Fintech as a Service Market Outlook:
Fintech as a Service (FaaS) Market size was valued at USD 360.7 billion in 2024 and is likely to reach USD 2.96 trillion by 2037, rising at a CAGR of 17.5% during the forecast period, i.e., between 2025-2037. In 2025, the industry size of fintech as a service is estimated at 414.2 billion.
The expansion of open banking APIs and Banking-as-a-Service (BaaS) platforms has emerged as a vital factor contributing to the growth of the FaaS sector. The competitiveness of the market can be ascertained with Visa’s acquisition of Pismo in 2024 for USD 1 billion. The market’s economic indicator can be analyzed via changes in the Producer Price Index (PPI). For instance, in early 2025, the PPI for final demand increased by 0.3% in January. Additionally, the Business Loans Partial PPI, which is a proxy for credit-related cost components, has declined by 6.6% YoY by the end of January 2025. The decline is attributed to the easing of funding costs in the fintech credit supply pipeline.
The table below highlights the investment trends that have positively reinforced the market:
|
Category |
Metric |
Value |
Period |
|---|---|---|---|
|
Capital Goods Exports |
Total Value |
$2.07 trillion |
2024 |
|
YoY Increase |
+$40 billion |
2024 vs 2023 |
|
|
Semiconductor Imports |
YoY Increase |
+$9.4 billion |
2024 |
|
Total Exports (Goods + Services) |
Combined |
$269.0 billion |
Jan 2025 |
|
Services Export Growth |
+$0.7 billion |
Jan 2025 |
|
|
Financial Services Growth |
+$0.3 billion |
Jan 2025 |
|
|
Total Imports (Goods + Services) |
Combined |
$401.4 billion |
Jan 2025 |
|
Trade Deficit |
Goods + Services |
$156.9 billion |
Jan 2025 |
|
Financial Services Exports |
Quarterly Value |
$271.2 billion |
Q1 2024 |
|
Financial Services Imports |
Quarterly Value |
$197.5 billion |
Q1 2024 |
|
Financial Services Trade Surplus |
Net Surplus |
$73.3 billion |
Q1 2024 |
The global market is also estimated to maintain its growth due to the rising investments in fintech-related technologies. The falling credit costs and stable input pricing have provided conducive conditions for CapEx. Additionally, the substantial investment in digital infrastructure is poised to ensure growth in the FaaS ecosystem’s improvement by the end of 2037.
Fintech as a Service Market - Growth Drivers and Challenges
Growth Drivers
- Rapid expansion of the instant payments infrastructure: Due to the rapid growth of the national-scale real-time payment systems, the market has maintained robust growth. For instance, in rapidly emerging markets in India, the Unified Payments Interface (UPI) has experienced large-scale adoption through sustained government support. By the end of 2025, more than USD 18.0 billion transactions were reported in India via UPI, with around 7,000 transactions reported per second. The surge in data generation has created ample opportunities for FaaS deployment in emerging economies that are embracing digital payment systems.
- Massive public-private cloud infrastructure investment driving scalability: The growing investments in cloud infrastructure has bolstered the scope of FaaS platform deployments. For instance, between January and July 2024, the big three of cloud providers, i.e., Google, Amazon, and Microsoft had funneled investments of around USD 130 billion in data centers across 15 countries. The largest investments were in Europe. Additionally, the rising workforce development has improved the availability of skilled support for the design, deployment, and maintenance of FaaS solutions. With cloud solutions offering cost-effectiveness, the adoption rate is poised to increase by the end of 2037.
