In 2025, embedded finance will have become part of everyday life. Most people now tap their phones to buy train tickets, pay for food through apps, and check out online without even noticing which payment service is being used. Embedded payments have quietly become the default. 

But embedded credit? That is still a bit different. Despite Buy Now, Pay Later (BNPL) appearing at almost every checkout, and many retailers now offering credit limits inside their apps, a clear trust gap has formed. People like the convenience of embedded payments, yet they pause when the same brands offer them credit, even when the terms are fair and regulated. 

Why does this gap exist? And what can businesses do about it?

Embedded Payments Feel Invisible and Low-risk

The biggest reason consumers trust embedded payments is simple: they barely notice them anymore. 

Over the last few years, retailers, transport apps, delivery platforms, and subscription services have built payment flows that are clean, seamless, and fast. Tokenisation, biometric authentication, and secure wallets mean payments feel safe without requiring the user to think about the technology behind them. 

Embedded payments have become: 

• Predictable: the same journey each time. 
• Familiar: tap, confirm, done. 
• Low commitment:  money leaves your account, and that’s it. 

Even when people do notice, they assume payments are standardised and regulated. There is no perceived risk or long-term obligation. It’s just paying for what you already decided to buy. 

Since embedded payments work so smoothly, trust grows quietly in the background.

Embedded Credit Demands Trust in a Completely Different Way

Credit cannot be invisible. It can be convenient, but it still requires a consumer to step into a commitment. 

When a retailer or app offers credit, the consumer must believe that: 

• The lender is fair 
• The terms are clear 
• Their data will be used responsibly 
• The credit won’t harm them later 

Even in 2025, these assumptions are far from guaranteed in consumers’ minds. 

Many people still carry memories of confusing interest charges, aggressive collections, and unclear contract terms from traditional lenders. The BNPL boom of 2020–2023 created another wave of scepticism, especially as stories emerged of shoppers missing payments and damaging their credit files without realising it. 

So while embedded payments feel like a natural part of checkout, embedded credit triggers a different emotional response: “Is this safe? Will I regret this later?”

Most Consumers Don’t Trust Retail Brands as Lenders

Another major difference is who is offering the service. Payment rails in the background are usually run by trusted names: banks, card networks, or well-known wallets. Consumers aren’t consciously thinking about them, but they trust the ecosystem. 

With embedded credit, the front-end lender is often a retail brand, not a bank. Even when a licensed lender is powering the credit in the background, the customer sees the shop, app, or marketplace offering the loan. 

In 2025, consumers are still unsure whether: 

• Retailers have their best interests at heart 
• The credit offer is designed to be helpful, not to increase spending 
• problems will be handled fairly if something goes wrong 

This uncertainty slows adoption or acceptance. People trust retailers to sell clothes or electronics, not manage their long-term financial well-being.

Payment Friction Was Removed, Credit Friction was Regulated

The success of embedded payments came from removing friction. The safety came from strong authentication and encrypted systems that worked instantly behind the scenes. However, credit requires the opposite: regulated friction. 

In the UK, new regulations introduced between 2024 and 2025 require: 

• Clearer affordability checks 
• Standardised disclosures 
• Cooling-off periods for some types of short-term credit 
• More explicit warnings and regulated marketing language 

All of this is good for consumers, but it adds friction at precisely the moment embedded experiences try to smooth things out. In other words, embedded credit cannot be as seamless as embedded payments. The more steps there are, the more time users have to hesitate or abandon the transaction.

People Treat Money in Their Account Differently From Money They Owe

This sounds obvious, but it matters: When you make a payment, the money is gone, and you can move on. When you take credit, even a small amount, you now have a future obligation and potential risk. There is also perceived uncertainty, as it is something that can affect your future financial health or your credit rating. 

In the end, paying is transactional, while borrowing is more of a commitment and psychological. This mental load is one reason why embedded credit adoption has stopped short of the explosive growth many analysts predicted back in 2022 and 2023.

Consumer Attitudes Changed in 2025

A few trends have shaped today’s behaviour: 

Cost-of-living pressure made people more cautious
Although inflation stabilised, household budgets remain tight. People are now more deliberate about the debt they take on, even small short-term borrowing. 

The credit-scoring ecosystem became more transparent
With new open banking and data-sharing rules, consumers now know much more about how borrowing affects their credit profile. This creates healthier decision-making, but also adds to hesitation. 

BNPL regulation improved trust, but also raised the bar
Clearer rules increased confidence in well-known BNPL brands, but the same regulation made consumers more aware of the risks of borrowing from unfamiliar providers. 

The result: Consumers trust embedded credit when it comes from a known financial brand, but hesitate when it comes from retailers or apps they use casually.

What Businesses Can Do to Build Trust

The trust gap is not a permanent barrier. Businesses can win consumer confidence with the right approach. 

Be radically transparent
Short explanations beat long terms and conditions. Users want to know the exact total cost and the repayment schedule. They also want to know how missed payments will be handled and whether their credit profile will be affected. Clear, simple language goes further than lengthy legal language. 

Use embedded credit only when it genuinely helps the user
Consumers can spot when credit is pushed too aggressively. Limit offers to moments where credit provides genuine value, such as spreading the cost of necessary purchases, repairs, or high-value goods. This would be much more effective than fuelling impulse buys. 

Show the financial partner powering the credit
If the lender behind the scenes is reputable, display that name proudly. Consumers feel safer when they recognise the financial institution supporting the offer. 

Offer soft credit checks before any commitment
People want to explore their options without harming their credit profile. Soft checks build confidence and reduce abandonment. 

Make repayment management effortless.
Real-time reminders, clear dashboards, and simple early-repayment options make credit feel less risky and more in the consumer’s control. 

The Future: Embedded Credit Will Grow, But Only Where Trust is Earned 

Embedded payments won because they solved a clear problem: making everyday purchases easier. Embedded credit solves a harder problem: offering borrowing in a way that feels responsible and supportive, not pushy or confusing. 

In 2025, consumers are cautious but open. They will accept embedded credit when they trust the brand and the lending product is transparent. Ensuring that the credit is genuinely helpful, and the experience is simple without hiding important details, can go a long way in building trust, and ultimately engagement. 

While the trust gap does exist, it’s not permanent. The companies that get this right will build relationships that last far longer than a single transaction.