Europe embedded finance market size reached USD 21,511.2 million in 2022, and is likely to cross a mark of USd 24,230.9 million in 2023. The market is set to expand at a CAGR of 14.5% during the forecast period.
By 2033, Europe embedded finance sales revenues will total around USd 94,081.7 million. Europe embedded finance market is likely to hold 25% share of the global embedded finance market.
Key Market Shaping Factors
Embedded finance is the integration of financial services into non-financial products/services. In other words, it involves embedding financial capabilities into products and services offered by technology companies, retailers, and other non-financial firms.
Embedded finance allows these companies to offer financial services to their customers without having to build out a full-fledged financial institution.
With the development of payment methods, rising e-commerce, better broadband connectivity, and the introduction of new technologies, the digital payment system is fast growing. To facilitate recurring billing, online systems such as PhonePe, Paytm, and Google Pay use payment gateway APIs, which are also used in embedded finance.
Successful payments made through embedded finance services have significantly increased during the last few years and the trend is likely to continue. This in turn will boost embedded finance sales revenue.
Successful embedded finance payments shall increase with time, notably in e-commerce. Decentralized procedures used in embedded finance allow customers to share their data with banks while maintaining the highest level of security. Users can access different payment options and manage their funds more effectively as a result.
Embedded finance offers various benefits to both financial institutions and users. For instance, it helps financial institutions to access a large pool of customers and build a more profitable business.
It allows businesses in MSME, B2B, and B2C segment to improve their customer lifetime value, vertically scale their product offering, and monetize their customer base.
Similarly, embedded finance allows users to access affordable financial services and receive customized offerings. It significantly improves customer experience.
| Attribute | Key Insights |
|---|---|
| Estimated Europe Embedded Finance Market Size (2023) | USD 24,230.9 million |
| Projected Europe Embedded Finance Market Value (2033) | USD 94,081.7 million |
| Value-based CAGR (2023 to 2033) | 14.5% |
| Embedded Payment Market Share (2033) | 34.9% |
| Fintech Vendors Growth Rate (2023 to 2033) | 17.1% |
| Transportation & Logistics Companies Market Share (2023) | 22.3% |
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Europe embedded finance market expanded at a CAGR of 10.8% from 2018 to 2022. Total market valuation in Europe reached USD 21,511.2 million in 2022. Over the projection period between 2023 and 2033, embedded finance demand in Europe is set to rise at 14.5% CAGR.
Growing need for more efficient and cost-effective financial services will continue to provide impetus to the Europe market.
The demand for embedded finance in Europe is being driven by several factors. This includes the need for more efficient and cost-effective financial services and growing demand for digital services and products.
Increased competition among fintechs and the emergence of innovative technologies such as blockchain and artificial intelligence are also boosting the market.
Similarly, rising need for more secure and transparent financial transactions is driving the demand for embedded finance solutions.
The European Union's Payment Services Directive (PSD2) has created a more level playing field for fintech and banks, which is also positively impacting demand for embedded finance solutions.
The increasing demand for digital banking solutions is playing a key role in boosting the Europe embedded finance industry. Open banking is a technology-driven system that allows third-party providers to access and use customer financial data with their permission.
Payment services such as mobile payments, contactless payments, and digital wallets are becoming increasingly popular. Financial services such as investments, insurance, and loans are also gaining wider popularity. This is because they offer customers a convenient and secure way to access these services.
New products and services are being introduced by companies to increase their revenues and improve customer experience. For instance
These key developments will have a positive impact on the overall growth of Europe embedded finance industry during the projection period.
Strong Presence of Digital Banking Solutions Making the United Kingdom a Leading Embedded Finance Market
The United Kingdom is leading the Europe embedded finance market for several reasons. Firstly, the country has a long history of innovation in the fintech sector. This is due to a supportive regulatory environment that encourages experimentation and innovation. As a result, the United Kingdom has become a hub for fintech companies.
The United Kingdom is home to various world’s leading fintech companies, such as Revolut and Monzo. Secondly, the country houses a large number of world-leading banks, such as HSBC, Barclays, and Lloyds Banking Group, all of which are actively exploring and investing in embedded finance solutions.
Thirdly, the United Kingdom is home to several innovative startups such as TrueLayer, which are leading the way in developing embedded finance solutions.
Finally, various leading universities and research institutions are actively researching and developing new technologies that can be used to power embedded finance solutions.
Thanks to these aforementioned factors, the United Kingdom will hold a prominent share of 23.6% in Europe market by 2033
Growing Popularity of Open Banking & InsurTech to Create Prospects for Germany Embedded Finance Market
Embedded finance in Germany offers a great opportunity due to open banking, digital payments, financial inclusion, the regulatory framework, and insurance technology.
Open banking allows financial institutions to access customer data from other banks, allowing them to offer better financial services. Digital payments are on the rise, creating an opportunity for embedded finance providers to offer innovative payment solutions.
