How Offering Embedded Payments Could Help Your Business

  • By:R G

To name one recipe for success, life science-focused software provider Veeva is adding services that help healthcare salespeople and administrative staff, not just nurses and clinicians. Its recent acquisition of healthcare events management and payment company Physicians World is a harbinger. This move embeds payments for customers working in the burgeoning healthcare events space, manages multiple merchant relationships and automatically complies with relevant regulations. This helps companies recoup significant revenue otherwise lost in payment processing fees paid out to third parties. For every $100 million processed, businesses can realize an additional $3 million in revenue, according to current payment processor rates. Outside the accounting department, this means your engineering team can refocus on core products.

  • More broadly, most embedded payment solutions allow businesses to securely store customers’ cards on file for future purchases, recurring payments and subscriptions, which eliminates the need to enter payment details for each purchase.
  • They should also clearly see the impact that a significant increase in customer demand for integrated banking experiences will have on their businesses.
  • The APIs that power embedded payments are extremely versatile, which gives developers the flexibility to insert virtual cards into an almost unlimited number of applications.
  • While embedded currency exchange is yet to materialize, you can start offering your business customers an embedded financial experience today, by partnering with CrediLinq.Ai.
  • A reported 76 percent of consumers were confused by bills from their health care providers in 2015.
  • According to research from JP Morgan, software platforms that embed payments see up to a 5-time increase in value per client.

The platforms that took shape earlier in the millennium go back to the days when there were no DoorDashes or Instacarts, where there had been no need to issue virtual cards to consumers. Embedding cross-border purchase and payment options within the current workflow of global businesses will bridge a great deal of challenges for both the businesses and their employees. Over the last couple of years, embedded finance has grown to such popularity that today, it has become a standard function for both businesses and customers across the world.

Account Questions

Depending on who you speak with, embedded payments may be described as an e-commerce operation or a CX strategy. Either way, it highlights the shift in e-commerce toward faster, effortless purchasing experiences for customers. The next decade should crown a new crop of successful, verticalized software providers. Owning a ready-made embedded payments platform can lower e-commerce costs and offer complete control for verticalized software providers. Until recently, building an embedded payments system—meaning a company builds and manages its payments software—was a Herculean task. As I shared in October, verticalized software companies making the switch themselves would need to spend between $3 million and $5 million over two to three years of upfront work.

As more and more industries expand their digital services and seek to take advantage of embedded payments, the need for an experienced payments partner increases. Partners like BlueSnap are helping many different software platforms overcome the daunting technical and knowledge requirements of embedded payments. Every day, advances in digital business narrow the gap between consumers, merchants and financial institutions, whether the model is B2B or B2C. Embedded finance accelerates this alignment by blurring the lines between ordering and payment. Merchants using embedded payments can deliver a one-click, no-pay experience that transforms customer relationships and builds priceless brand loyalty.

Talk to your account manager for more information and about how embedded virtual card payments can help you grow your card program. Pairing A2A or embedded payments with an ERP system is one way businesses could solve both friction points, offering swifter solutions to clients while being able to manage attached details seamlessly on the back end. ERP systems are receiving more attention as AR and AP professionals look to upgrade these processes, with 79 percent of companies claiming that ERP integration is one of their organizations’ highest goals. The most significant trend is that customers increasingly seek simple, holistic, embedded, and direct experiences. Customers, according to our research, are flocking to these multiproduct customer experiences, known as ecosystems. By definition, ecosystem orchestrators seek to offer as much integration as possible, so an embedded integrated financial offering fits the model perfectly.

This doesn’t include ongoing maintenance of the system, which adds an additional $2 million annual price tag. It’s no surprise that this approach didn’t take off outside of a handful of truly massive companies that could afford the investment. As Matt Harris of Bain Capital Ventures—an investor in our company—points out, embedded payments can also turn simple financial functions with customers and sub-merchants into nuanced, data-rich relationships. The intel these relationships provides offers risk reduction, better cross-sell and prequalification.

