Embedded investing is the integration of investing functionality into non-financial products or services.
Interest in this technology is growing largely due to an increasing number of companies integrating embedded investment into their apps.
For example, Venmo and PayPal now allow users to invest in crypto and make deposits on trading platforms.
Elon Musk has also laid out his vision of turning X into an embedded finance company.
Additionally, several startups are launching end-to-end embedded investment solutions, making it easy for companies to integrate investing into their platforms.
Embedded investment is part of the Embedded Finance meta trend.
Search volume for “embedded finance” has grown by 966% over the past five years.
Embedded finance is an umbrella term that describes financial services integrated into existing platforms, often with a focus on providing convenience or added value to users.
Some VCs describe embedded finance as essentially “making every company a fintech company”.
Embedded insurance and embedded lending are examples of trending embedded finance tools.
Frequently Asked Question (FAQ)
Question: What is Embedded Investing?
Answer: Embedded Investing is a new concept that allows investors to invest in the stock market without leaving their favorite social media, payments, or retail platform. It provides platforms with a launchpad to seamlessly integrate stock market investing into their vertical offerings. This concept is designed to streamline financial processes for consumers, making it easier for them to access the services they need when they need them.
Question: How does Embedded Investing work?
Answer: Embedded Investing works by allowing investors to invest in the stock market without leaving their favorite social media, payments, or retail platform. It provides platforms with a launchpad to seamlessly integrate stock market investing into their vertical offerings. This concept allows investors to invest in the stock market without leaving their favorite social media, payments, or retail platform.
Question: What is embedded investing and how does it work?
Answer: Embedded investing is a concept that allows non-financial platforms or services to offer investing options to their users or customers. Embedded investing works by integrating investing features or functions into the existing user interface or experience of the platform or service, using application programming interfaces (APIs) or software development kits (SDKs). For example, a social media platform could allow its users to buy or sell stocks directly from their posts or profiles, without leaving the app or website.
Embedded investing is a term that refers to the integration of financial services and products into non-financial platforms, such as e-commerce, social media, or gaming. Embedded investing allows users to access investment opportunities and tools within the context of their existing online activities, without having to switch to a separate platform or app. For example, embedded investing could enable a user to buy fractional shares of a company while browsing its products on an e-commerce site, or to invest in a portfolio of cryptocurrencies while chatting with friends on a social media platform.
Question: What is the future of Embedded Investing?
Answer: The future of embedded investing is bright. With an estimated market value of over $138 billion in 2026, it’s clear that it’s not just a financial fad, it’s the future.
Question: How does Embedded Investing differ from traditional investing?
Answer: Embedded investing differs from traditional investing in that it allows investors to invest in the stock market without leaving their favorite social media, payments, or retail platform. It provides platforms with a launchpad to seamlessly integrate stock market investing into their vertical offerings.
Question: Who offers embedded investing?
Answer: Some major companies offering embedded investing include:
- Betterment and Wealthfront (robo-advisors) partner with employers for workplace retirement plans.
- Fidelity, Schwab, and Vanguard allow embedding robo-advisors into brokerage accounts.
- SoFi, Chime, and other neobanks offer investment portfolios directly within checking/savings accounts.
- Payroll/paycheck providers like PayActiv and Even embed investing into their paycheck platforms.
- Aggregator platforms like Anthropic enable any company to offer embedded investing options.
Question: What types of accounts can be used for embedded investing?
Answer: Embedded investing options generally utilize existing types of accounts, though the investments are managed by a separate advisor. Common account types include:
- Brokerage accounts
- Bank/checking accounts
- Employer-sponsored retirement plans like 401(k)s
- Health savings accounts (HSAs)
- College savings plans
- Custodial accounts
By leveraging these established accounts, embedded investing provides a turnkey solution for automated, long-term portfolio building.
Question: What types of accounts are best for embedded investing?
Answer: The most suitable account types for embedded investing strategies are those that are:
- Tax-advantaged like 401(k)s, IRAs, and HSAs to benefit from compound growth tax-deferred.
- Long-term in nature to align with buy-and-hold embedded portfolios.
- Automated to easily facilitate recurring contributions from paychecks or external transfers.
- Low-cost to minimize fees and maximize returns over time.
This makes workplace retirement plans, bank-based retirement accounts, and college savings plans (529s) particularly well-suited for the embedded model. Custodial accounts can also work for long-term goals like children’s education.
