Embedded models turn leasing from a process into an experience. This marks a shift which is not only technological but also psychological. In a world driven by instant reward and gamified digital journeys, customers no longer perceive financing as a separate step – they experience it as part of the interaction itself. Progress bars, instant confirmations, and personalized offers trigger the same gratification loops that keep users engaged in apps and online platforms. The smoother and faster the experience, the stronger the perceived value – proving that in the era of embedded finance, usability is not just design: it is emotion. – Stéphane Vettori, Chief Product Officer, Basikon

Table of contents

1. Introduction: embedded leasing – the next evolution in finance
2. What is embedded leasing?
3. Hidden in plain sight: the invisible revolution
4. From loopholes to state of the art
5. Why embedded leasing wins: cheap, gratifying, and green
6. The retailer’s perspective: orchestrating seamless journeys
7. Beyond cars: embedded leasing across industries
8. Case study: Eastern Europe leads the way
9. Barriers to adoption: why is embedded leasing not everywhere?
10. Conclusion: the seamless future of finance

Introduction: embedded leasing - the next evolution in finance

Despite the comprehensive mapping of embedded finance – covering payments, lending, and insurance – embedded leasing remains conspicuously absent according to KPMG. This oversight has limited the industry’s ability to fully leverage asset-based financing within digital ecosystems. This gap is striking, given that leasing is one of the oldest financial practices and today underpins asset usage across industries, from manufacturing to companies operating close to collections, risk, and balance-sheet management.

Its invisibility has structural causes. Leasing lived inside service agreements, handled in back offices, and treated as an accounting technicality rather than a customer-facing product. Earlier standards kept many lease components off balance sheets, further obscuring their scale and relevance.

This article unpacks the mechanics and strategic significance of embedded leasing, offering insights into its evolution and the opportunities it presents for forward-thinking enterprises.

What is embedded leasing?

Embedded leasing is the integration of leasing options directly into digital user journeys. It enables customers to select, define, and manage a lease for an asset within the same interface where the product is discovered or configured.

Just like embedded payments transformed e-commerce, embedded leasing will redefine asset finance. – Thomas Nokin, CEO, Basikon

In practice, embedded leasing connects all steps of the leasing lifecycle through API-based processes, including identity verification, scoring, contract generation, and payment setup. Unlike traditional leasing models, which rely on external channels and manual checks, embedded leasing consolidates every phase into a single, coordinated digital flow. This structure makes the leasing experience immediate, contextual, and accessible within the point of sale. But if it is so powerful, why is it not more widespread?

Hidden in plain sight: the invisible revolution

Embedding has already transformed other areas of finance. Apple Pay integrates payments directly into the user journey and Uber removes external steps by embedding payment and confirmation inside the application itself. Floa Bank, Affirm, and Klarna have embedded point-of-sale lending. Insurance is embedded in similar ways: platforms such as Booking.com offer integrated coverage options directly within the booking flow.

By embedding financial services, companies can provide a seamless experience for their customers, rather than forcing them to go to another provider or redirect. – Dr. Jens Luetcke, General Manager Germany, Solaris

Leasing follows the same principle but historically remained less visible. Under earlier accounting and operational structures, leasing components were often embedded inside broader service agreements without being explicitly identified as leases. As a result, embedded leasing existed functionally but lacked clear analytical or commercial visibility.

With the rise of digital channels and API-driven architectures, this implicit model is now becoming explicit. Decisioning, scoring, and contracting processes now occur within unified digital journeys, which increases the operational integration of leasing components. Yet, technology alone does not explain leasing’s new prominence; regulatory reforms, evolving market expectations, and shifting user behaviors have also played pivotal roles.

From loopholes to state of the art

Earlier accounting standards created structural loopholes. Under IAS 17 and ASC 840, leasing elements inside service contracts were not always identified separately. As a result, many agreements remained off balance sheet. This limited transparency and made long-term obligations difficult to compare across companies and industries.

Airlines illustrate this effect clearly. For many years, long-term aircraft leases were treated as operating leases, which meant that the associated obligations did not appear on the balance sheet. This obscured the scale of long-term commitments and reduced comparability across carriers. The IFRS Foundation estimated that this shift brought USD 3 trillion of lease obligations onto corporate balance sheets in its first year of implementation.

