3 steps to embed financing into your product or service

Access to financial services is crucial for small businesses, and many now expect financial tools embedded within the platforms they already use. If you’re looking to scale, increase revenue, and improve customer engagement, embedded financing could be the answer. In this article, we’ll outline three steps to successfully implement embedded finance in a way that benefits both your business and your customers.

Step 1: Assess your business's need for embedded financing

Before embedding finance into your product, you need a strategic approach. Not every embedded finance option will suit your business or customers. Here’s how to determine the best fit:

Identify your target market

Embedded finance covers a range of services, from embedded lending and capital products to payment processing and insurance. The right solution depends on who your customers are and their financial needs.

For example:

• Small businesses may need access to working capital to manage cash flow and growth.

• Consumers might benefit from embedded payments, BNPL (Buy Now, Pay Later), or insurance at checkout.

Analyze your product or service

Understanding how customers interact with your product will guide your financial service choices.

Consider:

• What financial needs arise at key touchpoints in your platform?

• How can embedded financing improve your customers’ experience?

Example: If your platform enables small businesses to process payments, offering a capital solution based on their transaction history could be a valuable addition. If you provide travel services, integrating insurance at checkout would enhance the customer experience.

Determine which financial features to embed

Once you’ve analyzed your customer needs, prioritize financial services that deliver the highest impact.

Factors to consider:

• Customer demand – Is this a service they truly need?

• Implementation feasibility – How easily can it be integrated?

• Revenue potential – Will it drive business growth?

Test and iterate based on user data to continuously refine and optimize your embedded finance offering.

It's important to prioritize the financial features that will have the biggest impact on your customers and your business. Consider the cost and feasibility of implementing each feature, as well as the potential ROI.

Finally, don't forget to test and iterate on your financial services offering. The data you collect from your embedded finance customers can allow you to continuously improve and optimize your offering, identifying new opportunities to serve them even more.

Step 2: Overcome common implementation challenges

While embedded finance offers substantial benefits, implementation comes with challenges. Addressing these early will streamline the process.

Scalability and flexibility

Your embedded finance partner should be able to scale as your customer base grows.

Key Considerations:

• Can your partner support businesses of all sizes?

• Do they have sufficient capital reserves to grow with demand?

• Is their infrastructure built for seamless expansion?

At Pipe, we serve small businesses from their first year up to mid-market enterprises, ensuring capital availability at every stage of growth.

Regulatory compliance

Financial services are subject to strict regulations, including:

• State financing disclosure laws (for lending products)

• Anti-money laundering (AML), OFAC & Know-Your-Customer (KYC) regulations

• Consumer protection laws (such as the Graham-Leach-Bliley Act)

Failure to comply with these regulations can result in significant penalties and reputational damage. Your financing partner should manage compliance for you, reducing the operational burden and ensuring adherence to legal requirements.

Regulatory disclosures and AML/OFAC checks are built into Pipe’s embedded capital, handling KYC and other processes automatically, so there’s no added burden on your team and no unnecessary friction for your customers.

Data security and privacy

Financial information is highly sensitive and valuable, making it a prime target for cyberattacks and other forms of fraud. Companies need to ensure that their security measures are robust and comply with applicable data security and privacy laws, such as the Graham Leach Bliley Act and various state privacy regulations.

To protect customer information:

• Implement strong encryption and secure data storage

• Clearly communicate privacy policies

• Work with a partner that has built-in compliance with industry regulations

Companies also need to communicate clearly with their customers about how their data is being used and protected. This requires transparency and trust-building measures, such as clear privacy policies and secure data storage practices.

Seamless integration with existing systems

Many businesses struggle with integrating financial services into their existing infrastructure. Solutions like API-based finance offerings make integration smoother and more efficient.

Best practices for a frictionless launch:

• Adopt a modular approach – Start with one financial product and expand gradually.

• Leverage APIs – Use pre-built APIs to integrate financial services without overhauling your entire system.

• Test before full deployment – A pilot launch allows you to assess customer response and refine the experience.

At Pipe, we offer a hosted pilot solution that lets partners launch embedded finance in just 1–2 weeks with no engineering effort, ensuring a fast, low-risk rollout.

Step 3: Choose the right embedded finance solution

Selecting the right embedded finance provider is key to long-term success.

Types of financial partners to consider

There are different types of embedded finance providers, including:

• Traditional banks – Offer a broad range of financial products but may lack agility.

• Specialized finance providers – Focus on specific embedded finance solutions.

• Fintech companies – More flexible, with modern tech and better engineering support.

Evaluate potential partners

Consider these factors when choosing your embedded finance partner:

Regulatory Compliance Support

Managing compliance can be a huge burden. Look for a partner who:

• Handles state and federal regulations on your behalf

• Provides built-in compliance solutions for AML, KYC, and OFAC checks

Tech & Engineering Support

A smooth integration process is critical. A good partner will:

• Offer pre-built APIs and customizable UI options

• Provide ongoing technical assistance

• Ensure a seamless user experience

At Pipe, our API simplifies integration, and we support full UI customization to match your platform’s branding.

Revenue & Growth Potential

The right partner doesn’t just provide capital—they help you grow. Compare how providers assist with:

• Customer acquisition and onboarding

• Marketing and sales support

• Ongoing optimization of financial offerings

The more customers you activate on your embedded finance offering, the greater the long-term revenue impact.

Conclusion

Embedded financing is a powerful tool that enhances customer experience, drives platform engagement, and increases revenue. By following these three steps—assessing your business needs, preparing for challenges, and choosing the right partner—you can integrate financial services seamlessly and start seeing the benefits immediately.

Looking for a turnkey embedded capital solution? Explore how Pipe’s embedded finance platform can help your business scale effortlessly.