Question: Is embedded investing suitable for all investors?
Answer: While embedded investing removes barriers for many, it may not be suitable for every situation. It works best for investors seeking long-term, buy-and-hold strategies within tax-advantaged retirement accounts. Those needing more control over investment choices or frequent trading may prefer standalone brokerage accounts. Investors with complex needs may also benefit from a financial advisor’s personalized guidance. However, for most individuals, embedded options can meet their goals with low-cost, automated portfolios.
Question: What are the benefits of embedded investing for users or customers?
Answer: Embedded investing has several benefits for users or customers, such as:
- It is convenient and accessible, as it enables users or customers to invest in the stock market without switching to a different app or website, or opening a separate account or broker.
- It is personalized and relevant, as it allows users or customers to invest in the stocks that match their interests, preferences, or needs, based on the data or content of the platform or service.
- It is engaging and rewarding, as it creates a positive feedback loop between the platform or service and the investing activity, enhancing the user’s or customer’s satisfaction and loyalty.
Question: What are the benefits of embedded investing for investors?
Answer: Embedded investing has several benefits for investors, such as:
- It can save time and effort. Embedded investing can allow investors to access and manage their investments within the platform or service that they already use or trust, without having to switch to a separate app or website.
- It can provide more choices and opportunities. Embedded investing can expose investors to a wider range of investment products and strategies that suit their needs and preferences, such as stocks, ETFs, cryptocurrencies, ESG funds, etc.
- It can enhance the user experience and satisfaction. Embedded investing can offer investors a seamless and intuitive interface that integrates their financial goals with their lifestyle, interests, or values. It can also provide investors with personalized recommendations, insights, or feedback based on their data and behavior.
Question: What are the benefits of embedded investing for platforms or services?
Answer: Embedded investing has several benefits for platforms or services, such as:
- It is profitable and scalable, as it generates new revenue streams from commissions, fees, or subscriptions, and increases the user base and retention rate of the platform or service.
- It is innovative and competitive, as it differentiates the platform or service from its rivals and creates a unique value proposition for its users or customers.
- It is collaborative and compliant, as it leverages the expertise and infrastructure of third-party providers or partners that offer the embedded investing solutions, and adheres to the regulatory and security standards of the industry.
- It can increase customer retention and engagement. Embedded investing can help platforms or services to retain and engage their customers by providing them with more value-added features and benefits, such as financial education, rewards, or incentives.
- It can generate new revenue streams and growth. Embedded investing can enable platforms or services to monetize their customer base by earning commissions, fees, or subscriptions from their investment offerings. It can also help platforms or services to attract new customers or expand into new markets.
- It can improve customer trust and loyalty. Embedded investing can strengthen the relationship between platforms or services and their customers by offering them convenient and customized solutions that meet their financial needs and expectations.
Question: What are the challenges or risks of embedded investing?
Answer: Embedded investing also has some challenges or risks, such as:
- It is complex and costly, as it requires the platform or service to integrate and maintain the embedded investing solutions, and deal with potential technical issues or glitches that may affect the user’s or customer’s experience.
- It is volatile and uncertain, as it exposes the user’s or customer’s money to the fluctuations and fluctuations of the stock market, which may result in losses or dissatisfaction.
- It is ethical and legal, as it raises questions about the responsibility and liability of the platform or service for the user’s or customer’s investing decisions, outcomes, or disputes.
- Regulatory compliance and security. Embedded investing requires platforms or services to comply with various laws and regulations that govern the financial industry, such as KYC, AML, GDPR, etc. It also requires platforms or services to ensure the security and privacy of their customers’ data and funds from cyberattacks or fraud.
- Customer education and support. Embedded investing requires platforms or services to educate and support their customers on how to use their investment features and benefits effectively and responsibly. It also requires platforms or services to handle any issues or complaints that may arise from their customers’ investment activities.
- Technical integration and maintenance. Embedded investing requires platforms or services to integrate and maintain their fintech solutions with their existing systems and processes smoothly and efficiently. It also requires platforms or services to update and improve their fintech solutions regularly to keep up with the changing market conditions and customer demands.
Question: What are the risks of embedded investing?
Answer: As with any investment approach, embedded investing entails some risks to be aware of:
- Limited investment selection – Options may be more restricted than standalone brokers.
- Reliance on partners – If the bank/payroll provider relationship ends, so do investment services.
