Abdul Mikael, Head of Sales at AND Solutions
Every time someone hops out of a Grab without touching their wallet, or taps “pay later” on a Shopee checkout, they are using a piece of financial infrastructure they never consciously chose. There is no app to download, no form to fill, no trip to a bank branch. The transaction simply happens, folded invisibly into an experience that was never meant to be about money in the first place.
This is embedded finance, and according to Abdul Mikael, it has become the defining undercurrent of Southeast Asia’s digital economy.
Banking you don’t notice
“Embedded finance is essentially ‘invisible banking’,” Mikael explains. “It integrates financial tools like payments, credit, and insurance directly into everyday, non-financial platforms so transactions happen effortlessly in the background.”
Also Read: Security implications of embedded finance in non-financial platforms
That description captures why the region’s super-apps have become such fertile ground for the model. A Grab ride ends without a wallet in sight. A Shopee order gets split into instalments through ShopeePayLater at the point of checkout. In each case, the financial service arrives precisely when it is needed, with no detour through a traditional banking app.
When every company becomes a bank
The consequence of this shift is that companies with no history in finance are increasingly behaving like financial institutions, whether they intend to or not. Mikael points to Starbucks as the clearest illustration outside the region. Through its app’s preload feature, the coffee chain holds roughly US$2 billion in customer balances, a sum larger than the total deposits of many small-to-midsize traditional banks.
“Customers are essentially giving Starbucks an interest-free loan to fund its working capital,” he says, “while Starbucks generates hundreds of millions in high-margin revenue from interest on that float and unspent ‘breakage’ balances.”
E-commerce platforms and gaming apps across Southeast Asia are running the same playbook when they introduce stored-value wallets, buy-now-pay-later options, or reward systems: eliminating third-party processing fees, deepening customer stickiness, and quietly converting everyday user activity into a self-funding financial engine.
The trap of bolting finance on too soon
For founders eager to follow suit, Mikael’s advice is blunt: resist the urge to rush. The first real step, he says, is to “meticulously map the user journey and target a specific friction point, like checkout drop-offs or delayed payouts, where embedded finance provides immediate, seamless utility.”
Also Read: Why embedded finance is critical to Southeast Asia’s digital future
The mistake he sees most often is what he calls premature financialisation — treating credit, BNPL, or wallet features as a quick monetisation trick before the underlying product has found genuine traction. “Embedded finance is an accelerant for user experience, not a band-aid for poor product design,” he says. “If your core non-financial offering doesn’t already resonate with customers, introducing a financial tool won’t fix it.”
Security, he adds, cannot be an afterthought either. The smarter route is partnering with providers that already hold the necessary regulatory licences and maintain standards such as PCI-DSS and automated KYC, rather than attempting to build bank-grade compliance from scratch.
One region, many speeds
Southeast Asia’s diversity complicates any attempt at a single regional strategy. AND Solutions operates across 11 countries, with a strategic focus on the Philippines, Thailand, Indonesia, and Vietnam, and Mikael is candid about what that has taught him: “A copy-and-paste playbook will fail.”
In mature markets like Singapore, existing banking infrastructure means new technology mostly adds convenience. In emerging markets, that infrastructure barely existed for large parts of the population. “Instead of building physical branches or issuing credit cards to millions of unbanked citizens, these regions leapfrogged the card phase entirely,” Mikael notes, moving straight to mobile-first rails built on e-wallets, telecom networks, and national QR systems.
Post-pandemic, consumer priorities have shifted too. Ease of use and constant access, once selling points, are now simply expected. “Security has emerged as the primary focus for consumers today,” he says, a direct response to the wave of fraud and phishing that accompanied the pandemic-era surge in digital payments.
Where the real money is
With embedded finance revenues in Singapore alone projected to reach US$7.85 billion by 2029, Mikael sees the sharpest opportunities not in flashy consumer verticals but at the intersection of B2B software and AI-driven infrastructure, using real-time operational data to offer instant trade credit, automated cash-flow tools, and predictive underwriting.
He is equally clear about what will separate winners from also-rans. “The winners in this space won’t be platforms with the lowest processing rates,” he says, but those using proprietary data to deliver financing at precisely the right moment, transforming embedded finance into “an invisible ecosystem moat” rather than a mere transaction fee.
Inclusion, done responsibly
Perhaps the most consequential frontier, though, is financial inclusion. Traditional lending’s reliance on formal credit history has long excluded large numbers of Southeast Asia’s individuals and SMEs. AND Solutions’s recent collaboration with B-Quik, Thailand’s leading automotive service provider, aims to embed financing directly into that network, using AI and alternative data to assess risk beyond a single credit score.
Also Read: Embedded finance will drive financial growth and sustainability in India
“Bringing technology closer to everyone means making financial services available where people already live, work, and do business,” Mikael says — but he is quick to add a caveat: “AI should be transparent, explainable, and continuously monitored to ensure fair and consistent decisions.”
As embedded finance matures beyond payments into AI-powered lending, Mikael’s closing thought feels like the clearest summary of where the industry is heading: “The future of embedded finance won’t be defined by how many financial products a platform offers. It will be defined by how intelligently those products are delivered at the right moment.” In a region racing to digitise, that distinction may prove to be the only one that matters.
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