(MENAFN- GlobeNewsWire - Nasdaq) India's embedded finance market growth is driven by trends in contextual finance, platform integrations, and consumer demand across credit, insurance, payments, and investments. Opportunities include expanding embedded credit in e-commerce and B2B, integrating insurance into digital platforms, and leveraging infrastructure enablers. Regulatory shifts and partnerships are key growth factors.Dublin, Nov. 20, 2025 (GLOBE NEWSWIRE) -- The "India Embedded Finance Market Size & Forecast by Value and Volume Across 100+ KPIs by Business Models, Distribution Models, End-Use Sectors, and Key Verticals (Payments, Lending, Insurance, Banking, Wealth) - Databook Q4 2025 Update" report has been added to ResearchAndMarkets's offering.
The embedded finance market in India is expected to grow by 12.4% on an annual basis to reach US$24.03 billion by 2025. The embedded finance market in the country has experienced robust growth during 2021-2025, achieving a CAGR of 17.8%. This upward trajectory is expected to continue, with the market forecast to grow at a CAGR of 8.8% from 2026 to 2030. By the end of 2030, the embedded finance market is projected to expand from its 2024 value of US$21.38 billion to approximately US$33.69 billion.
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Embedded finance in India is being shaped by a diverse set of trends spanning credit, insurance, payments, investments, and infrastructure layers. These trends are driven by regulatory shifts, consumer demand for contextual finance, and platform-led distribution.
India's embedded finance competitive landscape is defined by high vertical specialization, growing infrastructure consolidation, and a realignment around regulatory compliance. While platform-led distribution is becoming the norm, the backend is consolidating among a few BaaS enablers and regulated lenders. Over the next 2-4 years, the market is expected to see both increased fragmentation at the consumer interface and consolidation at the infrastructure and compliance layers. Strategic partnerships particularly those between banks/NBFCs and tech platforms will remain the dominant mode of expansion, but long-term sustainability will be determined by regulatory adaptability and infrastructure depth.
Embedded Credit Offerings Are Scaling Across B2B and Consumer Platforms
Embedded credit is rapidly gaining traction in both B2C and B2B ecosystems in India, with credit products being directly integrated into e-commerce, SaaS, and merchant platforms. Platforms such as Flipkart, Amazon, and Ola continue embedding pay-later and EMI options at checkout, while B2B platforms like Of Business and Udaan offer working capital finance directly within their procurement workflows. These models enable credit to become a contextual offering, improving both conversion and ticket size. India's low formal credit penetration, especially among small businesses and new-to-credit consumers, has created a gap that embedded credit models can fill. Regulatory developments, such as RBI's 2022 guidelines restricting prepaid instruments for credit disbursal, have led fintechs to partner with NBFCs to offer compliant models. Additionally, platforms possess transaction-level data which helps underwriting alternative risk profiles more effectively than traditional credit bureaus. Embedded credit is expected to intensify, with deeper NBFC-platform integrations and broader use of account aggregators for consent-based data sharing. Large banks may also increase participation to counter fintech scale, as seen with HDFC Bank's integration into Paytm's credit stack. However, regulation will remain a gating factor for growth in high-risk segments.
Embedded Insurance Is Emerging Through Sector-Specific Integrations
Insurance is being integrated directly into customer journeys across travel, mobility, gig work, and e-commerce platforms. Companies such as Ola, Zomato, and MakeMyTrip offer embedded insurance products like trip cover, personal accident, and device insurance through tie-ups with insurers like Acko and ICICI Lombard. These products are increasingly bundled into the checkout flow. Rising digital adoption and a large uninsured population make embedded insurance a viable route to scale micro-insurance products. The Insurance Regulatory and Development Authority of India (IRDAI) has also relaxed norms to encourage bundled products and partnerships between insurers and digital platforms. Additionally, low-cost API-based policy issuance and claims management have enabled rapid integrations. Growth is expected to stabilize as more platforms integrate niche products beyond basic covers such as crop insurance in agri-tech apps or health micro-covers in wellness apps. However, IRDAI's sandbox approvals and evolving commission structures will influence the scalability of newer partnerships.
Embedded Payments Are Evolving Beyond Checkout Integration
While embedded payments initially focused on simplifying checkout via UPI, cards, and wallets, the model has now expanded to include subscription billing, context-aware payments, and loyalty integrations. Platforms such as Swiggy and Zepto are embedding rewards-based payment flows, while SaaS players like Razorpay and Cashfree offer plug-and-play embedded payment infrastructure for developers. The rapid rise of UPI accounting for over 75% of all retail digital payments in India as well as RBI's push for interoperability via UPI Lite and UPI Credit Line pilots are expanding the canvas for embedded payment models. Additionally, merchant demand for customized payment journeys is pushing providers to move beyond basic integration towards white-label and workflow-native solutions. The embedded payments space will continue to diversify, especially in subscription-led segments such as OTT, D2C brands, and online learning. Players like PhonePe are also investing in infrastructure layers like Switch to support full-stack merchant enablement. Regulatory focus on consumer protection in recurring transactions may impose some compliance costs but will likely not impede growth.