- Fees – While low-cost, embedded options still charge fees investors should understand.
- Liquidity – Withdrawing from tax-advantaged accounts like 401(k)s may incur penalties.
- Responsibilities – Clarity is needed on fiduciary duty between investor and partner firms.
Overall risks are generally low for well-diversified portfolios in tax-advantaged accounts. Communication is key to understand each partner’s role.
Question: What are the benefits and challenges of embedded investing for users and providers?
Answer: Embedded investing offers several benefits for users and providers, such as:
- Increased convenience and accessibility: Users can invest in a seamless and frictionless way, without having to leave their preferred online platforms or apps. Providers can reach new and diverse customers who may not have access to or interest in traditional financial services.
- Enhanced personalization and engagement: Users can invest in products and services that are relevant to their preferences, needs, and goals. Providers can offer tailored and customized solutions that match the user’s profile, behavior, and context.
- Improved financial literacy and inclusion: Users can learn about investing and financial concepts through gamified and interactive features, such as quizzes, rewards, or social sharing. Providers can educate and empower users to make informed and responsible financial decisions.
However, embedded investing also poses some challenges for users and providers, such as:
- Regulatory and compliance issues: Users and providers need to comply with the laws and regulations of different jurisdictions, which may vary depending on the type and nature of the embedded investing product or service. Providers also need to ensure the security and privacy of the user’s data and transactions.
- Operational and technical risks: Users and providers need to deal with the potential operational and technical failures or glitches that may affect the performance and reliability of the embedded investing product or service. Providers also need to integrate their systems and processes with multiple platforms and partners.
- Ethical and social concerns: Users and providers need to consider the ethical and social implications of embedded investing, such as the potential for manipulation, exploitation, or addiction. Providers also need to ensure the transparency and fairness of their embedded investing product or service.
Question: How do I start embedded investing?
Answer: To start embedded investing, you need to find a platform or service that offers embedded investing solutions that suit your needs and preferences. Some examples of platforms or services that offer embedded investing are Acorns, Robinhood, Stash, etc. You also need to follow some steps, such as:
- Sign up for an account with the platform or service that offers embedded investing.
- Link your bank account or payment method to your account.
- Choose your investing goals, risk tolerance, and strategy.
- Browse and select the stocks that you want to invest in.
- Buy or sell stocks directly from the platform or service.
Question: How do I choose the best embedded investing solution for me?
Answer: Choosing the best embedded investing solution for you depends on several factors, such as:
- The type and quality of the platform or service that offers the embedded investing solution, which affects its usability, reliability, and security.
- The type and cost of the embedded investing solution, which affects its features, functions, and fees.
- The type and performance of the stocks that are available for embedded investing, which affects their potential returns, risks, and diversification.
Some criteria that can help you choose the best embedded investing solution for you are:
- The ease and convenience of using the embedded investing solution, such as how fast and simple it is to sign up, link your account, and buy or sell stocks.
- The transparency and fairness of the embedded investing solution, such as how clear and reasonable are its terms, conditions, and charges.
- The variety and quality of the stocks that are offered by the embedded investing solution, such as how many and how relevant are they for your interests, preferences, or needs.
Question: How do I manage my embedded investing portfolio?
Answer: Managing your embedded investing portfolio involves monitoring and adjusting your investments according to your goals, risk tolerance, and market conditions. Some tips for managing your embedded investing portfolio are:
- Review your portfolio regularly and track its performance and progress.
- Rebalance your portfolio periodically and maintain your desired asset allocation and diversification.
- Adjust your portfolio accordingly and take advantage of market opportunities or challenges.
- Seek professional advice or guidance if needed and learn from experts or peers.
Question: How do I withdraw or transfer my embedded investing funds?
Answer: Withdrawing or transferring your embedded investing funds depends on the platform or service that offers the embedded investing solution, as they may have different policies and procedures for doing so. Generally, some steps for withdrawing or transferring your embedded investing funds are:
- Sell the stocks that you want to withdraw or transfer from your portfolio.
- Request a withdrawal or transfer of your funds from your account.
- Choose your preferred method and destination for receiving or sending your funds.
- Confirm and complete the transaction and wait for the processing time.
Question: What are the best practices or tips for embedded investing?
Answer: Some of the best practices or tips for embedded investing are:
- Do your research and educate yourself about the platform or service, the embedded investing solution, and the stocks that you want to invest in.
