What are embedded finance solutions? A simple guide for UK businesses

Ridehailing platforms issuing credit cards, SaaS companies offering loans, and retailers offering digital wallets. We’re not in the financial Wild West – far from it, in fact. 

Embedded finance is unlocking opportunities in product development, customer retention, and revenue generation.

It’s one of the most exciting fintech innovations in recent years, but not everyone is clear on what it really means – for their business or their customers. So, we’ve written this article to provide a primer on embedded finance, as well as sharing some real-world examples that demonstrate the possibilities it can unlock.

It’s no exaggeration to say that embedded finance can completely revolutionise what your business does, you just need the knowledge and the right partner to make it work.

What is embedded finance?

Embedded finance solutions allow any company to offer financial products and services, like branded credit cards or digital wallets.

This is possible because regulated/licensed financial institutions can lend their capabilities to another business, either through a partnership or whitelabeling.

The benefits are significant and wide-ranging: improved customer acquisition and retention, increased revenue lines and product ranges, and lower costs. If you’re looking for an example of fintech enabling innovation, embedded finance is one of the best.

Types of embedded finance solutions for UK businesses

Embedded finance is, by its very nature, all about flexibility and creating new opportunities. If you can think of a way you’d like to help 

Companies use embedded finance in fairly subtle ways (e.g. creating a seamless checkout experience), others build their entire business on these solutions (e.g. offering services like savings accounts). We’ll take a whistlestop tour of some common use cases now, but know that there are hundreds of other ways businesses can use embedded finance.

• Digital wallets – letting customers keep their funds in your ecosystem.

• Payments - whether that’s cross-border or domestic payments.

• Buy Now, Pay Later – providing a credit line to split one payment into several.

• Credit facilities – co-branded credit facilities encourage customer loyalty and returning custom.

• Business loans – allowing B2B infrastructure providers to offer finance to their customers.

• Investments and savings accounts – Banking as a Service (BaaS) is a more technical type of embedded finance.

We’ve written an article outlining nine embedded finance use cases, if you’re curious about more examples.

Types of embedded finance solutions for UK businesses

Embedded finance is, by its very nature, all about flexibility and creating new opportunities. If you can think of a way you’d like to help 

Companies use embedded finance in fairly subtle ways (e.g. creating a seamless checkout experience), others build their entire business on these solutions (e.g. offering services like savings accounts). We’ll take a whistlestop tour of some common use cases now, but know that there are hundreds of other ways businesses can use embedded finance.

• Digital wallets (e.g. Vinted balance, via Mangopay) – letting customers keep their funds in your ecosystem.

• Payments (e.g. Airwallex) - whether that’s cross-border or domestic payments.

• Buy Now, Pay Later (e.g. retailers using Klarna) – providing a credit line to split one payment into several.

• Credit facilities (e.g. John Lewis Credit Card, via Barclaycard) – co-branded credit facilities encourage customer loyalty and returning custom.

• Business loans (e.g. Shopify Capital via YouLend) – allowing B2B infrastructure providers to offer finance to their customers.

• Investments and savings accounts (e.g. MaryGold & Co. via Griffin Bank) – Banking as a Service (BaaS) is a more technical type of embedded finance.

We’ve written an article outlining nine embedded finance use cases, if you’re curious about more examples.

Benefits of embedded finance for UK businesses

The benefits of embedded finance are most impressive as they start compounding.

Integrating financial services and products improves customer satisfaction, acquisition, and retention. If you can offer more ways to pay, in ways that integrate seamlessly with your existing experience, your customers will be less likely to go elsewhere.

There’s also the opportunity to unlock new and differentiated revenue streams. You could earn interest earned on credit or Buy Now, Pay Later schemes or encourage repeat custom through loyalty schemes.

Another benefit to you and your customers is how embedded finance solutions can reduce friction. Take an eCommerce checkout as an example. When payment processing is embedded directly into your checkout, with no redirection to third parties, the process is smoother, quicker, and feels more trustworthy. Your customers are happier and you get more revenue.

It’s also worth considering the additional insights you can unlock thanks to embedded finance. When you can view payments data end-to-end, connected with your other performance data, you can enrich your understanding of the customer experience.

Embedded finance challenges and considerations

If you’re adding any kind of financial element to your business, you need to be aware of the risks and responsibilities you’re taking on. 

The business case

Before you get anywhere, you need to first consider the cost and complexity of any integration. This is a significant undertaking and while fintechs have developed smooth, optimised onboarding processes, there’s no escaping the scale of this undertaking. The numbers have to add up for you and you need to be sure your platform (and the colleagues who maintain it) can handle the integration.

