Embedded Finance: Revolution or Just Another Buzzword?
Alright, let's talk about embedded finance. Or, as I like to call it, "finance" trying to sneak its way into everything you already do online. Is it a revolution? Give me a freakin' break.
The Hype Train is Leaving the Station
So, the number crunchers are saying the global embedded finance market will balloon to $646.1 million in 2025, a sweet 9.3% jump. And by 2030, we're supposedly looking at almost $839 million. Okay, cool. Numbers. But let's be real, projections are about as reliable as my ex promising to pay me back. Embedded Finance Market Research Bundle 2025: Size & Forecast by Value and Volume Across 21 Reports - 100+ KPIs by Business Models, Distribution Models, End-Use Sectors, and Key Verticals - ResearchAndMarkets.com - Business Wire
They're slinging around terms like "total addressable market" – TAM, if you're hip – estimating some $185 billion just sitting there in North America and Europe, ripe for the pickin'. But only $32 billion is actually being touched right now. That's like saying there's a gold mine in my backyard, but I'm too lazy to grab a shovel.
And don't even get me started on the SaaS providers. These guys are supposedly raking in 36% of SME acquiring revenues with their integrated payment solutions, and they're projected to grab almost half by 2028. Good for them, I guess. But what does this really mean for the average Joe or Jane trying to run a small business? Are they actually seeing the benefits, or are they just getting nickel-and-dimed to death by another layer of tech?
The "Innovation" That Isn't
The whole pitch with embedded finance is that it's supposed to be seamless, frictionless, and all that jazz. Like, you're buying a new yoga mat online, and boom, financing options pop up right there on the checkout page. Convenient, right? Sure, if you're cool with getting into debt for a freakin' yoga mat.
We're told that Banking-as-a-Service (BaaS) platforms are the secret sauce, making it easier for companies to embed these financial services. Weavr, Unit, Solaris... the list goes on. And then there are the "superapps" like Grab and Gojek, trying to be everything to everyone. It's like these companies are playing SimCity with our financial lives.
But here's the thing: most merchants are already happy with their existing banking services. Why would they go through the hassle of switching to some newfangled embedded finance solution if what they have already works okay? It's like switching from a perfectly functional iPhone to the newest model just because it has an extra camera lens. Pointless.
Oh, and let's not forget about regulations. India's already cracking down on unlicensed digital lenders, and the EU's PSD3 and FIDA framework is looming on the horizon, promising to shake things up even more. So much for frictionless.
I mean, the data shows SME adoption of vertical software in the US jumped from 50% to 59% in just two years (2022-2024). Is embedded finance riding on the coattails of that trend? Or is it really driving the change? I honestly can't tell.
Who Benefits? (Hint: It Ain't You)
Stripe, Razorpay, Apple, Google, Amazon... these are the names that keep popping up. They're all expanding their embedded finance offerings, trying to get their tentacles into every aspect of our financial lives. Are they doing it to make our lives easier? Please. They're doing it to make themselves richer.
Seriously, how much of this "innovation" is actually about improving people's lives, and how much is just about creating new revenue streams for tech giants? And are we really okay with handing over even more control of our finances to these companies? I ain't.
Offcourse, there is the other side of the coin. Embedded finance could help people access financial services who wouldn't otherwise be able to. It could streamline payments and make things more efficient. It could... but will it? Or will it just be another way for the rich to get richer and the poor to get poorer?
Another Day, Another Dollar... for Someone Else
Look, I'm not saying embedded finance is inherently evil. But let's not pretend it's some kind of altruistic revolution. It's a business, plain and simple. And like any business, it's driven by profit. So, before you jump on the bandwagon, ask yourself: who's really benefiting here? And is it worth the risk? Then again, maybe I'm the crazy one here.
So, What's the Real Story?
It's the same old song and dance: tech companies repackaging existing financial products, slapping a fancy label on them, and selling them as the next big thing. Don't fall for the hype.