They can optimize their infrastructures and add new products or services to their networks. As MacIlwaine pointed out, modern use cases demand that companies be able to tap into modern platforms to develop new services and products with speed and flexibility. Along the way, connected economies take shape, where consumers move seamlessly through their daily lives, picking and choosing among loyalty programs and cards that span their favorite retailers, restaurants and providers.

What are Embedded Payments

This trend reflects the increasingly severe consequences of lagging payments and outdated infrastructure on firms’ business relationships as well as their own bottom lines. Our modular backend design provides the foundational building blocks to make almost any implementation seem like a turnkey solution. And our payments consultants can help you determine the most appropriate implementation — now and down the road, giving you a spectrum of options to choose from. That can seem like a lot of work, especially for ISVs that are already scaling their development roadmap, putting out new features and new products, and trying to improve their customer experience. Let’s say you originally developed your solution to work with an off-the-shelf third-party payment processor.

The Next Step for Embedded Finance – FX and Cross-Border Payments

Third, assess the industry-specific opportunities in embedded payments like highly specific operational issues. An embedded payments system should always include greater control over cost and underwriting of services. For rideshare companies, for example, an embedded payments system should provide robust data and reveal common problems for drivers.

The following Deep Dive explores how enterprise resource planning 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. Pairing ERP with other technologies, such as the cloud and automation, could bring further benefits to companies as they look to innovate their B2B payment operations. Klarna is one example of an online financial services provider that offers lending. Their retailer partners will offer a financing option during checkout, and the purchaser fills out a simple application for financing. Ecommerce is booming like never before, making embedded payments central to merchant success.

The most crucial asset for any modern business is its data pool and embedding cross-border payments will help businesses further this to a significant extent. U.S. bank’s AP Optimizer is a modular accounts-payable solution that integrates into a business’s ERP or accounting system. As a result, treasury-management departments can automate invoice processing for business and consumer payment disbursement within Dynamics 365.

The global digital payments industry is expected to jump 40% from the last two years (reaching $6.6 trillion in 2021), and the mobile payment segment is expected to almost double by 2025 according to This next decade will bring the embedded payment infrastructure to the forefront of the industry, spurred by recent world events like the COVID-19 pandemic. Having spent the last 20 years immersed in the world of financial and payables processes, my career has almost come full circle.

Embedded Finance – New Opportunities in Business Commerce

Embedded payments let you skip the added steps, instead providing a single, clickable button on your app or website. The customer chooses the payment method of their choice, such as Klarna or PayPal, and clicks the embedded link to finish the transaction. Goldman Sachs predicts $1T in global value will be unlocked over the next decade through modernizing B2B payments and financial systems. Factors contributing to this growth include payment services that efficiently accelerate cash flow while effectively bridging long outstanding gaps within legacy financial institution systems. While embedding payments isn’t necessarily for every software provider, it is a natural next step for many who are looking to grow alongside their customers as indispensable partners. For example, payments are integrated with patient portals, so users can make payments at the same time they’re reviewing lab results or scheduling future appointments.

With the company’s kiosk solution, patients can pay co-pays and account balances while checking in for an appointment. Highnote, with a “horizontal” focus, gives developers the flexibility to customize payments and offer, for example, earned wage access across general-purpose, reloadable cards. It’s become a truism in commerce that the payments experience can be a competitive advantage – or a disadvantage. Embedded payments can also be used to collect the portion of a doctor’s bill not covered by insurance by sending the patient a digital invoice with an embedded payment option, which speeds payment and improves cash flow. Check that the payment facilitator has built-in tax compliance and regulation solutions to ensure you’re in compliance with all regional requirements. A good payment partner will offer frictionless and efficient onboarding, have the capabilities to handle the necessary paperwork and compliance matters and can manage all current and future KYC and AML requirements.

Businesses are shifting their invoicing tools to virtual methods and are relying upon online databases and workflow platforms to support faster payments and more satisfactory relationships with their clients. Integrating embedded or A2A payments within ERP systems therefore should be a top priority for companies across industries. The beauty of embedded payments is it feeds into customers’ need for instant gratification. When it’s that easy to make a purchase, there are fewer opportunities for the customer to talk themselves out of it. And if a solution offers buy now, pay later as an option, even the most frugal customer will be tempted to simply tap the “buy” button. Out of all the embedded commerce software solutions, payments are the most in demand.

