Lloyds embeds invoicing in its app via BankiFi to tackle late payments

Lloyds Banking Group is rolling out an embedded invoicing and payment-collection tool called Get Paid, built in partnership with Manchester-based fintech BankiFi, and set to launch before the end of 2026. The move signals a meaningful step in how incumbent banks are repositioning themselves: less as product vending machines, more as operational platforms for the businesses they serve.

The tool will let Lloyds business customers create and send invoices, issue secure payment links, and track outstanding and settled requests, all from within the existing Lloyds app and online banking interface. Crucially, it will be offered at no additional charge, removing the need for separate accountancy or invoicing software. BankiFi already powers Lloyds' Making Tax Digital for Income Tax functionality, introduced earlier this year for business current account holders, and Get Paid deepens that integration layer considerably.

Embedded accounting as a competitive weapon

The concept Lloyds is calling "embedded accounting" is not merely a feature update; it represents a strategic pivot in business banking design. By absorbing workflows that have traditionally sat in standalone software products, Lloyds is competing directly with platforms such as Xero, QuickBooks and FreeAgent for the attention and daily interaction of its small business customers. The prize is what BankiFi CEO Mark Hartley describes as "relationship primacy": if a bank becomes the dashboard from which a business manages cashflow, invoicing and tax compliance, customer stickiness rises and so does deposit retention.

Hartley put the strategic intent plainly: "Invoicing, getting paid and tax administration may not traditionally have been considered banking services, but they are fundamental financial workflows for businesses. By bringing these capabilities into the banking experience, banks can move beyond individual products and become more relevant to the way businesses operate."

The late-payment context gives the product launch urgency beyond the competitive. UK Government research cited by Lloyds found that 49% of small businesses report their customers routinely pay beyond agreed terms. The Office of the Small Business Commissioner estimates 14,000 business closures per year are attributable to late payments, and that UK firms collectively carry approximately £26 billion in overdue receivables at any given time, an average of £17,000 per business. Automated reminders and embedded payment links, the logic goes, reduce the friction that allows those receivables to age.

What this signals for the embedded-finance landscape

For the broader fintech sector, the Lloyds-BankiFi partnership illustrates a structural shift in how bank-fintech relationships are maturing. The first wave of open banking produced third-party aggregators and payment initiators sitting outside the bank interface. The emerging wave is one of deeper embedding, where specialist fintechs supply capabilities that banks then present as their own product surface, under their own brand, at no incremental cost to the end customer.

That model changes the economics of small-business fintech materially. BankiFi operates as an infrastructure partner rather than a consumer-facing challenger, which means its growth is tied to the distribution scale of institutions like Lloyds, which reports serving over one million UK businesses. For investors backing embedded-finance infrastructure plays, the partnership demonstrates that incumbents are willing to move faster on workflow integration than many previously assumed.

The second-order implication cuts across both the retail-banking and accounting-software sectors. If major banks systematically absorb invoicing, tax administration and cashflow analytics into their core interfaces, the addressable market for standalone small-business accounting platforms narrows. That is a capital-allocation question as much as a product one: investors holding positions in listed SME software businesses should be watching incumbent banks' embedded-accounting ambitions closely as the product category accelerates through 2027.