Measuring the success of integrated financial tools within retail once revolved around a straightforward calculation of dollars and cents, but today’s most forward-thinking businesses are tracking a far more sophisticated and strategic set of returns. The conversation around embedded finance has fundamentally matured, moving beyond its initial promise of boosting conversion rates to address a more complex and vital objective. It is now centered on cultivating strategic control, ensuring operational resilience, and solidifying customer centricity as the bedrock of modern commerce.
This article examines this pivotal shift, exploring how retailers measure the success of embedded finance through a new value framework. The central question is no longer whether to adopt these technologies but how to leverage them for lasting competitive advantage. In a mature landscape where financial tools are deeply woven into the customer experience, what constitutes a valuable return is being completely redefined, prioritizing long-term stability and governance over immediate transactional gains.
Beyond Revenue: The Shift to a Strategic Value Framework
The perception of embedded finance has evolved dramatically from its origins as a simple checkout convenience. Initially adopted as a tactical tool to reduce cart abandonment or offer basic point-of-sale credit, it is now widely recognized as a foundational component of the retail ecosystem. For many large retailers, it is a nearly ubiquitous technology that underpins the entire customer journey, from initial discovery to post-purchase engagement and loyalty.
This research captures a critical moment in this evolution, a point where experimentation has given way to strategic integration. Retailers are no longer just testing the waters; they are building their core operations on embedded finance infrastructure. This shift empowers them to dictate their own operational tempo, proactively manage emerging risks, and, most importantly, own the customer relationship in its entirety. Consequently, the metrics for success have had to evolve in lockstep with these new strategic imperatives.
The Evolution from Checkout Feature to Core Infrastructure
Embedded finance has transformed from a tactical enhancement into a strategic necessity. Its initial role was often limited to offering payment alternatives at the point of sale, a valuable but narrow application. Now, however, it serves as the underlying architecture for a holistic commerce system, influencing everything from how customers pay to how a firm manages its risk profile and the speed at which it can bring new products to market.
This transition reflects a broader understanding that the customer journey does not end at checkout. Integrated payments, digital wallets, and lending options are still foundational, but they are now viewed as part of a larger ecosystem. Retailers are leveraging embedded finance to gain direct oversight of critical touchpoints, including payments data, loyalty programs, and credit offerings, which were often previously managed by external partners. This direct control is invaluable in a market where consumers demand seamless, secure, and integrated experiences.
Research Methodology, Findings, and Implications
Methodology
The insights presented here are derived from the “Retailers Expand Embedded Finance to Unlock Control and Customization” report, a November study conducted by PYMNTS Intelligence in collaboration with Marqeta. This research provides a direct window into the current state of embedded finance strategy within the retail sector.
The study surveyed the heads of payments at 37 U.S. retailers and commerce platforms, organizations at the forefront of implementing these technologies. The primary objective was to understand their current strategies, identify their most pressing challenges, and map out their future priorities, offering a clear picture of how industry leaders are navigating this evolving landscape.
Findings
The research reveals a decisive move away from traditional financial metrics. A striking data point shows that only 11% of retailers now cite conventional return on investment (ROI) as their primary success metric for embedded finance initiatives. This indicates a profound realignment of priorities toward more strategic, long-term objectives that bolster the entire enterprise. In place of ROI, new benchmarks for success have emerged that center on governance and customer trust. These include the effectiveness of fraud management systems, the agility to adapt to shifting regulatory landscapes, the robust protection of sensitive consumer data, and the overall quality of the customer experience. Over 80% of retailers confirm that embedded finance significantly enhances the customer journey, while 68% report substantial operational efficiency gains, such as accelerated product launches and better internal coordination. A dominant theme is the challenge of compliance, which was identified as a major concern by 88% of all retailers and 100% of those offering subscription-based services.
Implications
These findings imply that retailers are consciously prioritizing long-term, sustainable growth and operational robustness over immediate, short-term financial returns. The focus on fraud management and regulatory compliance demonstrates a commitment to building a resilient and trustworthy commerce ecosystem, which is now seen as the key to durable customer relationships and brand loyalty. Success in the modern embedded finance landscape requires a holistic, cross-functional approach that dissolves traditional organizational silos. Payments, compliance, product, and marketing teams must work in close collaboration to deliver a cohesive and secure customer experience. Moreover, the strategic selection of technology partners with proven security and compliance architectures is no longer just an IT decision but a core competitive differentiator that can either accelerate or inhibit a retailer’s strategic ambitions.
Reflection and Future Directions
Reflection
The research highlights a key divergence in strategy based on company size and market position. Smaller firms, defined as those with annual revenues under $750 million, are more likely to leverage embedded finance as a powerful tool to close the competitive gap with larger rivals. For them, it is a pathway to offering sophisticated services and experiences that were once the exclusive domain of market leaders.
In contrast, billion-dollar corporations, having already achieved scale, are more intensely focused on fortifying their market position through enhanced risk management and regulatory rigor. Despite these different strategic priorities, the management of fraud and compliance stands out as a universal and non-negotiable concern. This shared challenge cuts across all market segments and use cases, from digital wallets and lending to payouts and co-branded cards, uniting all players in a common quest for security and stability.
Future Directions
As retailers continue to deepen their reliance on embedded finance, future research should investigate the specific partnership models and technological architectures that best enable them to balance innovation with rigorous control. Understanding the trade-offs between different solutions and vendor relationships will be critical for making informed strategic decisions in the years ahead.
Furthermore, additional exploration is needed to quantify the long-term impact of this strategic shift on key business outcomes. While the immediate operational benefits are clear, future studies should aim to measure the direct effects on metrics such as customer lifetime value, brand loyalty, and market share. This will help create a more comprehensive business case for investing in a control-oriented embedded finance strategy.
The New ROI: A Synthesis of Control, Resilience, and Trust
In conclusion, the return on investment for embedded finance was fundamentally redefined. It was no longer a simple calculation of revenue generated but a comprehensive measure of a retailer’s ability to architect a secure, flexible, and resilient commerce ecosystem that could withstand market complexities and regulatory pressures.
The ultimate return was found in achieving a strategic equilibrium that balanced growth opportunities with the non-negotiable control necessary for robust risk management, data security, and regulatory adherence. This synthesis of control, resilience, and trust became the new, and far more valuable, definition of success in a competitive and highly regulated landscape.