How embedded payment solutions are powering fintech growth and loyalty

The financial services industry is ever-advancing, and payments are central to this ongoing evolution. While many fintechs offer services like wealth management and digital banking, the true competitive edge lies in seamlessly embedding these services within the payments experience. Embedded payments are no longer just a convenience; they’re the bridge connecting everyday spending, saving, and investing into a unified and intuitive financial ecosystem.

At Marqeta, we strongly believe that payments are more than just transactions; they are a powerful strategic asset that fintechs can leverage to help differentiate,  boost customer experiences, and  unlock new revenue streams. 

Here’s how fintechs are harnessing the power of payments to gain a competitive edge in the modern world of financial services.

Consumers today have come to expect fast, frictionless payments embedded seamlessly into their everyday experiences. Whether it’s accelerated wage access (AWA), peer-to-peer (P2P) transfers, or flexible payments, speed and convenience can be non-negotiables. The rise of digital wallets, one-click checkout experiences, and real-time settlement has reshaped consumer expectations, making traditional payment methods feel somewhat outdated in comparison. 

In fact, according to Marqeta’s 2024 State of Payments report, 71% of all U.S. consumers surveyed expressed that they were neutral or didn’t have any worries about moving to a cashless society. Almost one-third of U.S. customers reported using cash less than they did 12 months ago, and 28% said they now feel awkward paying with cash. 

But consumers aren’t the only ones looking for more. Businesses are also seeking payment solutions that can help improve cash flow management, streamline operations, and boost customer retention. And as the gig economy, marketplace platforms, and on-demand services have grown, so too has the demand for embedded financial solutions that enable real-time, customized transactions. Fintechs that prioritize payments innovation may be better equipped to help meet these demands head-on, better positioning themselves as leaders in the industry.

According to our 2024 State of Payments global survey results, 87% of respondents said immediate pay would attract them to use a gig work platform. 90% of US consumers who got paid immediately said it makes it easier to plan for finances and increases financial peace of mind. The results are in, and real-time payments are reshaping the way businesses and individuals interact with money. 

From gig workers receiving same-day wages to businesses managing Just-in-Time payments, instant access to funds creates more engaged and loyal customers. Fintechs that integrate real-time disbursements and settlement capabilities can significantly enhance both user experience and retention. 

The ability to move money in real time also reduces reliance on traditional banking infrastructure, which often comes with its own delays and limitations. Whether it's payroll advances, AWA, or instant refunds, fintechs that prioritize real-time payment solutions can help craft a compelling value proposition for both businesses and consumers.

From dynamic spend controls to virtual cards, today’s card users have come to expect more. Whether it’s enabling businesses to manage employee expenses in real time or providing customers with personalized financial tools, modern card issuing equips fintechs to innovate and differentiate from the crowd.

Modern card issuing platforms enable fintechs to tailor payment experiences to the unique needs of their users by offering features like cashback and rewards, personalized spend data, and category-based transaction controls. By leveraging APIs, fintechs can create highly customized card programs that align with their brand and user experience goals, strengthening customer loyalty and engagement.

Embedded finance has dramatically changed how consumers and businesses interact with financial services. The ability to integrate payments, lending, and banking directly into everyday platforms can help create a seamless user experience and drive engagement.

Buy Now, Pay Later (BNPL) solutions, for example, enable customers to split purchases into set installments without leaving the checkout page. Similarly, many vertical SaaS platforms are embedding payments into their software, allowing businesses to manage transactions without the need for third-party processors. Simply put, the future of financial services is deeply embedded, reducing friction and enhancing convenience at nearly every touchpoint.

Beyond improving customer experience, payments may also serve as a major revenue driver. Fintechs can generate revenue through interchange fees, premium card products, and value-added services like FX and loyalty programs. Digital banks often offer tiered membership plans with enhanced payment features, while expense management platforms provide insights and analytics as an added-value service. 

Embedded payments innovation allows fintechs to build more sustainable, diversified revenue models that go beyond traditional lending or SaaS subscriptions. By leveraging payments as a revenue stream, fintechs can create scalable growth models that are less reliant on external funding.

Innovating in payments isn’t without its hurdles. Fintechs must navigate:

Regulatory compliance: The payments industry is highly regulated, requiring careful adherence to KYC, AML, and data protection laws.

Fraud prevention: Digital payments can introduce risks, making robust fraud detection and authentication essential.

Scalability: As transaction volumes grow, fintechs need payment platforms that scale efficiently while maintaining uptime and performance.

Addressing these challenges requires a combination of advanced technology, strong partnerships, and a deep understanding of evolving regulations. Fintechs that work with partners who proactively invest in compliance, fraud prevention and protection, and infrastructure scalability will be best positioned to thrive in the modern payments industry.

The payments landscape is continuing to evolve and change, with several trends beginning to shape the next wave of fintech innovation:

Artificial intelligence (AI): AI is transforming payments by enhancing fraud detection, automating risk management, and personalizing financial services. AI-driven authentication methods, such as behavioral biometrics and machine learning-powered fraud scoring, are making digital payments more secure while reducing friction for legitimate users.

Blockchain & digital assets: Blockchain technology and digital assets are unlocking faster, borderless transactions. Stablecoins and decentralized finance (DeFi) platforms are creating new opportunities for cross-border payments, remittances, and peer-to-peer transfers without traditional banking intermediaries. As regulatory clarity improves, blockchain-powered payments could become a mainstream alternative to traditional financial networks.

Invisible payments & automation: From embedded finance to Just-in-Time processing, the payments space is growing less and less visible and becoming seamlessly integrated into the background. The continued trend towards automated, frictionless transactions will require fintechs to heavily prioritize user experience and security to earn and maintain loyalty, confidence, and convenience.

Payments have grown from a piece of the puzzle into a primary driver for differentiation in today’s fintech space. Whether through real-time payments, embedded finance, or revenue diversification, modern payment solutions are at the heart of fintech innovation.

At Marqeta, we’re on a mission to empower fintechs to harness the full potential of payments with cutting-edge infrastructure, flexible APIs, and real-time data insights. Much of the future of financial services is being built on payments, and it’s the fintechs that recognize this and innovate accordingly who will lead the way.

Want to learn more about how Marqeta can help you leverage payments as a strategic advantage? Get in touch today.