Modern standards resolved this issue. IFRS 16 and ASC 842 require lease components to be separated from services. This means right-of-use assets and corresponding liabilities must now be recognized on the balance sheet. These rules established a clear and consistent basis for identifying and reporting leases.

Technology reinforces this shift. API-driven systems and modular architectures now support automated lease identification, scoring, and contract generation. What was previously fragmented manual work is becoming standardized through shared data structures and integrated digital processes.

With this technological foundation in place, several additional forces are now accelerating the adoption of embedded leasing.

Why embedded leasing wins: cheap, gratifying, and green

This chapter describes three groups of drivers. They illustrate why access-based financing - defined as transactions that can be market mediated but where no transfer of ownership takes place - has increased. Some statements refer to broader socioeconomic or behavioral patterns. They provide context. They do not imply that every point applies exclusively to embedded leasing.

Socioeconomic drivers

Socioeconomic conditions influence how people and companies finance assets. The number of self-employed workers and small enterprises has increased. Eurostat 2024 reports that more than 15 percent of the European workforce is self-employed. These groups prefer predictable costs and low initial investment. Leasing supports this preference because it spreads payments over time.

Asset prices have risen in many markets. The OECD shows that consumer prices have increased by about 30 percent since 2020. Higher prices make ownership more difficult. Leasing becomes a practical alternative because it reduces upfront costs.

Generational differences contribute to this shift. Younger users prioritize flexibility and liquidity over ownership. Leasing aligns with these preferences. These socioeconomic factors create a context in which embedded leasing can operate effectively.

Psychological drivers

Psychological patterns shape decision behavior. People prefer simple and contextual choices, and embedded options align with this tendency by keeping the process inside the digital journey rather than creating external detours. When options multiply, decision-making becomes more difficult, and embedded leasing reduces this effect by maintaining a coherent and uninterrupted path. Personalization further strengthens perceived convenience, and Marqeta reports that integrated financing options can raise conversion rates by 25 to 35%, lowering cognitive effort and increasing acceptance.

Embedded models turn leasing from a process into an experience. This marks a shift which is not only technological but also psychological. In a world driven by instant reward and gamified digital journeys, customers no longer perceive financing as a separate step – they experience it as part of the interaction itself. Progress bars, instant confirmations, and personalized offers trigger the same gratification loops that keep users engaged in apps and online platforms. The smoother and faster the experience, the stronger the perceived value – proving that in the era of embedded finance, usability is not just design: it is emotion. – Stéphane Vettori, Chief Product Officer, Basikon

Sustainability drivers

Sustainability influences consumption patterns. Many users prefer lifecycle models with renewal, refurbishment, and reuse. Leasing supports this approach because it separates usage from ownership.

Refurbished and remarketed assets extend product lifecycles. The McKinsey & Ellen MacArthur Foundation shows lifecycle extensions of 30 to 50% and CO₂ reductions of up to 40%. Embedded models can connect these lifecycle steps within a single digital process. This creates an environment where access-based consumption becomes more practical. Sustainability expectations increase the relevance of leasing structures.

These dynamics are fundamentally altering business models and asset utilization strategies, asking for greater operational agility for companies and more flexible, value-driven options for consumers. The following sections examine the practical implications of these shifts for both businesses and consumers.

The retailer’s perspective: orchestrating seamless journeys

Embedded leasing influences how retailers design digital journeys. It reduces external steps. It keeps the user inside one process. This lowers drop-off rates because customers no longer move between multiple systems.

Consumer research supports this effect. Marqeta reports that nearly 40% of users abandon a purchase when they must switch payment or financing methods. Embedded flows reduce this friction. They maintain continuity in checkout and lower the cognitive load on the user.

API-first adoption also affects retailers. McKinsey notes that more than 80% of banks have invested in API-first models. These models allow retailers to connect financing directly to configuration and checkout. This reduces manual work and improves processing speed.

Legacy systems slow adoption. Older financial infrastructures limit real-time integration. The Software Improvement Group reports that many institutions still rely on systems built in the 1980s and 1990s. These systems make modern embedded flows more complex to implement.

These conditions influence how retailers structure user journeys. Embedded leasing supports a simplified process by connecting financing, scoring, and contracting within one digital path.

But what are concrete real-world examples of embedded leasing in practice?

