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Welcome to Xchange by Money20/20 Middle East – where money meets ideas.
 

Bold thought

Embedded finance has already found its winning business model – most players just aren’t executing it well enough.

Snapshot

At first glance, embedded finance still looks messy. Beyond payments, adoption is uneven and margins are fragile. And a significant number of platforms are disappointed with uptake.

But if you look a little closer, you can see the model does work – it just needs to be executed with more discipline. 

Payments proved the template. Research from Boston Consulting Group shows that by 2025, more than half of relevant independent software vendors in North America were already offering embedded payments. Embedded payments deliver materially lower churn and repeatable monetisation when finance is woven directly into an existing, habitual workflow. 

The same dynamic is showing up elsewhere. McKinsey estimates embedded finance generated €20bn - €30bn in Europe in 2023 and has grown roughly three times faster than directly distributed lending over the past decade. Distribution (not product diversification) is doing the heavy lifting here. 

So why does it still feel underwhelming? Maybe because too many players have mistaken access for value. Offers are bolted on and incentives are misaligned. The result is that we have lots of embedded finance options – but very little embedded trust.

Voices

Founder:

“My key question actually, to everybody, is: do you see a future as a financial services company? Because I think that’s… the mindset you need to have when you start embedding financial products. If you don't really have that mindset… if you still see it as an add-on or a nice feature, I would often almost advise not to do it. Because payments is like an operational product with a revenue hat, right?” – Alexander Schoonkind (Co-Founder and CEO of Embed), on the Embedded Finance Review Podcast. 

Payments expert:

“It’s critical for a bank to first decide what role it wants to play in the embedded finance value chain.” – Jonathan Zell (Partner at McKinsey), quoted in The Financial Brand. 

Investor:

“In the not-too-distant future, nearly every company will derive a significant portion of its revenue from financial services.” – Angela Strange (General Partner at Andreessen Horowitz), from a company blog post. 

What to watch and do

• Watch: How embedded finance shifts from a feature to a business line – with a new focus on how deeply embedded products sit inside a workflow.
• Do: If you’re building an embedded finance product, design for moments that are truly important in the customer journey.
• Do: Make the economics work for everyone (platform, partner, and end user) or don’t ship at all. 

Further reading…

• Embedded finance: How banks and customer platforms are converging – McKinsey, 2024
• Moving Embedded Finance from Promise to Practice – Boston Consulting Group, 2025
• Middle East Embedded Finance Market Databook – Research and Markets, 2025 

What’s your perspective? 

In MENA, distribution is already strong. Platforms are scaling and embedded finance growth forecasts are robust. 

But growth alone won’t save weak models. The region’s real test is execution: turning workflow access into sustainable revenue without recreating the same friction and misalignment seen elsewhere. 

So we want your perspective. How can embedded finance providers and partners improve execution models – and what should they avoid? Open this newsletter on LinkedIn and tell us in the comments. 

We’ll see you back here next week.

Catch you next week,

The Money20/20 Middle East Team