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Embedded finance is transforming how companies integrate and deliver financial services. With the growth of digital commerce and demand for real-time payments, businesses seek agile, secure, and frictionless solutions to enhance user experience.
In this article, we explore the key trends shaping the future of embedded finance in 2025, from the expansion of cross-border payments to regulatory compliance, and how Inswitch is leading this shift with innovative and scalable solutions.
Here are some of the key factors shaping the future of embedded finance:
From the rise of real-time and cross-border payments to hyper-personalized financial products powered by data and technology, these are among the most important embedded finance trends in 2025, driving the integration of financial services across business platforms worldwide.
Inswitch is a comprehensive one-stop-shop solution that allows any company to become a fintech, without developing its own technology or relying on multiple vendors. Thanks to its modular platform, it supports digital transformation through embedded finance on a global scale.
In Latin America, demand for embedded finance solutions is growing, fueled by the region’s rapid digitalization. Industries such as digital banking, e-commerce, retail, and mobile apps are looking to integrate financial services into their operations to improve both user experience and operational efficiency.
The adoption of embedded finance solutions is booming, driven by the need to deliver more integrated and efficient financial experiences. This trend enables companies to optimize operations and deliver greater value to both their business and their customers.
The Banking as a Service (BaaS) market, which allows non-bank entities to offer financial services by leveraging bank infrastructure, is expected to reach US$2.29 billion in Latin America by 2025 and grow to US$3.21 billion by 2030, according to market research firm Mordor Intelligence.
The COVID-19 pandemic was a catalyst for many companies to transition to the digital space, prompting them to adopt online payment solutions to remain operational. Over time, the offering has diversified, allowing more industries to embed banking products into their business models.
The rise of fintech and the growing demand for digital banking services have been key to the consolidation of the Banking as a Service (BaaS) model. As traditional banking evolves, this model has become a valuable alternative for businesses seeking to offer financial solutions.
Even small and medium-sized companies are now embedding banking ‘software’ into their websites and apps to meet user expectations without redirecting them to third parties. With these tools, companies across sectors can integrate digital payments into their sites or even issue branded credit cards to boost customer loyalty.
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Embedded finance, for example, allows marketplace sellers to receive payments and manage their money through a digital wallet within the platform itself. In the case of apps that offer multiple services, embedded finance opens the door to features like digital wallets and branded cards.
According to financial institutions like BBVA, offering these services “used to require significant investment in resources, time, and technological development.” The arrival of APIs (Application Programming Interfaces) has simplified this process by acting as “a bridge between companies, customers, and banks.”
Behind this infrastructure is Inswitch, which provides the tools for any business to offer financial services without being a bank or a traditional financial institution. The company delivers a comprehensive, modular financial infrastructure designed to simplify complex processes and help businesses embed banking services seamlessly.
Its offering includes core banking, digital wallets, card issuing and processing, domestic and cross-border payments, and a funds-in/funds-out network integrated with banks, cards, and digital wallets. With a strong focus on security, compliance, and real-time transactions, Inswitch enables the expansion and digitalization of financial services.
Here are some of the key trends and innovations identified by Inswitch regarding embedded finance for 2025:
Among the broad range of innovations expected to gain momentum in 2025 are cross-border transactions, driven by remittances, remote workers, and other global flows, and real-time payments, which are increasingly seen as tools for promoting financial inclusion.
In 2025, demand for secure, agile, and efficient cross-border payments is expected to rise, as companies look for solutions that enable instant settlements, improve cash flow, lower costs through competitive fees, and ensure regulatory compliance across multiple markets.
This trend is being driven by the increase in remittances, which were estimated to total around US$161 billion in Latin America last year. According to the Inter-American Development Bank (IDB), this represents a 5% increase compared to 2023. In this context, Inswitch is a strategic partner for companies, offering the ability to process secure, real-time transactions in multiple currencies and markets.
Real-time transactions also present a valuable opportunity for the industry, especially as innovation accelerates in this space. Universal and interoperable payment systems such as Pix, developed by the Central Bank of Brazil (BCB), and CoDi, created by the Bank of Mexico to facilitate electronic transfers, are clear examples of adoption and impact in regions like Latin America.