- Start small and invest only what you can afford to lose, as embedded investing involves risks and uncertainties.
- Diversify your portfolio and invest in a variety of stocks that have different characteristics and performance.
- Be patient and consistent and invest for the long term, as embedded investing requires time and discipline to achieve your goals.
Question: What are some examples of embedded investing products and services in the market?
Answer: Some examples of embedded investing products and services in the market are:
- Shopify Stockify: A feature that allows Shopify merchants to offer their customers the option to buy fractional shares of Shopify stock while shopping on their online stores.
- Robinhood Snacks: A daily newsletter and podcast that provides bite-sized and digestible financial news and insights to Robinhood users.
- Acorns Spend: A debit card that automatically rounds up every purchase and invests the spare change into a diversified portfolio of exchange-traded funds (ETFs).
- Public.com: A social investing platform that allows users to follow other investors, join communities, and share their trades and opinions on various stocks.
- Rally Rd.: A platform that allows users to invest in fractional ownership of rare and collectible assets, such as classic cars, sports memorabilia, or art.
- PayPal: : This is an online payment platform that allows its users to buy, sell, and hold cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, etc., within its app or website.
- Revolut: This is a digital banking platform that allows its users to invest in stocks, ETFs, cryptocurrencies, commodities, etc., as well as access other financial services, such as budgeting tools, savings accounts, insurance products, etc.
- Round-up Investments: Apps that round up everyday purchases to the nearest dollar and invest the spare change in diversified portfolios.
- Banking Apps: Banks offering customers the option to invest in stocks, ETFs, or other assets directly from their banking app.
- Retail Investment Platforms: Online retail platforms allowing users to invest in stocks or mutual funds while shopping or making transactions.
- Payment Apps: Payment apps that enable users to invest their balance or allocate funds to various investment options.
- Robo-Advisors: Robo-advisory platforms embedded within financial apps or websites, providing automated investment advice and portfolio management.
Question: How do I get started with Embedded Investing?
Answer: To get started with Embedded Investing, you will need to choose a platform that offers this service. Some popular platforms include Robinhood, Square Cash App, and PayPal. Once you have chosen a platform, you will need to create an account and link your bank account or credit card. You can then start investing in the stock market through the platform.
Question: Where can I find more information or support about embedded investing?
Answer: There are some resources that can provide more information or support about embedded investing, such as:
- The official website or blog of the platform or service that offers the embedded investing solution, which may contain FAQs, tutorials, guides, or tips on how to use the solution.
- The online community or forum of the platform or service that offers the embedded investing solution, which may contain reviews, testimonials, or questions from other users or customers on how to use the solution.
- The customer service or support team of the platform or service that offers the embedded investing solution, which may provide assistance, advice, or solutions on how to use the solution.
Question: What are some tips for successful Embedded Investing?
Answer: Some tips for successful Embedded Investing include doing your research before investing, diversifying your portfolio, setting realistic goals and expectations, monitoring your investments regularly but not obsessively, and avoiding emotional decisions.
Question: What are some common myths about Embedded Investing?
Answer: Some common myths about Embedded Investing include that it is only for millennials or younger generations, it is only for small investments, it is too risky, it is too complicated, etc. However, these myths are not true as Embedded Investing provides investors with more options and flexibility in terms of where and how they invest.
Question: How much money do I need to start investing through an Embedded Investment platform?
Answer: The amount of money you need to start investing through an Embedded Investment platform varies depending on the platform you choose. Some platforms allow you to start investing with as little as $1 while others require a minimum investment of $100 or more.
Question: Can I lose money through Embedded Investing?
Answer: Yes, you can lose money through Embedded Investing just like any other investment. It is important to do your research and understand the risks associated with any investment before investing.
Question: Is Embedded Investing right for me?
Answer: Whether or not Embedded Investing is right for you depends on your individual financial situation and investment goals. It is important to do your research and understand the risks associated with any investment before investing.
Question: Is embedded investing the right approach for me?
Answer: To determine if embedded investing is a good fit, consider your:
- Investment timeline – Best for goals 5+ years away to benefit from market ups and downs.
- Preferences – Set it and forget it or more hands-on portfolio management style?
- Account types – Do you have tax-advantaged accounts that can be used?
- Needs – Simple, low-cost option or require personalized financial planning?
- Situation – Comfort with partner firms managing investments for you long-term.