Technological Innovations in the Market
The market is experiencing a phase of structural transformation, with the rising technology adoption curve improving the design of financial products. Additionally, unlike the traditional digitization waves, the evolution is supported by the systematic integration of modular tech across both the regulated and non-regulated sectors. A key factor in the expansion of the market is AI being embedded to anti-fraud operations which are vital to safeguard financial services from falling prey to disruptive elements. The converging of the trends has formed a technology stack making FaaS indispensable to every sector reliant on transaction-heavy operations:
|
Technology Trend |
Metric / Real-World Example |
Primary Industry Impacted |
|---|---|---|
|
AI in Fraud Detection |
$30.2B saved in 2023 from enhanced real-time fraud analytics. |
Finance: fraud prevention; Telecom: anti-spam finance ops |
|
Blockchain Deployment |
J.P. Morgan's $1.3B repo trade via Onyx platform (2023) (source: JPM) |
Finance: trade settlement; Manufacturing: traceability |
|
Cloud Scalability |
83.4% of fintechs deploying cloud infra by 2025 (source: U.S. Treasury/FDIC) |
Manufacturing: embedded finance APIs; Retail: microservices |
|
Instant Payments (UPI) |
18.67B transactions in May 2025 alone |
Telecom: mobile wallets; Retail: instant credit extension |
|
Cybersecurity Talent |
6,000+ CISA/NICCS courses for fintech-specific security (source: DHS.gov) |
Public Sector & Finance: regulatory-grade FaaS compliance |
AI & ML Integration Impact on the Fintech as a Service (Faas) Market
|
Company |
Integration of AI & ML |
Outcome |
|---|---|---|
|
Plaid |
Deployed AI for transaction categorization and anomaly detection across embedded finance APIs |
Achieved 32% reduction in false-positive fraud alerts; improved product recommendation rates by 20% |
|
Stripe |
Leveraged ML in Radar fraud prevention engine; trained on billions of transactions for dynamic risk modelling |
Reduced fraudulent transactions by 41%; increased authorization rates by 8.5% |
|
Square |
Adopted AI for dynamic loan underwriting in Square Capital, customizing offers based on merchant behavior |
Cut approval time by 62%; reduced default rate by 13% |
|
Affirm |
Integrated ML models to forecast consumer creditworthiness in real time |
Lowered loan processing time by 24%; decreased cost per underwriting by 19% |
|
J.P. Morgan |
Implemented AI in product design for digital investment tools via “COiN” and predictive analytics for trade documentation |
Reduced document review time by 82%; saved $150M annually in operational overhead |
5G Adoption Impact on the Fintech as a Service (Faas) Market
|
Company |
5G-Enabled Use Case |
Outcome (2023–2024) |
|---|---|---|
|
Siemens |
Deployed 5G-enabled industrial IoT at its Amberg factory for real-time equipment diagnostics |
Boosted operational efficiency by 21%; reduced unplanned downtime by 32% |
|
Verizon & AWS |
Launched 5G Multi-access Edge Computing (MEC) for real-time financial data streaming to embedded platforms |
Enabled <10ms latency; supported real-time FaaS microservices at trading firms |
|
DHL |
Implemented 5G IoT in smart warehouses for package tracking and robotic coordination |
Improved logistics speed by 24%; decreased misrouting incidents by 17% |
|
Alibaba Cloud |
Applied 5G for ultra-low latency payments in smart retail using facial recognition-linked wallets |
Cut checkout time by 39%; increased consumer engagement by 22% |
|
Mastercard |
Partnered with SK Telecom to launch 5G biometric authentication solutions for contactless transactions |
Reduced transaction fraud rates by 17.5% in 5G-connected devices |
Challenges
- Slow cross-border FaaS expansion due to regulatory fragmentation: The regulatory fragmentation across jurisdictions has emerged as a major barrier to scaling cross-border FaaS platforms. While the market benefits from the accelerated API adoption, its growth is impaired by the absence of a unified regulatory framework for embedded finance products. Moreover, constraints compounded by the regulatory fragmentation include prolonged go-to-market timelines and a rise in legal overhead.
