customized to individual user preferences.
This opens up opportunities for businesses to offer tailored payment experiences, such as one-click payments, subscription models, or pay-per-use services, further enhancing customer engagement and loyalty.
Embedded payments have the potential to drive greater financial inclusion by providing access to financial services for underserved populations.
By integrating payment capabilities into everyday platforms and applications, embedded payments can reach individuals who may not have had access to traditional banking services, enabling them to participate in the digital economy.
As embedded payments continue to boom, there is a growing opportunity for collaboration between traditional financial institutions, fintechs, and non-financial brands.
By partnering with fintechs, banks can leverage cutting-edge technologies and innovative solutions to enhance their payment offerings.
On the other hand, non-financial brands can integrate payment capabilities into their platforms, creating new revenue streams and strengthening customer relationships.
The embedded payments industry is poised to benefit from adopting emerging technologies such as blockchain, quantum computing, and 5G.
These technologies have the potential to enhance security, speed, and scalability, making embedded payments even more attractive to businesses and consumers alike.
As these technologies mature and become more widely adopted, they will create new opportunities for innovation and growth in the embedded payments space.
Embedded payments are substantially impacting various groups in different ways.
Let me break down the effects on consumers, businesses, and investors:
The developments in digital wallet usage and embedded payments have far-reaching implications for various stakeholders.
For consumers, the increasing adoption of digital wallets offers greater convenience and enhanced security in transactions.
Meanwhile, businesses must contend with the challenge of integrating these payment systems while ensuring a seamless customer experience.
These shifts are driving a reevaluation of payment processing strategies across industries.
Moving forward, success in this space will hinge on user experience and security enhancements.
Those who prioritize innovation and customer engagement will be best positioned to thrive in the maturing world of digital payments.