Asking your customers to trust you with their money is a big step; then again, you’re likely already a trusted provider for your vertical. You’ll need to spend time on a communications plan for the launch of any new embedded finance solution. Keep it simple, upfront, and with further detail available beyond the headline news. Ideally, the provider will be able to help you make the integration a success.

A focus on providers

You want to be sure that your embedded finance solution is being provided by an FCA-registered company if you intend to offer services in the UK. Do this by using the FCA’s firm checker tool. Your provider also needs to offer a secure and compliant service, meeting standards such as PSD2 for payments.

Adding another party to your data flow also calls into focus issues around GDPR and data protection. Any legitimate provider will meet their duties under GDPR when handling user data as standard, but it’s always worth confirming their customer data protocols.

How to choose an embedded finance provider

One of the non-negotiable elements when choosing a fintech partner is flexibility. If you’re going to be integrating their product(s), you need to know it’s possible in a way that really works for your business and customers. One-size will never fit-all in embedded finance.

Some of the most important factors to consider are:

• Pricing – fee structure, minimum and maximum volumes and values, cost to upgrade or downgrade.

• SDKs, APIs, and webhooks – you need a partner that can provide the integrations you (and your development team) need.

• Support and service – a clear SLA for your relationship, from onboarding to regular operations, will mean you’re less likely to run into unpleasant surprises.

• Security measures – fintechs can take different approaches to security, but some basics are essential:

  • Authorised/licensed by relevant government body

  • ISO27001, PSD2 and 3DS (for payments), multi-factor authentication for accounts

  • Anti-fraud policies and processes to protect customers

• Ability to deliver – do they have case studies covering your situation? Can your network vouch for them? Do they have a good reputation?

Real world examples of embedded finance in the UK

The use cases for embedded finance aren’t always obvious, but that’s largely down to how flexible and varied the options are. Let’s put embedded finance into context with some practical examples.

The most famous example of embedded finance

There is one example of embedded finance that is so incredible, it escaped the fintech bubble and entered popular culture. Have you heard of ‘the bank of Starbucks’?

Starbucks cards used to be a vanilla gift card, but have developed into digital wallets and rewards platforms. These cards are so popular that, in its Q2/25 results, its Stored value card liability and current portion of deferred revenue totalled $1.92 billion. These funds are, in effect, an interest-free loan for the business – pre-paid, pre-sale cash. When gift cards expire, those funds become revenue – totalling $164.5 million in 2020.

While maybe not the most technical example of embedded finance, it works as a great (and extreme) example of the ways financial products can benefit businesses.

Carwow: Car-change platform processes its own payments

Carwow used embedded finance to create an ownable, branded, and deeply trustworthy payments process for its dealers and buyers.

When a dealer opens a Carwow Wallet they, in effect, open a whitelabelled connected account, with GBP bank details for secure payment and storage of funds.

For an auction site (or other marketplace), a seamless, on-platform buying and selling process is one of the biggest attractions. Making a purchase, then having to move to an escrow provider or handle transactions off-platform can create a lot of friction and doubt.

In using embedded finance to manage deals from start to finish, Carwow boosted trust, transparency, and simplicity with its customers.

Moss: Expense management platform builds its own payments function

Moss – a financial platform to help finance and accounts teams operations – was struggling to manage multi-currency transactions and global payments efficiently.

This was a problem for the business and their customers, so needed addressing quickly.

Through the power of embedded finance, Moss was able to create a payments product directly within its user interface featuring multi-currency wallet functionality, batch payout capabilities, and comprehensive payment webhooks.

How Airwallex empowers UK businesses with embedded finance

Airwallex’s embedded finance solutions give you a new level of control over your customer experience. Flexible, powerful, and collaborative, integrating with Airwallex can be the unlock your business has been waiting for.

As you can see from the Carwow and Moss case studies, embedded finance can deliver flexible, bespoke solutions to complex problems. The positive effects are wide-ranging, from cost savings and customer confidence to new product development and global expansion.

Find out more about what Airwallex embedded finance can do for you.

Endless possibilities and impressive ROI

Some of the most exciting innovation in 2025 is happening in embedded finance. The opportunities it can unlock are incredible, allowing businesses to develop deeper customer loyalty, unlock new revenue, and develop their products in exciting ways.

Embedded finance feels like the best of the future – open, flexible, and creative.

If you’re feeling curious about fitting financial products into your business, Forrester research showed Airwallex’s embedded finance customers achieve an ROI as high as 237%.