Understanding Embedded Payments A Detailed Guide
Checkout.com’s payment solutions leverage their expertise to optimize your checkout flow. With their integrated payment solutions, you can create a unique and custom built payment solution that suits your business needs to a tee. By adopting a headless commerce platform, a retailer can create a more relevant experience for its customer across the board, including payment.
Instead of dealing with the complexities (and regulations) related to online payments themselves, Checkout.com allows online companies to easily accept payments, prevent fraud, and keep payment secure. The company supports many different payment options, including credit, debit, and digital wallets, and also handles currency exchange, allowing businesses to transfer money from customers all over the world. Embedded fintech provides a way for financial institutions to offer a wider range of services, engage their customers, and deliver more value. Historically, if a bank wanted to offer a new product, say a new type of investment or a different type of loan, they would need to spend months, if not years, developing, building, and launching a new product. With the rise of embedded fintech, they can embed these offerings in their current products. This lowers the economic risks and allows traditionally slow-moving banking companies to become more nimble and adjust to changing customer needs.
Launch and scale fast by unifying your payments operations
Embedded payment solutions overcome this challenge with built-in onboarding capabilities. A link in the SMS or e-mail guides the policyholder through the onboarding process. Using their mobile device, the policyholder verifies their identity, reviews claim documents, provides a digital signature agreeing with the information, chooses a payment method, and inputs banking details. Lightspeed was able to provide its users with better offerings, build a stronger differentiation from competitors, and open up new revenue streams with embedded payments. They can now serve their users and the small to medium-sized businesses they run better. “Working with Datacap helps us to better serve our vertical software customers seeking to own their data and merchant experience,” said Nathan Lytle, Director of Partnerships, Infinicept.
With more companies acting as financial companies, financial providers will need to become more accustomed to sharing customers with non-financial companies for services only they used to provide. This will increase competition for traditional finance companies and may result in better products and better customer service. Embedded insurance at the in-store checkout is nothing new, but fintech has facilitated its spread to digital marketplaces. Embedded insurance allows users to purchase insurance on online purchases at the point of sale.
Enhanced Customer Experience
The global marketplace is booming, and businesses can use embedded payments to stay competitive. However, remember that with integrated payments, two separate providers are connected via APIs. Like embedded payments, integrated payment processing is a system in which your payment software communicates with your POS system to eliminate the need for manual entry, saving time and reducing human errors. Suppliers and individuals want a faster, more convenient, and more secure payment experience.
Platform users can run their business, sell, and get paid all in one place without third-party redirects. “Buy now, pay later” (BNPL) is one of the most visible forms of embedded lending seen by online shoppers. It appears during the online checkout process, at the moment consumers are contemplating their available funds, and offers to split the payment up over time. These offerings typically provide monthly or weekly payment installments over a predetermined period with no interest. Popular companies offering buy now, pay later solutions include Klarna, Affirm, and Afterpay.
Revenue and profitability
The two will be connected through APIs, but at the end of the day the business still has to rely on two separate providers. Leading solutions even provide payers with the option of allowing payees to set up their own preferences. And payees won’t have the jarring experience of being redirected to different portals for different payment types.
With payments natively built into the existing POS software, you’ve got a full view of your business and can adjust workflows as necessary. How do you decide which embedded payment provider is the best for your business? When customers are out shopping, for example, they probably don’t consider what goes into a transaction when they pay for something. Unfortunately, the experience that most suppliers and individuals have when getting paid by businesses is anything but that.
Out-of-the-box embedded payments:
Embedded payment systems can have big benefits for software platforms — if they are implemented the right way. A well-executed third-party solution makes it easy for software platforms to control the full experience, including embedded payment solution onboarding clients as merchants, accepting payments, executing payouts, and more. SaaS platforms and marketplaces can take control of their payments offering by embedded payments and processing payments natively.
- Embedded banking and embedded payments are both a subset of the broader category of services referred to as embedded finance.
- Suppliers and individuals want a faster, more convenient, and more secure payment experience.
- You can increase your revenue by collecting payment fees charged to your merchants.
- In these times when businesses are attempting to recover from these large losses, embedded payments represent an essential solution for the retention of clients, helping to strengthen customer loyalty and improve revenues.
- More than 300 leading software companies, payment processors, sponsor banks, and others rely on Infinicept to help them transform to the new era of software-led payments.
- Rather than choosing and managing their payments providers themselves, they can turn to your platform directly for their payments needs.
Third-party payment processors are not required with embedded payments so there is more control over transaction costs. Businesses can lower transaction fees and better control their payment processing expenses by processing payments in-house. Those of us who regularly utilize the services of e-commerce businesses can understand how lengthy and cumbersome their checkout pages can be. Embedded payments allow customers to skip the additional steps of the checkout and instead use a single-click button on the website or app that they can use to pay. In many cases, P&C insurers make electronic payments using standalone systems for each payment method. Most businesses make and receive payments using a hodgepodge of point solutions and closed-loop networks each with their own logins and passwords, account requirements, file formats, and proprietary integrations.
The future of embedded payments
In the past decade, B2B fintech solutions have become deeply ingrained with daily life. As financial institutions prioritize digital transformation over legacy systems, embedded payment technology is set to open doors for organizations of all sizes. There are many types of embedded finance products and services, including embedded banking (or Banking-as-a-Service), embedded payments, embedded lending, embedded investments, and embedded insurance.
With embedded banking, non-financial companies offer their users a branded checking account to hold funds and make payments. Embedded banking typically makes the most sense for sellers or service providers using a company’s platform to conduct business. It likely offers faster access to funds and perks that only platform users can access. Many factors are driving embedded finance, including the ever-increasing popularity of digital platforms and the growth of mobile commerce.
Ways Payees Benefit from Embedded Payment Solutions
An embedded payment solution provides clear benefits to accounts payable departments and other payers. For starters, accounts payable will spend a lot less time disbursing payments. But embedded payment solutions offer something for the suppliers and individuals who are getting paid, as well.