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This is a breakdown of some of the latest trends and statistics in the rapidly growing field of embedded finance.
We'll cover everything from market trends to consumer behavior and adoption rates to give you a comprehensive view of embedded finance's current state and potential future.
While we can only predict the future, these numbers and trends will provide a comprehensive understanding of the opportunities and challenges in this dynamic industry.
Here's a short overview of the key data points for the embedded finance market to get started:
Top 2024 Embedded Finance Stats
● Global market value (2023): $83.32 billion
● Projected market value (2024):$107.27 billion
● CAGR (2024-2030): 32.8% to 53.71%
● Largest market share (2023): North America at 29.0%
● North America projected market revenue (2033): $89.1 billion
Embedded Finance Market Size and Growth
The global embedded finance market is experiencing significant growth and is expected to continue expanding rapidly in the coming years:
1. Market Size:
The market size was $83.32 billion in 2023, up from $58 billion in2022.
2. Growth Projections:
The market is projected to reach $107.27 billion in 2024, and an even more optimistic projection suggests it could reach$730.5 billion by 2032.
3. Compound Annual Growth Rate (CAGR):
The market is forecast to grow at a CAGR of 32.8% from 2024to 2030. Another estimate suggests a CAGR of over 29% between 2023 and 2032.Ultimately, this shows that the market is projected to grow steeply over the next decade.
4. Segment Growth:
The embedded payment segment generated around $27.3 billion in revenue in2022, with embedded lending expected to see significant growth, driving market expansion.
Key Embedded Finance Trends
1. Market Growth:
The embedded finance market is experiencing rapid expansion, with projections estimating growth from $63.2billion in 2023 to $291.3 billion by 2030-2033, at a CAGR of 16.5-32.8%.
2. B2B Market Expansion:
The B2B sector has significant growth potential, with the B2B payments market projected to reach $124 trillion by 2028.
3. Buy Now, Pay Later (BNPL):
BNPL services are gaining popularity in both B2C and B2B sectors, enhancing user experience and encouraging repeat purchases.
4. API Integration:
The development and use of APIs (Application Programming Interfaces) are booming, making it easier for companies to integrate financial services into their platforms.
5. Emerging Technologies:
AI and machine learning are being increasingly applied in embedded finance for risk assessments, fraud detection, and personalization of financial services.
6. Banking Partnerships:
Traditional banks are partnering with fintech companies to offer embedded finance solutions, creating new revenue streams and improving user experiences[3].
7. Expansion into New Sectors:
Embedded finance is spreading beyond retail and e-commerce into sectors like healthcare, investment services, and the gig economy.
8. Embedded Investing:
Platforms like Revolut, Venmo, and PayPal are offering in-app investment options, democratizing access to investment opportunities.
9. Real-time Payments:
The trend towards faster, real-time payment processing is growing in the embedded finance space.
10. B2B Solutions:
There's an increase in embedded finance solutions tailored specifically for B2B transactions, including invoice factoring and supply chain financing.
These trends highlight the rapid evolution and growing importance of embedded finance across various industries and sectors.
Embedded Finance Regional Trends
1. North America:
● North America dominated the embedded finance market with a 29.0% share in2023, up from a 32.5% share in 2022.
● The U.S. embedded finance market is expected to grow at a CAGR of 32.0% from 2024 to 2030. For context, it had a22.3% market share in 2022.
● The U.S. market is expected to grow at a CAGR of 16.1% between 2023 and 2033.
● North America is projected to reach a market revenue of $89.1 billion by 2033.
2. Europe:
● Europe held a 25.4% share of the embedded finance market in2024 in 2022 with germ any accounting for germ any accounted for 12.3% of the global market share.
● The United Kingdom is expected to grow at a CAGR of 15.3% between 2023 and 2033, reaching $10.5 billion by 2033.
3. Asia Pacific:
● China is the second-highestembedded finance growth market, with a projected CAGR of 15.8% and an estimated value of $17 billion by 2032.
● India is showing strong growth potential, with a projected CAGR of 19.5% between 2023 and 2033.
● Japan is estimated to reach $13.8billion by 2033, growing at a CAGR of 14.7% between 2023 and 2033.
4. Other Regions:
● Australia held 3.2% of the global embedded finance market share in 2022.
● While no study is available for Latin America and the Middle East and Africa (MEA), the market is expand in grapidly across developed and emerging economies, driven by technological advancements, changing consumer behaviors, and supportive regulatory environments.
Conclusion
Embedded finance is a rapidly evolving industry with significant potential for growth and opportunities for businesses and consumers.
However, it faces challenges such as data security and privacy concerns, regulatory compliance, and technical complexities.
As the industry continues to develop, it will be important for both businesses and regulators to strike a balance between innovation and regulation to drive responsible growth and ensure a seamless and secure experience for all stakeholders.