According to a recent survey by Brazil’s Central Bank, Pix is now the most widely used payment method in the country, with 76.4% of Brazilians using it. This surpasses both debit cards and cash.
The main advantages of real-time payment systems include removing intermediaries, lowering transaction costs, and improving traceability. These benefits enhance security and transparency for users while also creating opportunities to develop new financial products such as digital wallets.
Real-time payment solutions are expected to gain even more traction in 2025 as more central banks adopt similar systems inspired by Brazil’s Pix. Meanwhile, private players continue launching their tools to meet market needs with real-time capabilities.
According to a blog post by the World Bank, the use of instant payments in Latin America has increased rapidly since 2019. In that time, usage has grown from nearly zero to more than 3 monthly transactions per capita in Peru, 12 in Costa Rica, and 24 in Brazil.
Hyperpersonalization in embedded finance will be a key factor in 2025, driving the creation of financial experiences tailored to the specific needs of each user. Solutions like digital wallets and custom card issuance allow companies to deliver more flexible financial products. The ability to launch physical and virtual cards with real-time controls and multi-currency support, as offered by Inswitch, creates an opportunity for companies to align their services with each customer’s profile.
In a highly competitive market where speed and accessibility make the difference, success will depend on understanding not just what users need but also when and how they need it. Companies that offer personalized financial solutions such as credit lines tailored to individual spending patterns or instant payments designed for emerging business models will gain a key advantage in 2025.
In this context, artificial intelligence becomes the foundation of hyperpersonalization. It enables real-time data analysis to anticipate needs and deliver accurate solutions. For example, a proptech startup could detect that a user has just purchased an apartment and offer immediate financing for renovations, along with discounts on construction materials and preferential interest rates. As customer expectations continue to evolve, companies that explore these technologies and adopt personalized approaches will be better positioned to strengthen user loyalty and build a long-term competitive advantage.
Integrating banking services into non-financial platforms presents challenges not only from a technological perspective but also from a regulatory one. Companies must keep pace with growing regulatory demands, invest in infrastructure to meet legal obligations, and choose the right embedded finance technology partners.
According to experts at consulting firm KPMG, “maintaining the integrity of risk requirements and compliance issues across the entire value chain is essential to avoid regulatory risks and difficult conversations with regulators.”
In a global environment marked by geopolitical tensions, analysts expect increased enforcement of anti-money laundering (AML) regulations and other key compliance measures. Many organizations, however, are not yet prepared to meet these obligations and face potential penalties. This includes financial institutions that have entered into bank sponsorship programs.
A survey conducted by fraud prevention software provider Alloy among U.S. financial institutions operating sponsorship programs found that 80% of them faced challenges in 2024 when trying to comply with embedded finance regulations. Among those surveyed, 20% cited reputational damage as the most serious consequence of compliance failures.
In this context, the same survey found that 94% of respondents plan to invest in new compliance technologies to help fintechs better manage their embedded financial partnerships.
According to Inswitch, security and regulatory compliance will be top priorities in the evolution of the digital financial ecosystem in 2025. Companies will need to implement advanced KYC/KYB protocols, AML tools to prevent fraud, and obtain the appropriate licenses to operate in key markets such as the United States and Latin America.
Automation and data analytics are becoming increasingly relevant in embedded finance, giving companies that embrace these solutions greater capacity to improve operational efficiency for both the business and end users.
According to a report by EY, artificial intelligence has practical applications in embedded finance. The firm explains that AI helps organizations make more informed decisions about integrated financial services, with direct impact in areas such as risk evaluation, credit scoring, and enhancing the customer experience.
By analyzing large volumes of data, AI can support e-commerce platforms in assessing credit scores and default risk when they plan to offer customer financing for the purchase of their own products.
These technologies are capable of processing multiple data sources to generate more accurate customer risk profiles, helping brands better determine key aspects such as credit capacity.
In conclusion, Inswitch believes that embedded finance will continue transforming the financial sector in 2025. The growth of real-time payments, the demand for more personalized experiences, the increasing regulatory requirements, and the strategic use of data will drive new ways of integrating financial services. Models such as BaaS and digital wallets will allow more companies to offer efficient financial solutions without building in-house systems. With digitalization accelerating, especially in Latin America, these tools are redefining the way banking and commerce operate by boosting efficiency and promoting financial inclusion on a global scale.
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