Embedded finance market value to exceed $138bn in 2026 - The EE

Embedded finance market value to exceed $138bn in 2026

Nick Maynard of Juniper Research

A new study from Juniper Research has found that the value of the embedded finance market will exceed $138 billion (€117.08 billion) in 2026, from just $43 billion (€36.48 billion) in 2021.

Embedded finance occurs when financial services are embedded within non-traditional financial services areas, such as banking services within a ridesharing app, or insurance services within an eCommerce checkout process. The market value includes insurance premiums, transaction revenue and licencing costs.

The research identified that this extraordinary growth of over 215% will be driven by the increasing availability of APIs from financial services vendors. It predicts that the easy integration of these APIs will lower the barriers to entry for financial services and create a significant new revenue opportunity for providers of embedded finance.

Buy now pay later leading market value

The new research, Embedded Finance: Key Trends, Segment Opportunities & Market Forecasts 2021-2026, found that revenue from buy now pay later services, which embed lending seamlessly in the eCommerce checkout process, will account for just over 50% of the embedded finance market in 2026.

Research author Nick Maynard explains, ‘Embedded lending at point of sale is a massive opportunity for providers such as Klarna or Afterpay, but it is also an opportunity for banks. As open APIs proliferate, we expect banks to take a significant interest in the market; leveraging their existing user relationships and trusted brands to create compelling propositions.’

Embedded insurance represents compelling new distribution mode

The research also found that embedded insurance holds promise as a compelling way to boost the uptake of insurance for high-value products with eCommerce users. The research identified that by bringing insurance directly into the checkout process and pairing it with the individual high value item, product insurance becomes a compelling proposition.

The research found that this integration and greater use by high-end eCommerce retailers will see global embedded insurance premiums grow to over $10 billion (€8.48 billion) in 2026, from just $3.8 billion (€3.22 billion) in 2021.

For more insights, download the free whitepaper: Why the Future of Fintech is Embedded Finance

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