ConnectPay Launches the First Simplified Embedded Finance Version

ConnectPay, one of the biggest EMIs in Lithuania, launched a simplified embedded finance version with built-in Strong Customer Authentication (SCA) module. It’s designed to simplify compliance with PSD2 regulations for B2C businesses in Europe and the UK, allowing companies to easily integrate mandatory authentication requirements, reducing operational complexity and preventing revenue loss from failed compliance.

Valued at $104.8 billion in 2024 and driven by the rising demand for seamless digital payments, the global embedded finance market is set to grow at a 23.3% annual rate through 2034. However, with this growth comes regulatory challenges—under the EU’s Payment Services Directive 2 (PSD2), businesses handling customer-initiated payments in Europe and the UK must implement Strong Customer Authentication (SCA) to prevent fraud and ensure security.

Failing to comply isn’t just a legal risk—it’s a financial one, costing businesses an estimated $2.6 million in lost sales every day.

As a response to this challenge, ConnectPay, a Lithuania-based provider of embedded finance solutions, has announced the launch of its built-in SCA module, designed to simplify compliance for B2C businesses operating under the EU’s PSD2. This new solution enables B2C companies to seamlessly integrate compliance features into their platforms, eliminating the complexities of regulatory requirements.

Implementing SCA involves incorporating at least two out of three authentication factors: knowledge (e.g., passwords or PINs), possession (e.g., mobile devices or hardware tokens), and inherence (e.g., biometric recognition). Ensuring compliance can be resource-intensive, requiring dedicated infrastructure, legal expertise, and ongoing maintenance.

“For many businesses, compliance with SCA is not just about adding an extra password field—it’s about managing sensitive data, integrating new providers, and ensuring the security of every transaction. Traditionally, businesses faced two costly options—developing their own digital infrastructure or outsourcing it to third parties,” said Marius Galdikas, CEO at ConnectPay. “Now, there’s a third option: embedded compliance. By integrating our built-in SCA module, B2C businesses can bypass the complicated requirements of SCA altogether. No need for additional user management or enhanced logging—we handle it all.”

This solution is particularly well-suited for businesses onboarding private individuals, where compliance requirements are unavoidable, but resources may be limited. Unlike regular embedded finance solutions that cater to more complex compliance demands, the built-in SCA solution will now provide a streamlined experience for businesses new to embedded finance.