$59.7%: That’s the share of business-to-consumer and hybrid firms defining success in embedded finance as growth with existing customers, a figure that underscores a fundamental shift in how financial services are being delivered – and valued. A new report from PYMNTS Intelligence, in collaboration with Green Dot, reveals that embedded finance isn’t a monolithic strategy, but a series of distinct approaches dictated by a firm’s position within the ecosystem. This isn’t simply about adding payments options; it’s about fundamentally reshaping customer relationships, operational efficiency, and risk management, and the choices companies make now will determine who thrives in this rapidly evolving landscape.
The core finding is deceptively simple: how a company uses embedded finance – whether directly to consumers, as an infrastructure provider for other businesses, or a combination of both – dictates the benefits they seek and the challenges they face. This isn’t a case of one-size-fits-all technology; it’s a nuanced interplay of value drivers, regulatory expectations, and partner selection criteria. Consider the contrast: while B2C firms prioritize deepening existing customer bonds, B2B providers are laser-focused on operational health, with 25.9% citing better cash flow performance and 25.9% pointing to lower costs as primary success metrics. This divergence highlights a critical point – embedded finance isn’t just about what you offer, but who you’re offering it to.
Transparency and cost-complexity are emerging as significant friction points, particularly for B2C firms. Nearly 29% cite a lack of visibility into provider processes as a major hurdle, while 25.4% struggle with the high costs of integration. This suggests that the promise of seamless user experiences is often hampered by opaque pricing and complex implementation processes. This is a 15% increase in reported integration costs compared to a similar PYMNTS study conducted in February 2024, indicating a growing challenge for firms attempting to quickly deploy embedded finance solutions. Provider-side constraints further exacerbate these issues, with B2B firms reporting limited flexibility and customization options, and a concerning 23.5% finding a low return on investment.
Original reporting: pymnts.com.
Regulatory scrutiny is on the horizon, but the level of concern varies. While most firms don’t anticipate regulation being harmful, a clear majority – particularly among B2B providers – expect increased oversight in the next three years. This isn’t necessarily a negative outlook; rather, it reflects a growing recognition that a more regulated environment will demand greater program governance, compliance maturity, and operational resilience. The market is preparing for a higher bar, shifting the focus from speed-to-market to demonstrable trustworthiness. This expectation is particularly acute for sponsor banks and infrastructure providers, who are already facing closer supervisory attention.
The choice of embedded finance provider is, therefore, paramount, and institutional trust reigns supreme. A striking 69.1% of B2B firms prioritize trust above all else, emphasizing data security and governance over rapid deployment. This makes intuitive sense – B2B providers are often operating deeper within the technology stack, carrying greater third-party risk, and relying on the provider’s reliability as a core component of their own service. In contrast, B2C and hybrid firms place greater weight on “business fit,” ensuring alignment with the customer experience. This difference in emphasis underscores the need for a tailored approach to partner selection, based on a clear understanding of the firm’s role in the ecosystem and its specific priorities. The survey of 515 senior leaders, conducted between August 21 and September 10, 2025, clearly demonstrates this divergence.
What this means for your wallet: as embedded finance matures, expect to see more sophisticated – and potentially more expensive – solutions. The focus on transparency, security, and compliance will likely translate to higher upfront costs, but also to more reliable and trustworthy services. Consumers should watch for companies that prioritize clear pricing and robust data protection policies when selecting embedded finance options, and investors should favor firms that demonstrate a commitment to long-term sustainability over short-term gains. The key question now is: will companies prioritize building genuine trust with their partners and customers, or will they continue to chase the allure of rapid, but potentially unsustainable, growth?