Financial inclusion can help bring unbanked people into the financial system and offer them access to financial services. The regulatory framework provides a favorable environment for companies to enter the market and offer innovative solutions.
InsurTech can help make insurance products more accessible and affordable to customers. Due to these reasons, Germany is estimated to emerge as a lucrative market for embedded finance solution providers. As per FMI Germany market will thrive at 16.8% CAGR over the forecast period.
Principal Consultant
Better Features Offered by Embedded Payment Solutions Making Them Attractive to Consumers
As per Future Market Insights (FMI), embedded payment segment will continue to dominate the Europe market. This is due to various advantages of using embedded payments.
Embedded payment solutions offer a wide range of benefits to users, such as convenience, security, and cost savings. This makes them attractive to consumers, and therefore they hold a prominent share for the embedded finance market.
Embedded payment solutions also offer merchants and businesses the ability to integrate payment processing into their own systems, allowing for a seamless and secure customer experience.
Embedded payment solutions are often more secure than traditional payment methods, as they are less vulnerable to fraud and other security threats.
Finally, embedded payments are often cheaper for merchants, as they do not require additional hardware or software investments. They enable customers to skip routine checkout processes and simply pay with a single click. Therefore, the target segment will hold a market share of 34.9% in the type category by 2033.
Fintech Services to Remain Key Application Area of Embedded Finance
Based on application, fintech vendors segment will expand at a prolific CAGR of 17.1% through 2033 owing to the increasing demand for digital financial services and growing adoption of digital banking and payments.
Similarly, growth is driven by the increasing need for improved customer experience and convenience and rising popularity of mobile banking. The emergence of new technologies such as blockchain, artificial intelligence, and machine learning will also impact financial technology vendors segment.
The emergence of new payment methods such as contactless payments and the increasing demand for digital banking services will further boost fintech vendors segment.
Banks and financial institutions are the most dominant players in the European finance market, providing a wide range of services such as loans, deposits, payments, international money transfers, and investment services.
Insurance companies provide services such as life insurance, health insurance, property and casualty insurance, and annuities. Investment firms and venture capitalists provide funding for start-ups and other businesses in exchange for equity.
Private equity firms invest in companies and provide capital for expansion and restructuring. Asset managers provide portfolio management, investment advice, and trading services. Leading players in this sector include Blackrock, Fidelity Investments, and Vanguard.
Recent developments
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| Attribute | Details |
|---|---|
| Estimated Market Value (2023) | USD 24,230.9 million |
| Projected Market Value (2033) | USD 94,081.7 million |
| Anticipated Growth Rate (2023 to 2033) | 14.5% CAGR |
| Forecast Period | 2023 to 2033 |
| Historical Data Available for | 2018 to 2022 |
| Market Analysis | USD million for value |
| Key Countries Covered | Germany, Italy, France, United Kingdom, Spain, BENELUX, Nordics, Rest of Europe |
| Key Market Segments Covered | Type, Application, Country |
| Key Companies Profiled | Stripe Technology Europe; Finix; Liberis; Alviere; Railsbank Technology; Striga Technology OÜ; Plaid; Q2 Software, Inc; Modulr; Flywire; Marqeta; Solaris; OpenPayd; Tink |
The market in Europe is expected to be worth USD 24,230.9 million in 2023.
The market is forecast to expand at a CAGR of 14.5% through 2033.
The market is augmented by expanding e-commerce and robust penetration of digitalization.
The German market is expected to expand at a CAGR of 16.8% through 2033.
The embedded payment is the popular type of embedded finance in the market.
1. Executive Summary | Europe Embedded Finance Market 2. Market Overview 3. Key Market Trends 4. Pricing Analysis 5. Market Demand (Value in US$ million) Analysis 2018 to 2022 and Forecast, 2023 to 2033 6. Market Background 7. Market Analysis 2018 to 2022 and Forecast 2023 to 2033, by Type 7.1. Embedded Banking 7.2. Embedded Insurance 7.3. Embedded Investments 7.4. Embedded Lending 7.5. Embedded Payment 8. Market Analysis 2018 to 2022 and Forecast 2023 to 2033, by Application 8.1. Fintech Vendors 8.2. Travel & Hospitality Businesses 8.3. Real Estates 8.4. Transportation & Logistics Companies 8.5. Media Companies 8.6. Other 9. Market Analysis 2018 to 2022 and Forecast 2023 to 2033, by Country 10. Key Countries Analysis - Europe Embedded Finance Market 11. Market Structure Analysis 12. Competition Analysis 12.1. Stripe Technology Europe 12.2. Finix 12.3. Liberis 12.4. Alviere 12.5. Railsbank Technology 12.6. Striga Technology OÜ 12.7. Plaid 12.8. Q2 Software, Inc 12.9. Modulr 12.10. Flywire 12.11. Marqeta 12.12. Solaris 12.13. OpenPayd 12.14. Tink 13. Assumptions and Acronyms Used 14. Research Methodology
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Europe Embedded Finance Market