What are Embedded Payments

Additionally, if you’d like to give merchants an experience that aligns with your core software, we can help you white-label your Tilled platform and merchant application to include your branding and logos. Embedded Insurance allows merchants to offer their customers insurance for the goods/services they buy directly from your platform. The COVID-19 era disclosed a new range of possibilities, given that most customers have been spending time online in a digital world. Consumers have a big demand for digital services that enable them to access various things without going to a physical location. Business-to-business is an application that aims to streamline business operations, simplify complex business processes, and meet specific industry needs.

Embedded Payments Benefits Supplier-Buyer Relationships

The hunt is on for solutions and technologies that can help streamline B2B payments, from automating historically cumbersome processes, such as invoicing or data collection, to researching newer, speedier payment methods. The ease of embedded payments purchases and the fact that transactions are essentially invisible to the customer reduce barriers to buying. Customers are more likely to make on-the-spot decisions, which means fewer abandoned carts and higher conversion rates.

What are Embedded Payments

Cross-selling those customer bases with tailor-made embedded payments platforms can cost verticalized software providers virtually nothing while tripling or quadrupling their total addressable market. Many software companies are addressing this by becoming payment facilitators and embedding payments directly into their own software products. They are building payments in – developing a seamless product – rather than simply bolting them on. Embedding payments in their software platform allows their customers to have one cohesive experience between all aspects of their platform. The embedded payments industry is growing at a rapid pace, with revenues expected to grow from $43 billion in 2021 to $138 billion in 2026. Payment acceptance is different from functions of core software such as sales, inventory or staff scheduling.

In 2027, revenues from embedded financial services, which includes embedded payments, is expected to exceed $183 billion globally, up from $65 billion in 2022, according to Juniper Research. That growth will be driven largely by non-financial businesses incorporating embedded-finance options into their apps or digital products, Juniper notes. The options will usually be woven into the checkout process, according to Juniper.

According to this strategy, a bank or a financial institution lends money to the client while also transferring the full amount to the merchant. The customer must pay 25% upfront and follow a fixed payment schedule in the future. Typically, clients have to pay within a few weeks or months, in contrast to credit card payments, when clients pay a fixed amount each month for a longer period. While embedded currency exchange is yet to materialize, you can start offering your business customers an embedded financial experience today, by partnering with CrediLinq.Ai. Get in touch with us to know more about how embedded finance can delight your customers and improve your platform’s stickiness.

Making it work will require new technologies and capabilities, because BaaS is usually distributed to clients via APIs and requires strong risk and compliance management of the embedded finance partner. Over the past decade, financial technology has continued to evolve to meet the needs of customers and merchants alike. With embedded finance, sometimes called integrated commerce, and in particular, embedded payment technology, merchants and software providers can take another step toward seamless customer experience and improved retention. In fact, there are multiple commercial and technical models that have emerged to support various business scenarios. Jumping into the deep end of the pool too soon could backfire, causing you to lose focus on your core software, alienate customers and waste time and money. It’s important to understand the differences so that you can choose the model best aligned with your maturity, resources, and customer profiles.

With embedded payments, the payment aspect becomes so seamless and integrated into the customer experience that it almost becomes invisible. You offer a “pay now” button or payment portal that allows your customer to use whichever payment method they prefer—ACH, bank-to-bank transfer, credit cards, and so on. Software companies that address the needs of particular industries are poised to win big. The towering, one-size-fits-all SaaS behemoths still hold most of the market share but can’t offer the same ground-level industry knowledge of smaller, verticalized competitors.

In addition to increasing revenue, embedding payments also allows software platforms to own their payment experience and enhance the value of the platform for their clients. The line between embedded payments and banking has blurred as payment-centered apps add on new features. PayPal, for example, allows users to store cash on a PayPal debit card as well as open PayPal credit accounts, in addition to facilitating payments.

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