Posted: April 5, 2023 By Kieran Darmody

All you need to know about Embedded Finance 

This blog discusses the concept of embedded finance, its benefits, how it works, and how it can support business owners.

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Business owners are crucial to the economy, yet they often encounter the most difficult challenges When the pandemic hit, SME owners faced financial turmoil and struggled to access the necessary capital and resources to sustain their businesses.  

Three years later, many of these businesses have closed or failed to regain their pre-pandemic levels, and those that remain face the threat of a potential UK recession.  

SME owners required support then, just as they do now. However, the difference now is that there are more alternative financial solutions available, often in the form of embedded finance. With high inflation, increased taxation, supply chain issues, and hiring shortages, it is an excellent time for business owners to explore how they can benefit from an embedded finance offering via their payment processor, ecommerce marketplace, or software provider, such as inventory management or ePOS systems. 

What is Embedded Finance? 

Embedded finance is a rapidly emerging and highly promising area of finance and is among the many innovative solutions introduced by fintechs in recent years. It refers to financial services that are integrated into a platform or application, allowing business owners to access them directly from within their day-to-day operations.  

This means that traditional financial services such as payments, banking, and lending are provided by non-traditional players, rather than the usual high street banks. As a result, business owners can access capital and lending instantly, and at more favourable terms.  

Additionally, increased competition has led to more partnerships between fintechs seeking new customers and high street banks looking to retain their customer base. Many businesses can already benefit from embedded finance services through providers such as Klarna, Barclaycard, WorldPay, Elavon, and Uber Eats, where the entire customer journey, from application to funding, can take place within the app in just a few clicks. 

How does it work? 

By utilising an embedded finance provider for funding, you can access flexible funding that can cater to your future business needs. The funding process is highly efficient, typically taking just a few clicks, and the funding amount and terms are agreed upon upfront, often with a customised offer being presented instantaneously. This process involves the embedded finance platform being integrated with the platform you’re already using, and the customer data available is used to pre-select or pre-approve a business for funding before it’s even requested. This streamlines the process and eliminates the uncertainty of rejection, giving you upfront knowledge of the funding amount and terms, rather than having to wait for days or weeks to receive a decision.  

As a result, business owners can easily access instantly available funding, complete with a pre-populated application, all within the familiar and trustworthy ecosystem they’re already using. 

How can embedded finance support business owners? 

Embedded finance services enable business owners to make decisions at their convenience, which can be used to support their financial needs and scale their businesses. These platforms often use AI and machine learning to personalise their products, providing hyper-personalised solutions for SME owners. By leveraging this technology, fintechs can quickly identify SME owners’ pain points and offer them solutions, providing much-needed relief to those who may have faced funding rejections or cash flow issues. 

Cash flow is a major concern for many business owners, particularly when it comes to unexpected expenses, upfront payments for inventory or marketing, or delayed client payments. Traditional bank loan applications can take a long time to be approved, leaving struggling businesses in a difficult position. However, embedded finance greatly reduces the likelihood of rejection through pre-approval and improved regular data, ensuring that business owners can access the funding they need when they need it. 


Running a business involves a multitude of responsibilities, from outmanoeuvring competitors to managing personnel and inventory. Business owners desire financial services that are easily accessible, reliable, and straightforward. 

Embedded finance allows platforms, payment processors, e-commerce marketplaces, and SME service providers to offer a range of financial services within their existing ecosystem. Business owners can choose the best product for their specific situation, provided instantly from a dependable source. Through the innovative power of embedded finance, platforms can improve customer loyalty and increase customer lifetime value. Furthermore, business owners can utilise funding to support their businesses and spur growth, positioning themselves ahead of the curve as the economy recovers. 

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