This can help to solve some of the challenges of embedding payments into a platform so you can concentrate on enjoying the benefits. Out of all the embedded commerce software solutions, payments are the most in demand. Around 83% of businesses want to offer integrated payment solutions within the next five years. The following Deep Dive explores how enterprise resource planning (ERP) systems can provide a platform for smoother AP and AR processes while also supporting emerging B2B payment use cases, such as A2A and embedded payments.
Everything is integrated into a single platform, improving efficiency and removing layers of complexity. This can help to free up internal resources that can be deployed elsewhere in the business. Additionally, the streamlined, less complex process can reduce opportunities for human error. Below, we’ll take a deeper look at embedded payments, what they are, how they work, and why they can be so beneficial for businesses and customers alike.
How to monetize embedded payments
In my experience, one of the primary benefits of embedded finance is its ease of use for consumers. By removing consumer pain points, such as the need to seek credit elsewhere, customers may be more likely to complete a purchase and experience customer satisfaction, which is essential in achieving brand loyalty. For businesses, this can lead to the opportunity to make an increased profit as consumers are more likely to purchase an item or service and return to do so again and again.
Keeping this information allows the company to offer its customers a one-click pay experience, ultimately building profitable brand loyalty. The growing need for convenient financial services and the increasing number of online transactions fuels the growth of platform ecosystems — just like the growth of the entire embedded finance concept itself. Although embedded payments might seem straightforward, there’s a very high burden of responsibility for merchants.
Best practices for choosing an embedded payments provider
With this in mind, it’s not surprising that a growing number of businesses are interested in becoming facilitators of the payment process. Any ecommerce merchant that’s tried to liaise with an external provider to solve an issue with a customer order, from a parcel carrier to a returns management provider, knows how time-consuming this can be. By the time a resolution is embedded payment systems found, that’s one fewer customer your business is going to retain. In the same way that customers will blame the brand and not the parcel carrier if their order is delivered late, merchants cannot simply pass off a failed transaction on a third-party payment platform as ‘not their fault’. The payment process when using these apps is so seamless as to be almost invisible.
For example, if payments are built into a merchant’s website, customers won’t be taken to a third-party checkout page that the business has no control over. Natively building and managing the infrastructure required to bring embedded payments in-house can come with a significant amount of risk and cost. Connect, often used in conjunction with other Stripe embedded finance solutions, is a way for platforms to benefit from embedded payments, without the workload and liabilities of building everything in-house. As a business, using embedded payments in your digital platforms can go a long way to streamlining internal operations by reducing the amount of work needed for payment processing.
The Power of AI and How It’s Transforming the Financial Landscape
Under the collaboration, customers will be able to use a fingerprint sensor in their car to make secure digital payments at more than 3,600 service stations in Germany. After refueling, the driver will see the amount of fuel refueled and the invoice amount to their Mastercard debit or credit cards on the in-car MBUX dashboard display. Payment will be made automatically, and the driver will be able to leave the gas station without having to walk to the checkout area. Fingerprint payments from the car will be extended soon to other vehicle-related services and to other European markets, says Franz Reiner, chairman of the board of Mercedes-Benz Mobility.
As businesses look to consolidate vendors, platforms that provide a robust offering of what they need, including payments, remain the more attractive option. The pressure clearly is on for organizations to innovate both AP and AR processes for smoother experiences, but this requires that CFOs and other decision-makers upgrade several of the steps and features involved for greater efficiency. Businesses also must be sure they can transfer the attached payment and client data just as swiftly as they can the actual funds in order for A2A or other instant methods to work as intended. Financial professionals are keenly feeling the need to improve their payment processes, with PYMNTS research showing that 93 percent of CFOs are in the midst of digitizing their organizations’ accounting operations.
Embedded payments: The next phase of CX management
Read more about the benefits of becoming a payfac or using a payfac-as-a-service provider, like Stripe. It’s also a tool for better understanding consumers and their spending habits and needs. Shoppers who are in this situation might well come back and complete the transaction later – or they may not. According to Baymard Institute, 18% of consumers cite ‘a long and complicated checkout process’ as the main reason for cart abandonment. SolutionSuggest.com is approved by Google News and we’re accepting in-depth guest posts from reputed SaaS companies, influencers and marketers.
- This helps companies recoup significant revenue otherwise lost in payment processing fees paid out to third parties.
- These benefits can give businesses an edge and help them provide a more convenient, secure, and successful service.
- The embedded finance market is slated to exceed $138 billion in 2026, up from $43 billion in 2021 per Juniper Research.
- Embedded payments are a CX strategy where financing and digital payment processing are integrated seamlessly into the ecommerce shopping journey, instead of being added on afterward in the form of a third-party payment provider or banking service.
- This is especially true for companies dedicated to serving specific industry verticals.
The speed and convenience offered can improve the customer experience and can be integrated across all customer touchpoints. The benefits of embedded payments are not just theoretical, they’re proven in practice by countless organisations and millions of customers worldwide, every day. The technology is not only a cost-saving or revenue-boosting measure for businesses but actually tangibly improves the customer experience as well, making it a win-win for both sides of the purchase.
Best Upcoming Embedded Payment Trends
They might experience an increase in customers while also receiving payments in full. This uninterrupted process defines the usability of embedded payment systems. From on-site order tracking hubs to in-app purchases via social media feeds, this growing interconnectivity across platforms and tools has made it possible for ecommerce brands to bring a greater range of functionalities ‘in-house’. This ecosystem minimizes disruptions to the customer experience and builds greater levels of brand trust.
Efficient, high-functioning payment solutions on platforms answer a growing need in the market. For many modern businesses operating in a digital age, embedded payment functionality can enhance the customer experience and improve conversion rates. It wasn’t so long ago that we relied solely on cash and checks to pay for everything. The next big step was the credit card and debit card, starting with physical payments, then technology started creeping in telephone payments, which carriers us right through to the 90s and early 2,000s. Choosing the right embedded payments partner significantly reduces the risk for software vendors by alleviating many of the responsibilities. That’s part of the reason why, in BlueSnap’s recent poll of technology leaders, we found that only 30% of respondents currently monetize payments through their own platforms.
What are embedded payments for platforms?
Emerging technology and growing user demand have opened a window of opportunity for platforms to provide the financial services that their users such as SMBs have been missing. SaaS platforms and marketplaces can take control of their payments offering by embedded payments and processing payments natively. Platform users can run their business, sell, and get paid all in one place without third-party redirects. The next decade should crown a new crop of successful, verticalized software providers. Third, assess the industry-specific opportunities in embedded payments like highly specific operational issues.