Embedded finance is revolutionizing how small and medium-sized enterprises (SMEs) operate, grow, and compete. From payment processing to instant capital, integrated financial tools are helping SMEs solve persistent challenges and seize new opportunities. The recent podcast discussion between Nik Milanović (This Week in Fintech), Natalie Moreno Wexler (VP, Platform Offering Strategy, Adyen), and Jamey Kennedy (Jackrabbit Technologies) offered a inside view of how these changes are playing out on the ground—and why Adyen’s technology stack is helping to lead the way.

The Untapped Potential: $185 Billion Embedded Finance Opportunity

According to a 2024 Boston Consulting Group and Adyen report, about 80% of the massive $185 billion embedded finance market remains untapped, especially for SMEs. Over the past two years, the industry has grown 25%, showing how dramatic the transformation is for business owners who traditionally had limited access to effective, user-friendly financial products.

“What does that mean to us?” asked Wexler. “It means there is a huge market...that just doesn’t have the right products and services to take payments, to have the visibility into how they run their business, to have faster access to cash, to have easy reconciliation, and really just have like a one-stop shop to run their business.” Adyen’s approach targets this need directly: embedding financial services into SaaS platforms trusted by small businesses, making them easily accessible and all under one digital roof.

Solving Real SME Pain Points with Embedded Finance

The day-to-day realities for SME owners—juggling payments, managing reconciliation, coping with cash flow stress, and seeking growth capital—are rarely glamorous. But with embedded finance solutions, many headaches disappear.

Jamie Kennedy described, “We’ve effectively taken the entire terminology of cutoff time out of the vocabulary of our clients and all that headache... So that really has driven a lot of the initial adoption.” The impact is real—clients experience seamless, reconciled financial operations, and the benefits spread quickly via “self-evident value.”

Capital access has also proven transformative. Through Jackrabbit’s integration with Adyen’s capital product, SME clients like dance studios and gymnastics centers now finance planned expenditures—new equipment, facility upgrades, and even major periodic costs like dance floor replacements. Instant access to capital lets owners sidestep credit card max-outs or the frustrations of dealing with slow, traditional bank loans.

As Kennedy points out, “Now that capital is in place for them and they’re comfortable with it, it seems like everyone’s starting to think about their planned capital expenditure and utilizing possibly capital for that, almost marrying up a capital loan to a planned expenditure.”

Trust, Convenience, and Speed: Why SMEs Are Choosing Embedded Finance

The numbers tell the story: SME funding through software providers doubled in recent years, with 19% of SMB loans now coming from platforms (up from 9%). Forty percent of SMEs consider borrowing directly from their SaaS platform instead of their bank.

Why this shift? Trust and efficiency are key. SMEs already rely on platforms like Jackrabbit to run every part of their business operations. When payments and finance are seamlessly integrated into these trusted tools, business owners aren’t just saving time—they’re gaining access to enterprise-level technology, instant working capital, and banking-like services that are uniquely tailored to the nuances of their industry.

As Wexler emphasized, traditional banks often overlook or underserve SMEs, “tailoring [products] to much larger customers and...not really tailored to the needs of a small business owner.” Embedded finance, and especially Adyen’s approach, leverages existing payment and transaction data to make capital decisions fast and accurately, offering SMEs access to funds “in their bank in hours.”

The Adyen Advantage: End-to-End Solutions for Global and Local Needs

Adyen’s platform for platforms ensures that even the smallest businesses get access to the same powerful capabilities as large enterprise clients like Uber, McDonald’s, or LinkedIn—but with solutions tailored through SaaS partners who understand sector specifics. Jackrabbit’s experience as a partner illustrates this perfectly. As Kennedy recounts, “The entire process was extremely easy, and clients received funds typically the next day.” There have been zero support requests after launching embedded lending—proof of a frictionless, user-centric experience.

Moreover, Adyen’s global footprint and direct banking licenses across regions allow for agility, fewer points of failure, and full regulatory compliance—the backbone for long-term trust and operational stability.

Win-Win-Win: Benefits for SaaS Platforms, SMEs, and the Broader Economy

Embedded finance doesn’t just help SMEs. It also dramatically expands opportunities for software providers. According to the BCG report, SaaS platforms using embedded finance can grow revenues up to three or four times their current subscription income. Over half of platform revenues now stem from embedded payments and finance, while loyalty and retention rates soar—as platform users adopt multiple integrated products and become much less likely to churn.

Wexler refers to this as a “growth flywheel”—revenue, customer loyalty, and operational insights all reinforcing each other. Kennedy echoes this: "With capital, there does seem to be...once you extend a financial line of credit to a client, that's a significant consideration to move away from the provider...if there's one thing underestimated in the whole process, it's the value of convenience and the value of speed to fund."

Looking Ahead: Embedded Intelligence and the Future of SME Finance

The conversation also pointed to what’s next for SME finance—more automation, “agentic” payments, and AI-powered financial operations. Both Kennedy and Wexler expressed excitement about using digital mandates and AI features to anticipate cash flow gaps, automate reconciliation, and manage disputes efficiently. The goal: to “just make everyone’s lives easier—platforms as well as the users...so they can get back to business.”

As embedded finance fundamentally changes what’s possible for small and medium-sized businesses, owners can focus on running, growing, and investing in their dreams with less friction and greater confidence. With platforms, like Adyen, SMEs are no longer forced to settle for banking solutions that weren’t built for them—they’re now getting financial services designed for the way they actually do business. The winners? Platforms, providers, and above all, the millions of entrepreneurs powering our economies.