When I’m asked what I currently do and I introduce myself as leading embedded finance in a financial institution, I often get a puzzled look followed by, ‘What exactly is embedded finance?’ It’s a fair question. The term sounds techy and futuristic, but in reality, embedded finance is simple; it means integrating financial services directly into the products and platforms where customers already are. It’s about meeting customers where they transact.
Picture this: you’re on Jumia’s website, and you select a few items and add them to your shopping cart. When it’s time to pay, you’re not walking to a physical bank or ATM; you’re checking out right there on the site, using Paystack. That seamless experience is powered by embedded finance. Whether it’s payment, lending, savings, or insurance, embedded finance brings financial services into the customer’s natural journey.
Take another example. Ikenna is trying to buy a car. He visits a dealership or an online car platform. He sees the car he likes, but realises he doesn’t have enough funds. Right on the platform, he applies for financing and is approved. He also accesses insurance on the spot. That’s embedded finance – finance right when and where you need it.
A global glimpse at embedded finance
Globally, embedded finance is no longer a prediction; it’s a movement. According to McKinsey, embedded finance is projected to generate over $230 billion in revenue by 2025. Platforms like Shopify now offer working capital loans directly to merchants. Uber provides drivers with real-time earnings wallets. In India, ZestMoney enables BNPL on education and e-commerce platforms, while Brazil’s Nubank has embedded credit and insurance features in digital channels used by millions.
The embedded finance opportunity in Nigeria
In Nigeria, the opportunity is massive but still largely untapped. The market remains fragmented, with payment being the most mature form of embedded finance, thanks to players like Paystack, Flutterwave, OPay, Palmpay, and Moniepoint. However, other services like credit, insurance, and savings remain under-represented. We are seeing early signs; retailers like SLOT offer device financing, and platforms like Checkout by Credit Direct are plugged into e-commerce sites, but a fully integrated embedded finance ecosystem is yet to emerge.
With over 115 million active internet users and 40 million MSMEs, Nigeria presents fertile ground for embedded finance. The informal sector thrives on credit, yet less than 6 percent of the adult population accesses regulated credit. Embedded finance can bridge that gap by embedding credit, savings, and insurance directly into marketplaces, logistics platforms, health tech solutions, and community commerce tools like WhatsApp shops.
The path forward: Collaboration over competition
In Nigeria, we see embedded finance elements scattered across platforms, but a true embedded finance company, one that powers entire communities with end-to-end solutions, has not yet taken the lead. The future belongs to players who understand the importance of integration and collaboration. Embedded finance should not mean building everything in-house. It means building together.
Some companies will be infrastructure providers, offering APIs and banking-as-a-service layers. Others will focus on the customer experience, bringing relevant products to life at the point of need. What unites them all is the customer’s desire for ease, relevance, and instant access.
To win, players must plug into captive communities, understand their behaviours through data, and serve them with relevant financial tools, wallets, credit, savings, and insurance. Whether it’s a logistics fleet, a group of traders, or gig workers on a food delivery app, the future is about embedding services into ecosystems that already have trust and traction.
Conclusion: Embedded finance as Nigeria’s next big leap
Embedded finance is more than a buzzword; it’s a shift in how financial services will be delivered. With the rise of digital tools, open banking frameworks, and demand for financial inclusion, now is the time to build. True innovation will come from those who embrace collaboration, power access through infrastructure, and put the customer journey at the heart of every offering.
As BaaS (Banking as a Service) becomes more robust, it should enable embedded finance that reaches millions still outside formal finance. Let’s stop building silos and start building ecosystems. Embedded finance isn’t the future. It’s now, and Nigeria is ready.
Faith Ojeiku is an embedded finance enthusiast.