Beyond cars: embedded leasing across industries

Embedded leasing now appears in multiple industries. It expanded from automotive into information technology, equipment finance, renewable energy, and agriculture. These sectors adopt leasing because shorter innovation cycles and rising asset prices increase the relevance of usage models.

The global market for information technology leasing continues to grow. Congruence reports a market value of USD 4.66 billion in 2024 and projections above USD 12.5 billion by 2032. The Equipment Finance Industry notes that more than 80 percent of end users finance equipment rather than purchasing it outright. These figures show that the shift from ownership to access is widespread.

Today, leasing can be used to finance almost everything that the economy needs: vehicles and vehicle fleets, construction and agricultural machinery, industrial machinery and equipment, IT equipment, software and investments in digitalisation, commercial real estate, medical equipment, power stations and wind turbines, buses and trains in local public transport and much more. – Deutsche Leasing AG

Agriculture demonstrates this trend as well. Leasing models support farm machinery and livestock access. The farm equipment leasing market in Europe reached USD 7.76 billion in 2024. Initiatives such as CowGestion illustrate how leasing can apply even to livestock by reducing upfront capital requirements and enabling structured asset management.

These examples show how embedded leasing is expanding beyond vehicles into broader categories with similar usage patterns. With adoption accelerating across diverse sectors, the next frontier lies in identifying where the most groundbreaking innovations in embedded leasing are emerging.

Case study: Eastern Europe leads the way

Eastern Europe demonstrates rapid adoption of embedded leasing. These markets built their financial infrastructure later than Western Europe. As a result, many systems were digital from the beginning. This created an environment where modern architecture could be implemented without legacy constraints.

Fintech investment accelerated this transformation. The Baltic region attracted more than EUR 1.6 billion in fintech funding in 2022. Dealroom identifies embedded finance as one of the central themes within this investment activity. This momentum supported the development of new leasing platforms with integrated digital processes.

One example is Orion Leasing. The company uses an API-first architecture to automate onboarding, credit scoring, and contract generation. This approach contributed to 60 percent year-over-year portfolio growth and a significant increase in new customers. The model illustrates how digitally native institutions can scale leasing through integrated infrastructure.

Another example is Glinche Automobiles. The dealership adopted a fully digital process that connects procurement, customer management, and instant financing. The integration with Crédit Agricole bank supports end-to-end digital flows and enables a substantial share of online sales.

These developments show how digitally prepared ecosystems accelerate embedded leasing adoption and demonstrate clear operational advantages. Despite these, adoption remains uneven across markets due to a combination of structural and technical barriers.

Barriers to adoption: why is embedded leasing not everywhere?

Embedded leasing is missing from early embedded-finance narratives not because it was new, but because it followed a different pattern. Payments, lending, and insurance were counted as discrete events; leasing operated through long, service-based relationships. This structural difference excluded it from the frameworks that later defined the category. It is the reason why, even today, a search for "embedded leasing" returns only a handful of results.

The second barrier is technical. Leasing spans verification, scoring, pricing, contracting, and lifecycle operations. Without modular systems and API-based workflows, these steps cannot run inside one digital journey. Many institutions still rely on infrastructures that separate these components, which makes leasing harder to embed than payments or lending.

These two constraints – historical misalignment and technical fragmentation – explain why embedded leasing remains uneven across markets, even though it had existed in practice for decades.

Open architectures now reduce this gap by unifying scoring, contracting, and lifecycle management. Socioeconomic change, behavioral patterns, and sustainability expectations strengthen this shift. Looking ahead, its advancement will likely center on deeper integration with AI, expansion into new asset classes, and the creation of fully automated, user-centric financial ecosystems.

APIs make leasing modular. Data makes it meaningful. In an open architecture, these two elements work together to automate and personalize the entire lifecycle of an asset-based financial product. From onboarding to portfolio management, everything is connected through one infrastructure. That’s how embedded leasing becomes the all-in-one engine of modern finance. – Thomas Nokin, CEO, Basikon

Conclusion: the seamless future of finance

Embedded leasing integrates financing into digital usage patterns and supports consistent processes across sectors. Its expansion from vehicles into information technology, equipment finance, and even agriculture demonstrates how access-based models operate across asset classes.

The development of unified architectures strengthens this shift by enabling automated scoring, structured lifecycle management, and efficient data exchange. These conditions indicate a future in which embedded leasing becomes an invisible foundation for consumption, whether the asset is a computer, a machine, or even a cow.