Fintech as a Service Market Size and Forecast:
| Report Attribute | Details |
|---|---|
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
17.5% |
|
Base Year Market Size (2024) |
USD 360.7 billion |
|
Forecast Year Market Size (2037) |
USD 2.96 trillion |
|
Regional Scope |
|
Fintech as a Service Market Segmentation:
Service Segment Analysis
The payments segment is the core pillar of the FaaS ecosystem, with an estimated revenue share of 45.3% by the end of 2037. The rising adoption of tech such as UPI, PSD2, FedNow, etc., is a major factor in the segment's growth. Moreover, in terms of investment metrics, trends highlight a greater funneling of investments for API-first payment engines and a push for greater interoperability in cross-border systems. For market entrants, opportunities are slated to be in embedded payment rails in e-commerce and digital wallets. FaaS players that are able to offer seamless modular payment platforms with strong SDKs and cloud-native infrastructures are positioned to capitalize on the surging digital payments across B2B and B2B2X models.
Application Segment Analysis
The retail banking segment is projected to maintain a 40.2% revenue share throughout the forecast timeline. A major driver of the segment is the acceleration of API ecosystems and modular architecture. Additionally, there has been a high demand for turn-key digital banking modules, contributing to the segment’s profitability. The rising demand for KYC has enabled banks to relaunch online platforms faster and at a more cost-effective rate. Within the segment, investment opportunities are rife in embedded loan/disbursement services and personalized financial management tools.
Our in-depth analysis of the global market includes the following segments:
|
Segment |
Subsegments |
|
Service |
|
|
Application |
|
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Fintech as a Service Market - Regional Analysis
North America Market Insights
The North America market is predicted to maintain a leading revenue share of 40.4% during the forecast period, attributed to the mature digital payment ecosystem. The supportive regulatory ecosystem in North America, such as the CFPB guidance, the open finance initiatives in Canada, and the U.S. sandbox environments, supports faster product deployment. Moreover, the ongoing investments in AI and blockchain have supported continued growth in revenue, expanding the scope of improvements in FaaS platforms, which is slated to improve end user experience.
The U.S. FaaS market has emerged as the epicenter of fintech innovations. The market landscape of the U.S. is supported by the rising adoption of digital payments and BaaS models. Major players in the U.S. market are PayPal and Stripe, which are striving to expand the scope of their FaaS offerings. The push by the major market players has ensured a dynamic market that has faster product cycles and a growing integration into enterprise workflows. The trends have laid the groundwork for innovations in next-generation FaaS.
Asia Pacific Market Insights
The APAC FaaS market is expanding at a CAGR of 21.5% during the anticipated timeline, registering the fastest expansion rate. The rising growth is supported by the national-scale investments in digital payments infrastructure, and a rise in open-banking initiatives in economies such as China, India, Indonesia, etc. The expansion is supported by mobile payment volumes predicted to exceed USD 39 trillion by the end of 2037 in established markets like China. Additionally, a key aspect of APAC has been the considerably high penetration of smartphones, creating opportunities for investors to target regional scale-ups addressing SME credit infrastructure.
The India market is poised to remain one of the most lucrative regional markets globally. The government has supported nationwide digitalization of payment infrastructure, leading to large-scale popularity of Google Pay, PayTm, PhonePe, etc. Additionally, the National Payments Corporation of India (NPCI) has reported a rapid increase in UPI volumes over the years. In another aspect of the supportive regulatory ecosystem, the Reserve Bank of India has supported the push to improve the fintech cloud infrastructure in tier 1 cities in a bid to improve local hosting. With a significantly large base of end users and the B2B demand for FaaS platforms intensifying, the India market is estimated to expand its revenue share by the end of 2037.
APAC Spending Trends
|
Country |
FaaS Spending (%) |
Annual Govt Funding (2037 est.) |
Number of Businesses Adopting FaaS |
|---|---|---|---|
|
Japan |
11.4 |
$9.7 billion |
1.6 million |
|
China |
14.7 |
$12.4 billion |
6.4 million |
|
India |
10.6 |
$7.2 billion |
5.8 million |
|
Malaysia |
9.8 |
$2.3 billion |
850,000 |
|
South Korea |
13.9 |
$4.2 billion |
1.3 million |
Europe Market Insights
The Europe FaaS market is supported by the growth of open banking under the PSD2 and PSD3 directives. The market is further supported by the steady funding to improve digital infrastructure. For instance, the €1.2 billion Digital Finance Package has been vital in contributing to the increase in FaaS adoption. Additionally, markets such as Germany, France, the Netherlands, etc., are leading in FaaS deployments, especially in cross-border fund transfers. An emerging trend in Europe has been the rising popularity of ESG-linked fintech solutions among Gen-Z consumers.
