We’ll also explore how businesses are leveraging the technology to enhance user experience, streamline operations, and even increase revenue. With cash being used less frequently across the globe and digital payments booming, embedded payments are an important part of a new wave of financial technology that is changing the way people buy. Customers now expect a seamless, intuitive, and fast customer experience whenever they use software. When software platforms offer more value to their clients through embedded payments, they make their marketing department’s job easier.

embedded payment systems

Co-owner Ben Nourse says Lightspeed Payments has streamlined the business’ checkout process, specifically in regard to their hardware. Their previous provider had unreliable equipment and customers often had to tap their cards more than once, Nourse says. With embedded payments, embedded payment systems on the other hand, payments are natively built into existing software. Businesses only have to deal with one system–no APIs and multiple vendors required. We’ll cover what you need to know about embedded payments, how they work, and what they can do for your business.

The growth of embedded payment solutions

The monumental shift to a seamless cab-hailing experience set a new precedent for travelers, transforming the entire industry. Researchers estimate that the embedded payment industry will grow by 40.4% annually. Moreover, it should reach $124,755.7 million by 2022 and $380,573.2 million by 2029. Two of the most important considerations for customers making any kind of purchase are speed and convenience, so businesses that offer these things can become more attractive to consumers. And while 37% were considering becoming payment facilitators, the vast majority (88%) would opt to embed third-party technology into their platform instead of attempting to build their own payment facilitation solution. Fortis is a Payment Facilitator and ISO/MSP processing transactions for all major payment and banking networks.

embedded payment systems

Let’s look at two businesses that use the embedded model to better their business operations. There’s so much more that goes into payment processing than we realize, but embedded payments make it simpler. It’s obvious that fintechs aren’t the only ones looking for access to financial services anymore—however, the technology has historically been inaccessible, even between leading financial institutions themselves.

Run your business more efficiently with embedded payments

As the eCommerce sector continues to rapidly grow and expand across the world, the greatest revenue opportunity isn’t for the merchants — it’s with software platforms. Embedded payments, which is the integration of payment functionality directly within a software platform, is a major subset of the embedded finance opportunity, estimated to be worth $7.2 trillion by 2030. Other companies are looking to embedded solutions to make their B2B payments more efficient, but it is essential to consolidate these emerging technologies in a single platform that offers a transparent view of all data. Reliance on siloed systems to conduct different types of transactions or manage vendors and business partners simply will add back the complexity and time companies are attempting to reduce. It offers massive potential for fintech companies to work with non-financial businesses to develop and expand the market. The embedded payment industry’s rapid evolution will occur over the next 4 to 8 years as investors continue to pour money into the sector.

Embedded payments represent another great leap in payment technology, taking digital payments to another level of convenience. Now, customers can simply click one button, and the system, which is linked to their card, bank account, or digital wallet, will process the purchase near-instantaneously, expanding the range of payment options for consumers. Software companies that want to embed payments into their platforms must decide whether they want to shoulder all that burden themselves or partner with a third-party payments provider that can offer them an embedded payments solution. There is also the revenue that comes with added growth, as embedded payments attract new clients interested in the functionality.

How does embedded payment work?

It opens up new revenue streams that will help your platform thrive in a changing landscape. Embedded payments and integrated payments are terms that are sometimes used interchangeably, but they are distinct. The key in modernizing your operation is to not be afraid of trial and error. Many companies get caught up looking for the perfect solution, only to dedicate an exorbitant number of resources to implementing something that ultimately doesn’t work.

embedded payment systems

Transitioning historically manual processes to digitally enabled solutions rapidly is becoming a must. In sum, payments no longer stand out as a specific step that customers need to navigate to place their order. Embedding payments deeply into the architecture of an app or website means that the customer is more aware of the product or service they’re purchasing – and not what it’s costing them to get it. This means customers can make fast, simple payments enabled by NFC (near-field communication) technology at quick-service restaurants and retailers. According to a study from Juniper Research, revenue from embedded payments is set to grow by 84% in the next four years. That will amount to $59 billion worldwide by 2027, compared with $32 billion in 2023.

European Central Bank working on prototypes of digital Euro interfaces

To summarize, embedded finance is set to become the norm for businesses everywhere. Instead, businesses of all sizes can take advantage of embedded financial solutions to deliver exceptional customer experiences. Embedded payments enable fast, easy transactions for businesses and their customers, and that can be related to hardware.

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. The embedded finance industry is growing, so business leaders should keep an eye on some of the most promising trends. This article should be valuable to small businesses that want to focus on implementing innovative trends and staying competitive within their industries. The journey to the common use of embedded finance has been truly transformative for businesses.

Embedded payments compared

Our guide explains features to look out for, how to find hidden fees and more. According to market research firm Future Market Insights, embedded finance is set to take off in the next 10 years, from $63.2 billion in 2023 to $291.3 billion in 2033. Access a complete payments platform with simple, pay-as-you-go pricing, or contact us to design a custom package specifically for your business.

The growth of embedded payment systems isn’t just a testament to the rapid developments taking place in fintech, but a seismic shift in how both consumers and merchants conceptualize the limits of the brand experience. 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. The first step is to check how many payments are currently being processed and how much that’s costing the company. No matter the location or industry, I believe any growing business processing $50 million in monthly transactions should pursue embedded payments.

Out-of-the-box embedded payments:

As consumers become more comfortable using apps for payments, this sector will only continue to expand. Companies that utilize the embedded payment system can generate millions of dollars in revenue. This is where the fusion of embedded payments and deferred payment plans such as Buy Now, Pay Later is a powerful value proposition for customers. Popular BNPL programs such as Klarna and Affirm enable merchants to embed their tools directly into the checkout so that customers can pay for their purchase in installments. Because embedded payments decentralize the often-stressful checkout experience within ecommerce, it removes much of the friction involved with making digital purchases. In the era of mobile shopping and on-the-go transactions, this is an invaluable tool to get conversions over the line that you could lose otherwise.


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