Embedded finance is transforming how software companies and online marketplaces deliver financial services to their users. Rather than relying solely on third-party vendors or redirecting customers to external banking platforms, businesses can now offer integrated financial products directly within their platforms—ranging from payment processing and lending to invoicing and insurance. For SaaS platforms and marketplaces, this capability is no longer a futuristic concept—it’s a competitive necessity in 2025. Offering native, seamless financial tools improves the customer experience, generates new revenue streams, and increases platform stickiness. The shift from traditional partnerships to embedded infrastructure also gives these businesses greater control over user flows, monetization, and data insights. Implementing embedded finance requires thoughtful integration of merchant account ecommerce solutions, modern APIs, and a trusted merchant services provider who can support compliance, scalability, and security at every stage.
What Is Embedded Finance in the SaaS and Marketplace Context?
Embedded finance refers to the integration of financial capabilities—like payments, credit, or banking—into non-financial software platforms. For SaaS companies, this might mean allowing users to accept payments, issue invoices, or finance subscriptions directly within the application. For marketplaces, embedded finance powers end-to-end transactions between buyers and sellers, handling everything from escrow to disbursement without leaving the platform. This financial infrastructure often runs in the background, using APIs and white-label services that make the user experience feel native[1]. For example, a project management SaaS could embed online payment merchant services so freelancers can invoice clients without switching platforms. A B2B marketplace could enable net terms or on-demand capital for suppliers. These use cases demonstrate that embedded finance is more than a technical feature—it’s a strategic business model that strengthens ecosystem loyalty, data control, and profitability.
How Embedded Finance Benefits SaaS Platforms and Marketplaces
SaaS companies and online marketplaces that integrate embedded finance tools stand to gain both in customer retention and revenue. First, embedded payment tools reduce friction by eliminating the need for users to rely on external services for transactions. This seamless experience improves user satisfaction and makes the platform more indispensable. Second, platforms can earn significant revenue through transaction fees, interest margins, or value-added services. Instead of acting solely as software providers, they evolve into financial intermediaries with recurring payment income. Third, embedded financial tools increase user data visibility[2]. For instance, platforms gain insights into transaction volumes, cash flow patterns, and creditworthiness, which can drive more personalized services and smarter business decisions. Finally, by offering built-in merchant processing solutions, SaaS and marketplace providers reduce user churn and improve onboarding efficiency. When users can sign up for payments, lending, and payout tools all in one place, they’re less likely to leave the ecosystem.
Payment Acceptance and Merchant Accounts
The first layer of embedded finance involves enabling businesses on your platform to accept payments. This requires integration with a merchant services provider that offers scalable infrastructure for processing credit cards, ACH, and alternative payments while ensuring compliance with KYC and anti-fraud protocols.
Payout and Settlement Infrastructure
For marketplaces, the ability to disburse funds to sellers or service providers is critical. This layer ensures timely, accurate payouts to users, factoring in commission fees, tax withholdings, and real-time reporting.
Lending and Working Capital Tools
Platforms can embed financing services such as invoice factoring, revenue-based loans, or early payout options. These tools help users manage cash flow and increase transaction volumes, especially for small businesses.
Digital Wallets and Account Services
Digital wallets enable users to store funds, manage balances, and make in-platform purchases without external banking. These tools also support split payments and complex payout rules in marketplace environments.
Challenges of Implementing Embedded Finance
Despite the benefits, embedded finance comes with complexity, especially for platforms without prior financial infrastructure experience. Compliance and regulatory requirements vary by region, and companies must navigate KYC onboarding, anti-money laundering (AML) obligations, and data protection standards[3]. Working with a trusted merchant services provider is essential to avoid exposure to legal risk or operational downtime. Technical challenges include building scalable APIs that can handle payment routing, settlement logic, and webhook events for status tracking. Security must also be prioritized, with secure credit card processing protocols and tokenization used to protect customer data. Poor implementation can lead to declined transactions, high dispute rates, or delayed payouts—all of which damage the user experience. Businesses must balance speed-to-market with diligence in vendor selection, integration design, and ongoing support. Partnering with an expert in merchant processing solutions mitigates risk while accelerating time to value.
Choosing the Right Merchant Services Provider for Embedded Finance
Your choice of merchant services provider will shape every aspect of your embedded finance strategy. A capable partner must offer flexible APIs, global payment support, and the ability to onboard sub-merchants quickly through managed KYC and underwriting[4]. Look for providers with proven experience in working with SaaS and marketplace platforms, not just standalone eCommerce stores. The ideal partner will also offer tiered pricing structures, dispute management tools, and customizable white-label interfaces. Importantly, your provider must be committed to secure credit card processing using PCI DSS-compliant infrastructure and advanced fraud protection. In 2025, users expect instant payment confirmations, real-time dashboard insights, and automated transaction records—all of which must be supported by the underlying processor. For platforms managing complex transaction types or serving regulated industries, additional layers of compliance and fund flow transparency are non-negotiable. Choosing a scalable, reputable provider ensures you can focus on growing your business rather than fixing avoidable payment issues.
The Rise of Monetization Models Powered by Embedded Finance
SaaS companies and marketplaces are increasingly monetizing financial services as a core revenue stream, not just a convenience. Payment processing fees, float income from stored balances, and interest on user loans all offer revenue opportunities tied directly to transaction volume. These models work well because they scale alongside user engagement—when your users succeed, so do you. For example, platforms offering merchant account ecommerce tools can charge a small percentage per transaction, increasing revenue without raising subscription fees. Financing services like invoice factoring or instant payouts can be monetized by charging service fees or interest rates, providing value to users while increasing platform margins. Some SaaS tools even introduce tiered subscriptions based on financial service access—offering premium analytics, faster settlement times, or multi-currency support as upsell features. Embedded finance lets businesses transform from static service providers into dynamic, revenue-generating financial ecosystems tailored to their niche[5].
Conclusion
Embedded finance is no longer a fringe innovation—it’s a defining characteristic of modern SaaS and marketplace platforms. By integrating online payment merchant services, secure settlement tools, and modular APIs, these businesses can deliver seamless financial experiences while unlocking new monetization channels. The key is selecting a merchant services provider that understands your technical goals and can offer compliance-ready, scalable infrastructure built for real-world demands. At Payment Nerds, we help SaaS platforms and marketplaces design embedded finance stacks that streamline transactions, improve security, and grow revenue through integrated financial workflows. As embedded finance continues to reshape digital commerce, the platforms that invest early and wisely will set the standard for their industries—and reap the financial rewards.
Sources
- Plaid. “The Embedded Finance Report: How Software Is Becoming the Bank.” Accessed April 2025.
- McKinsey & Company. “Embedded Finance: Who Will Lead the Next Payments Revolution?” Published October 2022.
- Accenture. “Embedded Finance for Platforms: New Value in the Platform Economy.” Accessed April 2025.
- Forrester. “The State of Embedded Finance: Market Opportunities and Strategic Insights.” Accessed April 2025.
- Harvard Business Review. “The Strategic Importance of Embedded Finance.” Accessed April 2025.