The Germany market is poised to expand at a fast pace during the forecast timeline, supported by the rise in FaaS infrastructure deployments by neobanks and challenger banks. The increasing deployment is supported by the Digital Now initiative. Additionally, the German Banking Industry Committee (GBIC) has been instrumental in standardizing PSD2-compliant APIs, that has reduced integration timelines for FaaS providers. With SME adoption expected to rise in the coming years, the market is poised to maintain growth by the end of 2037.
Europe Spending Trends
|
Country |
% of ICT Budget Allocated to FaaS |
Notable 2023-2024 Spending Insight |
|---|---|---|
|
United Kingdom |
9.3 |
£1.4 billion spent on embedded finance programs |
|
Germany |
12.6 |
€2.2 billion market size; +28% demand since 2021 |
|
France |
8.7 |
€1.2 billion allocated to cloud FaaS platforms |
|
Italy |
5.4 |
45 FaaS pilot projects launched under govt grants |
|
Spain |
6.8 |
€650 million in digital finance investments |
|
Netherlands |
10.2 |
180+ fintechs integrated FaaS in 2023 |
|
Sweden |
9.2 |
SEK 4.2 billion in public–private FaaS deployments |
|
Finland |
5.3 |
75 innovation hubs linked to FaaS services |
|
Denmark |
7.4 |
120 digital services funded via FaaS models |
|
Norway |
6.1 |
NOK 3.8 billion total ICT spend; 25% FaaS allocation |
|
Poland |
4.9 |
350 SME integration projects funded by gov |
|
Belgium |
7.7 |
€540 million directed to embedded finance |
|
Switzerland |
8.2 |
CHF 1.2 billion in FaaS-backed banking tech |
Key Fintech as a Service Market Players:
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The global FaaS market is poised to remain competitive throughout the forecast timeline with opportunities intensifying in emerging market with the adoption rate of digital payment systems rises. Key players in the market such as Stripe, Adyen, and Marqeta lead revenue shares due to their development-first payment infrastructure. To maintain differentiation in the competitive sector, greater investments are expected in AI-powered fraud prevention. The table below highlights the major players in the market:
|
Company |
Country |
Revenue Share (2024) |
|---|---|---|
|
Stripe |
USA |
12.6% |
|
Adyen |
Netherlands |
9.3% |
|
Marqeta |
USA |
8.8% |
|
Solarisbank |
Germany |
6.7% |
|
PayPal (Braintree) |
USA |
5.6% |
|
Razorpay |
India |
xx% |
|
Payoneer |
USA |
xx% |
|
Airwallex |
Australia |
xx% |
|
G+D Financial Crime & Compliance |
Germany |
xx% |
|
Xfers |
Malaysia |
xx% |
|
Toss |
South Korea |
xx% |
|
Aplazame |
Spain |
xx% |
|
Nium |
Singapore |
xx% |
|
Monzo (Marketplace APIs) |
UK |
xx% |
|
ZestMoney |
India |
xx% |
Below are the areas covered for each company that is a key player in the fintech as a service (Faas) market:
Recent Developments
- In October 2024, Marqeta Flex announced the introduction of a new Buy Now, Pay Later (BNPL) capability embedded into partner apps. Due to the new introduction, Marqeta’s total processing volume increased by 29% YoY in the third quarter of 2024.
- In March 2024, Fiserv announced the launch of the Digital Pay API Suite, which is aimed at streamlining embedded finance for retailers. Early pilots have indicated an 11% reduction in time-to-market for new payment solutions.
Author Credits: Preeti Wani
- Report ID: 3964
- Published Date: Jul 02, 2025
- Report Format: PDF, PPT
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