Embedded payment transaction value to reach $2.5trn by 2028

• Grow by 134% on 2024 value of $1.1trn
• Revenue to reach $228.6bn by 2028

PHILLIP ISAKPA IN LONDON, UK

The worldwide value of embedded payment transactions is set to grow by 134 percent and reach $2.5 trillion by 2028, new research by Juniper has shown.

Payment for goods and services is increasingly being done using apps and online platforms or integrated payments, which are now set to register very high numbers this year and up to 2028.

The study, produced by Juniper, which has expertise in fintech and payment, among other things, said this year alone will close with the value of embedded payment standing at $1.1 trillion.

The study found that A2A or Account-to-Account payments have become highly prevalent in recent years, and notes that they are being facilitated by the availability of one-click checkout options.

It also stated that the reduced cost of A2A payments versus cards for merchants, alongside instant payment processing, enables payments to be added to different eCommerce journeys and thus driving growth.

Also, the research found that embedded payments have become commonplace in usage and support due to improved cost and time efficiency completing transactions; facilitating 21 billion one-click checkout experiences in 2024.

This number is expected to increase, as more merchants support A2A payments, Juniper said in a statement made available to Business a.m.

Matthew Purnell, who wrote the research report, remarked: “Transparent instant payments embedded in checkouts reduces cart abandonment due to increased efficiency and consumer satisfaction; cementing a codependency between A2A and embedded payments. Therefore, A2A is a payment method embedded finance vendors must offer in the rapidly evolving payment landscape.”

The report also found that as the embedded finance market has matured, fintechs no longer solely provide embedded payments, as banks enter the fray.

It pointed to Goldman Sachs, a partnership formed to offer embedded payroll services and payments in software products.

“Banks, being trusted institutions offering embedded payments, legitimise embedded solutions, facilitating consumer trust. Consequently, fintechs must expand offerings to remain distinct from other vendors, whether by offering A2A payments, increasing B2B capabilities, or utilising multi-rail payment solutions.

With regards to revenue, the study forecast that embedded finance revenue will reach $228.6 billion by 2028, a total growth of 148 percent from a 2024 figure of $92.2 billion and a CAGR of 25.5 percent. 

“This increasing market maturity, and consumer confidence, supported by regulatory initiatives and greater acceptance, particularly within B2B use cases,” it stated.

It also found that new advances within embedded finance are driving growth within specific use cases, noting, for example, that multi-rail payments are becoming more prevalent, with embedded finance players like Balance and Marqeta aggregating numerous Open Banking APIs to enable more seamless and cheaper payments across scenarios such as bulk disbursements or cross-border payments. 

The study found that embedded insurance as a segment was experiencing a surge in adoption globally with it increasing by 125 percent from 2024-2028. “Offerings are increasingly available for many eCommerce platforms, with the convenience provided incentivising consumers to take out policies mid-checkout,” it further stated. 

It noted that Asian Pacific governments, including Singapore and Malaysia, have been promoting the uptake of digital insurance for consumer and commercial use, adding that the conveniences provided through embedded offerings will garner the segment significant growth across the region. 

“However, embedded insurance is still an uncommon offering from many leading vendors, despite the significant growth potential,” it stated.

According to the report three key trends have become noticeable in the embedded payment ecosystem. These are that multi-rail payments are becoming more prevalent; that traditional banks are beginning to enter the ecosystem; and that emerging technologies are starting to feature more in embedded financial offerings.

It explained that given the scope of payments being made on a global scale, with each country and region having its own respective payment rails, embedded finance companies have stepped up to enable seamless interoperability between payment rails, adding that this is being seen in the form of cross-border payments through embedded financial services, such as from major players like Balance or Marqeta.

Additionally, it noted that the use of multi-rail payments means that even more payment methods are acceptable for transactions, reducing the likelihood of cart abandonment within eCommerce contexts. A result of this has been the surge of various business models within the embedded finance ecosystem, including BNPL and digital wallets, both providing increased flexibility in purchasing through preferred methods. These are likely to rise in the coming years as embedded financial services become optimised and increasingly prevalent, in addition to becoming more normalised within society, especially in the case of BNPL, which is seeing increasing discussion of regulation across key markets. 

The study said another trend is that the past year has seen numerous traditional banks capitalising on the embedded finance market and it lists JPMorgan Chase and Goldman Sachs as recently forming partnerships with embedded finance fintechs Gusto and Modern Treasury respectively in order to offer banking customers the ability to embed payroll services, help companies add payments to products, and more. A similar partnership was seen with the UK’s NatWest partnering with a market leader for embedded finance, Vodeno.