For many, embedded investing provides an accessible starting point. But evaluate if standalone options may better suit your specific circumstances. An initial consultation with a financial advisor can also help ensure the best approach.
Question: Is embedded investing suitable for beginners?
Answer: Yes, embedded investing can be suitable for beginners, as it often provides user-friendly interfaces and simplified investment options. Many platforms offer educational resources and guidance to help beginners make informed investment decisions. However, it’s essential for beginners to conduct research, understand their risk tolerance, and start with investments aligned with their financial goals.
Question: Can I use embedded investing alongside traditional investment accounts?
Answer: Yes, users can use embedded investing alongside traditional investment accounts. Embedded investing is designed to complement traditional investing and provides an additional avenue for managing investments. Users can diversify their investment portfolio by using both approaches, depending on their preferences and goals.
Question: What fees are associated with embedded investing?
Answer: The fees associated with embedded investing can vary depending on the platform or service provider. Common fees may include management fees, transaction fees, and expense ratios for specific investment products. Users should review the fee structure of their chosen embedded investing platform to understand the costs associated with their investments.
Question: How do I get started with embedded investing?
Answer: To get started with embedded investing, follow these steps:
- Choose a Platform: Select an embedded investing platform or service that aligns with your financial goals and preferences.
- Sign Up: Create an account on the chosen platform, providing the required personal and financial information.
- Fund Your Account: Deposit funds into your embedded investing account using the available funding methods.
- Explore Investment Options: Browse the available investment options, including stocks, ETFs, or other assets.
- Make Investments: Select the investments you want to make and specify the amount you wish to invest.
- Monitor Your Portfolio: Keep track of your investments, monitor performance, and consider making adjustments as needed.
- Continue Learning: Stay informed about investment trends, strategies, and market developments to make informed decisions.
Remember that the specific steps may vary depending on the embedded investing platform you choose, so it’s important to follow the platform’s instructions and guidelines.
Question: Is embedded investing secure?
Answer: Embedded investing platforms prioritize security to protect users’ financial information and investments. They typically employ robust security measures, including encryption, multi-factor authentication, and compliance with industry regulations. However, it is important for users to ensure that they are using reputable platforms and follow best practices for online security, such as using strong passwords and keeping their devices updated and protected.
Question: What types of investments can be made through embedded investing?
Answer: The types of investments available through embedded investing platforms can vary. They may offer a range of investment options, including stocks, bonds, ETFs (exchange-traded funds), mutual funds, or even alternative investments like cryptocurrencies. The specific investment options will depend on the partnerships and services offered by the embedded investing platform.
Question: Can I use embedded investing for retirement planning?
Answer: Yes, embedded investing platforms may offer options for retirement planning, such as individual retirement accounts (IRAs) or access to retirement-focused investment portfolios. These platforms may provide tools and resources to help users plan for their retirement goals and invest accordingly. However, it’s important to carefully review the features and offerings of the specific embedded investing platform to ensure it aligns with your retirement planning needs.
Question: Are there any fees associated with embedded investing?
Answer: Embedded investing platforms may charge fees for certain services or investment transactions, similar to traditional investment platforms. These fees can include account management fees, transaction fees, or expense ratios for investment products. It’s important to review the fee schedule of the specific platform to understand the costs associated with using their services.
Question: Can embedded investing platforms provide investment advice?
Answer: Some embedded investing platforms may offer investment advice or access to automated investment advisory services, commonly known as robo-advisors. These services typically use algorithms and user-provided information to provide personalized investment recommendations. However, the level of investment advice and guidance can vary, so it’s important to understand the specific offerings of the embedded investing platform you are using.
Question: Can I transfer my existing investments to an embedded investing platform?
Answer: In some cases, it may be possible to transfer existing investments to an embedded investing platform. However, this will depend on the platform’s capabilities and partnerships. It’s recommended to review the transfer process and any associated fees or restrictions before initiating a transfer. Consulting with a financial advisor may also be beneficial to understand the potential implications of transferring investments.
Question: Can I use embedded investing platforms for day trading or active trading?
Answer: Embedded investing platforms are generally designed to provide long-term investment opportunities and may not be suitable for day trading or active trading strategies. These platforms typically cater to investors looking for diversified portfolios and long-term investment goals. If you are interested in day trading or active trading, it’s recommended to explore platforms specifically designed for those strategies.