In many cases, this recurring revenue stream leads to investor interest and higher valuations. 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.
George Baily, Product Marketing Lead at Weavr.io, uncovers how traditional businesses can evolve into profitable fintech platforms through embedded finance in the short video below. Echoing Angela Strange’s belief that “every company will be a fintech company”, we see this trend and use cases manifested in giants like Apple, Uber, and Starbucks. These companies have significantly elevated the consumer experience by seamlessly incorporating financial services into their operations. Embedded Buy Now Pay later programs are forecast to account for just over 50% of the embedded finance market by 2026, driven by the rapid adoption of BNPL and the expectation that online retailers accept deferred payments.
Do embedded payments make sense for your business?
Even if the original platform (e.g. a CRM or workflow building app) is licenced, there’s no way to tap into that payment method to add authorised charges to a bill. Every single payment is fraught with administration, resulting in costs, delays, and complexity around even simple requests. Paying for digital products and services is typically about finding a way for the business to move faster. In practice, all the bureaucracy makes businesses move slower and incentivises lower quality, less https://www.globalcloudteam.com/ scalable “free” solutions. In this guide to embedded finance for business payments, let’s explore trends shaped by recent events, advances in technology, and how disruptive solutions such as embedded finance are becoming available to the more ambitious early adopter. In the same way that Uber users order and pay for their ride simultaneously, customers can place and pay for their merchandise simply by tapping ‘place order’ and saving potentially hundreds of carts from being abandoned.
Integration of biometric authentication, tokenization and advanced encryption methods can enhance the security of credit card transactions and instill customer trust. With increasing consumer awareness around these issues, brands can integrate credit card offerings with initiatives that align with these values. This can include donating a portion of credit card purchases to charitable causes or providing rewards for eco-friendly purchases. Swiping is no longer the only option with the advent of mobile wallets and tap-to-pay solutions.
Ready for Payments Modernization?
One of the most notable examples of digitization is in the fintech sector, particularly how traditional businesses engage finance on a new level by integrating financial mechanisms into their overall business plan. The era of embedded finance is taking hold, and with an estimated embedded payments trends market value of over $138 billion in 2026, it’s clear that it’s not just a financial fad, it’s the future. As I outlined in December, the most important considerations when preparing to transition over to embedded payments are processing volume and payments complexity.
By accessing the volume of users’ daily transactions and sales trends, platforms can offer embedded financial products tailored to their money flow and create an extra benefit for them to stay on the platform. This includes easily being able to open business bank accounts, access to the capital they need to grow, and branded business cards, directly through their platform. These trends are the result of digital platforms’ increased ability to embed payments directly into their website or mobile app, rather than redirecting customers to an external payment gateway. Making the purchasing experience a seamless part of your product experience has the potential to be a low-lift investment that can yield powerful returns. Not only do embedded payments help improve your customer experience and retention, but they also accelerate revenue growth. Both embedded payments and embedded banking fall under a broader fintech umbrella known as ’embedded finance’, which refers to a range of financial services that can be offered by non-financial businesses.
Features for Easy-to-Use Veterinary Payment Software
CGI brings four decades of deep expertise and industry knowledge to the payments sector. The breadth of the company’s offering, including consulting services and solutions, enables CGI consultants to support clients from strategy definition to solution design and implementation, to systems integration and operational support. As an independent technology partner, CGI All Payments is fully deployable on or across multiple ecosystems. Major banks are working with Oracle to improve the user experience and encourage virtual payment card adoption. HSBC is the first bank to embrace the solution and will offer the embedded virtual card experience to Oracle customers in the U.S. and U.K. For instance, contactless and mobile payments should be on brands’ radars as they consider launching or revamping their loyalty card offering.
- With the growth of banking as a service and open-access APIs, businesses now have the ability to leverage financial services technology to customize payment solutions for their needs.
- My work with incumbent banks suggests that more than two-thirds have undergone the digital transformation and modernization necessary to be competitive in BaaS.
- 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.
- Third-party embedded finance providers like Unit use Plaid to safely and securely gain access to the financial data they need to create and fund new accounts, plus gain deeper insights into things like balances and transactions.
- Companies can start by designing an embedded finance strategy that works for their needs.
These segments lead other products in terms of digital maturity, revenue generation, and use cases currently served. To meet the rising demand for embedded finance, financial institutions are increasingly offering banking as a service (BaaS)—bundled offerings, often white-labeled or cobranded services, that nonbanks can use to serve their customers. 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.
Selecting the Right Provider
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. According to our estimates, the market could double in size within the next three to five years. Third-party embedded finance providers like Unit use Plaid to safely and securely gain access to the financial data they need to create and fund new accounts, plus gain deeper insights into things like balances and transactions. It’s as if Plaid turns on the stream of user-permissioned financial data to these companies, then they transform it into embedded finance products and services.
When you pay at the online checkout of an e-commerce site, you use an embedded payment tool. Unit is an embedded finance startup offering companies an easy way to store, move, and lend money. Using Unit, businesses can build custom offerings that allow their customers to request cash advances, get a branded credit card, or track expenses.
The 2022 McKinsey Global Payments Report
With embedded payments, the entire transaction occurs within the platform, reducing the risk of users abandoning their carts due to a cumbersome payment process. Simplifying the payment process by embedding it within your platform reduces the barriers to completing transactions. Customers won’t be inconvenienced by re-entering payment information or dealing with unfamiliar interfaces. Embedded payment solutions are designed to be quick and secure, and that is something customers want. Customers appreciate the convenience of fast and reliable payment processing, which is essential for recurring customers who frequent the platform regularly.
WorkWave, which offers software for field service providers, enables workers to accept payments securely using mobile devices in the field. The company also offers online payment links so customers can pay immediately while viewing an invoice. Becoming a payment facilitator is the most complete way to embed payments into a software platform, as this model allows software companies to act as the payments companies. This gives them utmost control over the payments process from start to finish, enabling them to provide a truly embedded experience for their customers. For decades, payments have been the purview of large companies and payment processors.
Key decisions for embedded-finance market entrants
Many businesses have transitioned away from face-to-face transactions to online and in-app sales with embedded payments. The term is used in several different contexts, so what are embedded payments, and how do they work? This model involves working with a third-party provider who facilitates embedded payments and other financial services for businesses without requiring them to natively build and maintain the infrastructure required to run these services.