Platform-Embedded Investment Offerings Are in a Nascent but Rising Phase
Investment products such as mutual funds, gold savings, and digital SIPs are being embedded into super apps, fintech wallets, and neobanking interfaces. Platforms like Groww, Zerodha, and Paytm Money have integrated equity and SIP offerings within broader app ecosystems, while startups like Jar and Kuvera are embedding micro-investments into daily spends or savings routines. India's increasing financialization, rising mobile investing, and high demand for small-ticket, goal-based investment products are key drivers. The emergence of Account Aggregator and Open Credit Enablement Network (OCEN) infrastructure also allows embedded investment journeys to be more customized and compliant. Additionally, SEBI's recent relaxation on platform commissions for direct plans may accelerate participation. Embedded investing is likely to grow in Tier-2 and Tier-3 cities as platforms bundle wealth journeys into banking and payment interfaces. Regulatory scrutiny around mis-selling may trigger stricter guidelines, but modular, plug-in investment APIs will become more prevalent across banking-as-a-service (BaaS) platforms.
Embedded Finance Is Increasingly Driven by Infrastructure Enablers
Infrastructure-as-a-service models are enabling embedded finance by offering APIs for banking, credit, KYC, underwriting, and collections. Players like Setu (now acquired by Pine Labs), Decentro, M2P Fintech, and Perfios are powering integrations for platforms across lending, insurance, and investments. These enablers abstract the compliance and technical complexity for partners. The growth of the fintech ecosystem in India and regulatory expectations around compliance have created strong demand for backend orchestration. Open banking frameworks such as AA (Account Aggregator) and DEPA (Data Empowerment and Protection Architecture) are creating new rails for embedded finance, which infrastructure providers are leveraging. Demand is highest among startups and non-fintech platforms looking to offer embedded finance without building from scratch. Infrastructure providers will expand horizontally moving into fraud prevention, collections, and even co-lending orchestration. Consolidation is expected as large players (e.g., Pine Labs, Razorpay) acquire niche enablers to offer full-stack embedded finance suites. The availability of standardized APIs will lower entry barriers and accelerate time-to-market for new embedded use cases.
Competitive Intensity Is High Across Verticals, But Varies by Segment Maturity
India's embedded finance ecosystem has become highly competitive, with activity spanning lending, payments, insurance, and wealth. While the payments and credit segments are relatively mature with entrenched players and defined regulatory pathways, insurance and investment embedding remain nascent with fewer scaled partnerships. Competition is strongest in embedded credit, where fintechs, NBFCs, and BaaS providers are aggressively targeting merchant and platform integrations. Multiple ecosystem enablers such as Open Credit Enablement Network (OCEN), Account Aggregator, and Aadhaar-based KYC have lowered the barriers to entry, enabling new players to offer embedded financial services. Additionally, platforms across e-commerce, mobility, SaaS, and logistics are embedding finance to improve retention, monetization, and transaction stickiness. This is fostering both vertical and horizontal competition, with infrastructure players expanding their role as aggregators. Competitive intensity is expected to rise further, particularly in B2B credit and insurance, as new partnerships proliferate and regulations create room for compliant innovation. However, consolidation is likely in infrastructure and mid-market lending, where unit economics are under pressure and compliance requirements are growing.
Key Players Span Across Consumer Platforms, BaaS Enablers, and NBFC-Fintech Partnerships
India's embedded finance landscape includes platform-led players (e.g., Amazon Pay, Flipkart, Ola, Swiggy), BaaS infrastructure providers (e.g., M2P Fintech, Decentro, Setu), and regulated financial entities (e.g., HDFC Bank, ICICI Bank, KreditBee, Tata Capital). Fintechs like ZestMoney (pre-exit), Simpl, and LazyPay had earlier dominated consumer BNPL, though many have since pivoted or exited due to RBI's regulatory tightening. Banks and NBFCs are increasingly embedding offerings into partner ecosystems rather than building direct D2C channels. For example, ICICI Bank and HDFC Bank provide pay-later and EMI services integrated into platforms like Paytm and Amazon. Infrastructure players like Setu (acquired by Pine Labs) and Decentro offer plug-and-play APIs for KYC, credit, and payments, enabling faster go-to-market for new entrants. The market will continue to diversify, with traditional banks focusing on co-lending models via embedded channels, and infrastructure providers consolidating into larger suites. Platform-led finance (e.g., embedded credit or insurance within Ola, Zepto, etc.) will gain scale due to high-frequency usage and captive customer data.
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