Exploring the future of embedded finance: Insights from Luke Voiles and Hiroki Takeuchi at Web Summit

At the recent Web Summit in Lisbon, Pipe CEO Luke Voiles and Hiroki Takeuchi, CEO of GoCardless, shared their thoughts on the evolving world of embedded finance. In this Q&A session, they discuss what embedded finance means, how it’s transforming businesses, and their vision for the future of financial technology.

[You can also scroll to the bottom of this post to watch the video of the full conversation]

Q: What does embedded finance mean to you, and how has it developed at your respective companies?

Hiroki Takeuchi:

I think embedded finance, as a term, is something that means a lot of different things to different people. For us, the concept of financial services being embedded into people's day-to-day lives is really where we started. When we first started GoCardless, we actually initially launched the product with a partner. One of the things we quickly realized was that businesses didn’t want to think about payments on their own. They wanted it to be embedded in the software or processes they were already running daily.

One of the things that's always driven a big part of our success has been partnering with software providers to serve payments within the processes and experiences they are having on a day-to-day basis. Whether that’s sending a customer an invoice or signing up a customer to a new subscription, being embedded into that process has been key.

As fintech evolves, embedded finance is taking on new forms. We’re excited to be partnering with the team at Pipe to enable our merchants to get easier access to capital, which is another form of embedding financial services. Partnerships are a key part of what embedded finance means to me.

Luke Voiles:

My focus has been on small businesses for almost 10 years. Looking at small business pain points, the number one is always access to capital. Payments is one of the early leaders in embedded finance. I was at Intuit for a long time—about five years—and then I went to Square. Watching Intuit embed features like allowing customers to send invoices and get paid, we launched QuickBooks Capital, which now does $2.4 billion annually in loan volume to QuickBooks customers.

Companies like GoCardless enable instant bank-to-bank money movement for small businesses. Historically, lending was detached from the system—think OnDeck, Bluevine, or Funding Circle. Now, with truly embedded offerings, GoCardless can send anonymized data, allowing us to pre-approve customer bases. In just a few clicks, businesses can access capital, solving the number one pain point with a seamless experience and high customer satisfaction.

Hiroki Takeuchi: 

When we talk about embedding financial services, we’re solving big challenges like access to capital. Oftentimes, businesses aren’t even aware of what they can access. Historically, going to a bank was onerous, and many banks aren’t set up to cater to small businesses. The partnership between GoCardless and Pipe makes it easy. Pre-approved offers are surfaced within a merchant’s daily process, providing seamless, timely access to financial tools.

Luke Voiles: 

Yes, and it’s about reducing friction while staying compliant. Banks and traditional financial systems struggle to integrate seamlessly. Meanwhile, modern fintech platforms, through partnerships, offer near-instantaneous onboarding and access to services. Our focus at Pipe has always been to embed solutions where users naturally need them, enhancing efficiency and driving adoption.

Q: What are the key factors driving the implementation of embedded finance solutions?

Hiroki Takeuchi: 

Yeah, for us, as I mentioned earlier, payments aren’t something businesses think of as a standalone process—they’re part of a wider workflow. Our focus has always been on embedding payments as deeply as possible into how businesses already operate, making the experience seamless.

When it comes to our partnership with Pipe, it’s a bit different. We have about 100,000 small businesses using our platform. They love working with us because we help improve their cash flow, reduce late payments, and minimize the time and effort spent on admin. These are key problems we solve for them.

But, as Luke mentioned, access to capital remains a huge challenge for small businesses. Often, it’s not just about the ability to access capital but also about awareness. Many small businesses don’t realize what they’re eligible for. If they’re used to dealing with banks, it’s often a slow and cumbersome process.

The partnership with Pipe has been powerful because we can pre-approve businesses and surface their options directly within their workflow. For example, a business owner checking their customer payments or planning their cash flow can see a pre-approved offer to access capital with just a few clicks. It’s seamless and integrated into their daily operations, which is incredibly powerful.

Luke Voiles: 

I completely agree. What’s fascinating is how these integrations solve pain points. For instance, one of our partners serves vertical SaaS businesses for nail salons and hair salons. Another serves service-based businesses like electricians and plumbers.

When thinking about embedding solutions, we ask: What tasks are these customers completing daily in their software? For nail salons, it might be managing appointments, payments, or inventory. That’s when you look at where the need for capital arises—whether it’s paying payroll, covering a bill, or buying equipment. The idea is to present a pre-approved offer at that exact moment of need.

It creates a security blanket for small businesses. They know that access to capital is just a click away whenever they need it. This requires analyzing customer behavior and understanding their workflows. Sometimes, we even help our partners better understand their customer behavior through data analytics and tracking.

Q: How do you see trust in digital financial services evolving?

Hiroki Takeuchi:

Trust has come a long way. When we started GoCardless in 2011, businesses were skeptical of online financial providers. They preferred the familiarity of a physical bank branch. But over time, as digital platforms proved their reliability, that perception shifted.

Today, merchants are not only comfortable using digital services but are also open to recommendations from one digital provider to another. This trust in interconnected digital ecosystems has been a game-changer, enabling seamless partnerships like ours with Pipe.

Q: How do differences in regulation and customer behavior impact the implementation of embedded finance solutions across geos?

Hiroki Takeuchi:

Regulation plays a foundational role in fintech. While merchants may not see it as part of the value proposition, compliance is critical to enabling the service. For example, onboarding processes need to be seamless while meeting strict regulatory requirements.

Operating globally adds layers of complexity. For instance, you have to navigate regulations from UK regulators, European regulators, and even state-by-state regulations in the US. Solving these challenges in a compliant way while offering a great user experience is a competitive advantage in fintech.

Luke Voiles: 

Hiroki’s right. To expand internationally, fintech companies need a modular approach. For example, at Pipe, we use GoCardless as a backend partner for money movement. This eliminates the need to integrate directly with banks in multiple countries.

We’ve built an orchestration layer for onboarding and compliance. This allowed us to launch in the UK just six weeks after starting in the US. By swapping in local datasets and adapting to specific AML (Anti-Money Laundering) rules, we can scale quickly. It’s about being smart with modular systems and relying on trusted local partners to handle the complexities of reconciliation and compliance.

Q: How do you see embedded finance, user experience, and technology evolving?

Hiroki Takeuchi: 

Embedded finance is about making financial services available in the moment—whether on desktop software or augmented reality. The key is surfacing solutions when and where they’re needed. For example, when a business decides to invest in new equipment, having pre-approved financing embedded directly into that process makes a world of difference.

We’re still in the early stages of this trend, and there’s so much potential for growth.

Luke Voiles: 

I see two big trends: better data and changing interfaces.

On the data side, fintech has evolved from relying on tax returns and audited financial statements to leveraging real-time transaction data. With Pipe, we work with perfect cash flow data streams, allowing us to automate credit decisions 100%. As datasets become more comprehensive, risk-taking will improve significantly.

On the interface side, we’ve moved from paper statements to PDFs to dashboards in software like Square or QuickBooks. The future is about automating tasks entirely. AI agents, for example, could handle everything from booking appointments to taking payments automatically. This would free up time for small business owners to focus on their families and their passions.

Conclusion:

Embedded finance is transforming how businesses access and use financial services. Technology allows for fast, seamless delivery, and partnership between platforms puts access at the point of need, even across the globe. 

Here's the full discussion between Luke and Hiroki from Web Summit Lisbon, November 2024: