Embedded Finance and IBAN: Why the Next Banking Account You Open Won’t Come From a Bank

The most interesting thing happening in business banking right now is not happening at banks.

It is happening inside accounting software, e-commerce platforms, project management tools, and HR systems. The banking infrastructure — the IBAN accounts, the payment rails, the FX conversion — is being embedded directly into the software that businesses already use every day. The account does not live at the bank. It lives inside the tool.

This is called embedded finance, and it is moving faster than most people in traditional banking are comfortable acknowledging. The embedded finance market is projected to reach $384 billion by 2029 (Juniper Research). 65% of SMEs in a 2023 survey said they would prefer to access banking services inside their existing business software rather than through a separate banking interface. The demand is clear. The infrastructure to meet it — built on IBAN accounts issued through Banking-as-a-Service (BaaS) platforms — is maturing rapidly.

Here is what this means for businesses that use IBAN accounts for international payments — and why the next account you open may arrive without ever visiting a bank’s website.

What Embedded Finance Actually Is

Embedded finance is the integration of financial services — banking, lending, insurance, payments — directly into non-financial platforms and software. The customer never leaves the platform to access the financial service. The financial infrastructure is invisible beneath the software interface.

The concept is not entirely new — retail credit cards at car dealerships or store credit at furniture retailers are early forms of embedded finance. What is new is the API-based infrastructure that makes embedding sophisticated financial products — including full IBAN accounts with SEPA connectivity — into any software platform technically straightforward and commercially viable.

The enabling infrastructure is Banking-as-a-Service (BaaS): platforms that expose banking functionality — account creation, payment initiation, IBAN issuance, FX conversion, card issuance — through APIs that any software company can integrate. The BaaS provider holds the banking licence or EMI authorisation. The software company builds the user interface. The end customer gets a banking product inside the tool they are already using.

IBAN Accounts in Embedded Finance: The Current Landscape

IBAN accounts are central to embedded finance for business users, because IBAN is the account identifier that connects to European payment networks. When a software platform embeds a Euro IBAN for its business customers, it is not just adding a feature — it is giving each customer a direct connection to the SEPA network, inside the platform.

Here is where IBAN-embedded accounts are already appearing:

Accounting and ERP platforms. Several accounting platforms now offer business accounts — with IBANs — embedded directly inside the accounting interface. The account is opened inside the software, receives payments that are automatically reconciled against invoices in the same system, and initiates payments directly. The banking and the bookkeeping happen in the same place. Platforms operating in this space include Xero (in partnership with banking providers), Holvi (accounting-integrated banking), and several regional accounting software providers across Europe.

E-commerce platforms. Shopify Balance (not yet available in all markets), Etsy’s banking partnerships, and other e-commerce platform-embedded banking products give sellers access to payment accounts — with IBAN capability in European markets — without leaving the selling platform. Revenue flows directly into the embedded account, reconciled against order history automatically.

HR and payroll platforms. Payroll platforms are embedding multi-currency accounts with IBAN capability to enable direct salary payment from within the payroll interface. For businesses with international employees or contractors, an IBAN embedded in the payroll platform removes the manual step of initiating bank transfers separately.

Expense management platforms. Platforms like Spendesk, Payhawk, and Pleo embed company accounts — with IBANs and virtual card issuance — inside expense management software. Business spending, card issuance, and payment approval workflows all operate inside one interface, with the underlying IBAN infrastructure invisible to the user.

Marketplace platforms. As covered in Article 15, marketplace platforms increasingly embed virtual IBAN accounts for each seller directly inside the marketplace interface. The seller has what looks like a bank account, accessible in the platform, used for receiving payouts and making payments — all built on BaaS infrastructure.

The BaaS Providers Building This Infrastructure

Several specialised Banking-as-a-Service providers are the infrastructure layer beneath most embedded finance products:

Modulr. UK and EU regulated, offering IBAN accounts, SEPA, Faster Payments, and payment processing via API. Powers embedded finance products for accounting platforms, payroll providers, and fintech businesses. Well-regarded for API quality and reliability.

ClearBank. UK banking licence holder offering banking-as-a-service to UK fintech and embedded finance platforms. Provides the clearing infrastructure that many UK fintech IBAN accounts sit on top of.

Railsr (formerly Railsbank). EU and UK regulated BaaS provider offering IBAN issuance, card programmes, and payment processing. Has had regulatory challenges (administration in 2023, recovered) — illustrating the importance of BaaS provider due diligence.

Swan. French-regulated electronic money institution offering white-label IBAN accounts and SEPA connectivity for European software platforms. Strong product and rapidly growing.

Stripe Treasury. Stripe’s BaaS offering, enabling platforms built on Stripe to offer financial accounts (with IBAN-equivalent capability) to their users. Built on partner bank relationships rather than a direct banking licence.

What Embedded Finance Means for How Businesses Access IBAN Accounts

The embedded finance shift has three concrete implications for how businesses will access and use IBAN accounts over the next five years:

Friction at account opening disappears. When an IBAN account is embedded in software you already use and are already KYC-verified with, opening the banking account is often a single consent click rather than a separate application process. The platform already knows who you are. The KYC is reused. The IBAN is provisioned immediately.

Reconciliation becomes automatic. An IBAN account that lives inside your accounting platform automatically matches incoming payments to invoices, outgoing payments to bills, and maintains a live bank reconciliation without any manual process. The separation between banking and bookkeeping — which has always been artificial — disappears.

Multi-banking becomes multi-platform. Instead of managing multiple bank accounts at multiple banking providers, businesses will manage multiple financial functions inside multiple platforms — payroll banking inside the HR system, supplier payments inside the ERP, customer collections inside the CRM. The IBAN infrastructure is the common thread connecting these embedded accounts to the same payment networks.

The Regulatory Dimension: Embedded Finance Is Still Regulated Finance

The most important thing to understand about embedded finance is that embedding banking inside software does not change the regulatory nature of the banking. An IBAN account embedded in an accounting platform is still a regulated financial account, subject to the same KYC, AML, and consumer protection requirements as any other IBAN account.

The regulatory responsibility lies with the BaaS provider — the entity holding the banking licence or EMI authorisation — not the software platform. But as the customer, your rights and protections derive from that BaaS provider’s authorisation, not from the software platform’s reputation or size.

Before opening an embedded finance account, know who the regulated entity behind it is. If an accounting platform offers you a business account, ask which bank or EMI is providing the underlying account infrastructure. Verify that entity’s regulatory status. Your fund protection and your account rights flow from the regulated entity, not from the software platform.

Embedded finance removes friction from banking. It does not remove regulation. The IBAN account inside your accounting software is as regulated as the one at your bank — provided the BaaS provider behind it is properly licensed. Always know who that is.

What Businesses Should Watch for in 2025–2026

Accounting platform banking integration. If your accounting platform does not yet offer an embedded business account, watch for announcements. The major accounting platforms are all moving in this direction — embedded accounts are becoming a standard feature expectation, not a premium add-on.

Multi-platform IBAN portability. As embedded accounts proliferate, the ability to use the same IBAN across multiple platforms — and to move it if you switch platforms — becomes important. Ask providers about IBAN portability when evaluating embedded accounts.

BaaS provider consolidation. The BaaS market is consolidating. Some providers will fail; others will be acquired. Understand which BaaS provider powers any embedded account you rely on — if the BaaS provider fails, the embedded account is affected regardless of the software platform’s health.