According to PYMNTS.com, the embedded finance market valued at nearly $100 billion in 2023 is projected to reach $251.5 billion by 2029, with basic payment integration now considered table stakes. The emerging trend of “connected commerce” represents the convergence of payments with full banking functionality, enabling real-time money movement and storage that gives businesses greater control over cash flow. This evolution is particularly evident in industries like hospitality, where restaurant payments can be instantly allocated to servers, suppliers, and expenses, and in property management, where platforms handle complex money flows across tenant payments, owner distributions, and operational expenses. The banking-as-a-service market supporting this shift is projected to grow from $24.6 billion in 2025 to over $60 billion by 2030, providing the infrastructure that makes connected commerce scalable as companies must add higher-margin financial services to remain profitable. This fundamental shift represents the next chapter in financial technology evolution.
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Table of Contents
The Infrastructure Revolution Enabling Connected Commerce
The rise of connected commerce isn’t happening in a vacuum—it’s built on a decade of infrastructure development that most businesses never see. Banking-as-a-Service platforms have matured to the point where they can provide the regulatory compliance, security frameworks, and technical reliability that previously required traditional banking partnerships. What’s particularly transformative is the combination of BaaS with real-time computing capabilities that allow money to move instantly between accounts, wallets, and payment rails. This infrastructure layer handles the complexity of financial regulations, anti-money laundering requirements, and settlement processes, allowing software companies to focus on building industry-specific solutions rather than becoming financial institutions themselves.
The Coming Battle for Business Banking Relationships
Traditional banks face an existential threat that goes far beyond payment processing. Where banks once held exclusive relationships with businesses through checking accounts, lending, and treasury services, connected commerce enables software platforms to become the primary financial interface for their customers. A restaurant management platform can now offer business accounts, instant fund disbursement, and working capital loans—all within the same computing platform where they manage inventory and scheduling. This represents a fundamental disintermediation of the banking relationship, with industry-specific software companies possessing deeper understanding of their customers’ financial workflow needs than traditional banks ever could.
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The Hidden Challenges and Regulatory Hurdles
While the opportunities are substantial, the path to successful connected commerce implementation is fraught with challenges that many platforms underestimate. The regulatory burden alone is significant—companies must navigate money transmitter licenses, state-by-state compliance requirements, and evolving financial regulations across multiple jurisdictions. There’s also the operational risk of managing actual money movement versus simply processing payments; a system failure in payment processing might mean delayed transactions, but a failure in connected commerce could mean misallocated payroll or lost supplier payments. The hospitality industry examples mentioned in the source analysis are particularly telling—while the benefits are clear, the consequences of errors in tip disbursement or tax reserve management could be catastrophic for both the platform and its customers.
Beyond Hospitality: The Untapped Verticals
The property management and hospitality examples only scratch the surface of where connected commerce will create the most value. Healthcare represents a massive opportunity, where medical practice management software could handle patient payments, insurance reimbursements, provider payments, and operational expenses in a unified system. Construction and manufacturing face similar fragmentation, with projects requiring complex fund allocation across materials, subcontractors, and payroll. Education technology platforms could revolutionize how schools manage tuition payments, financial aid disbursement, and vendor payments. The key insight is that the most successful implementations will be those that solve industry-specific money movement challenges rather than offering generic financial services.
The 2026 Landscape: Consolidation and Specialization
Looking toward 2026, we’re likely to see significant market consolidation as platforms that successfully implement connected commerce acquire those that don’t. The margin pressure from commoditized payment processing will force many software companies to either develop sophisticated financial capabilities or partner with specialized providers. We’ll also see the emergence of “connected commerce as a service” platforms that offer white-labeled solutions for specific industries, lowering the barrier to entry but potentially creating new dependency risks. The most successful players will be those that balance financial innovation with operational reliability, recognizing that when you’re handling core business functions, system stability becomes as important as feature innovation.
