Embedded Payments: What Are They?

Some financial institutions have begun referring to themselves as “tech companies.” It reflects the widespread excitement about the fintech revolution in the banking industry. However, behind the scenes at most U.S.-based financial institutions, a revolution known as payment transformation is actually taking place. 

Digital transformation has become a buzzword, yet discussions on the concept have sometimes lacked depth. Perhaps it’s because payment transformation isn’t immediately obvious to the average customer, unlike a new and improved mobile app or user interface (UI) for a website, that we don’t hear much about it. 

Rather, the user-friendly nature stems from the integrated payment processing.

What are Embedded Payments? 

Embedded payments are, in the simplest terms, a bank’s internal money-movement features made available to upstream apps (such as a mobile app or a bank website) so that a user may complete a transaction. Incorporating the potential for Fintech businesses or new economy digital players (such as Uber, GrubHub, etc.) to take control of those tasks and incorporate them in their user experiences is where the actual value lies for the bank. For instance, with integrated payments, users may link and remember various payment methods for quick and easy access. 

The user is unaware of the payments being made on their behalf. The exchange of money is an automatic byproduct of their relationship. In recent research, 47% of small and medium-sized businesses said they would pay the same or more for embedded finance solutions as those offered by conventional banking institutions.

When seen from the financial institution’s perspective, embedded payments are a genuine innovation facilitator. The market and I frequently find ourselves discussing the realm of the conceivable when we discuss applications for real-time payments. What experiences may be built on top of the money transfer capability made possible by speedier monetary transactions rather than focused on financial transactions themselves? It’s an essential component in revamping the complete product line. 

Look at the areas where you can go above and beyond the batch-based or paper-based banking solutions of the 20th century, which were constrained by analog-digital money transfer capability. Start catering to what your clients really want and need by providing them with goods that do more than merely move money from one account to another.

The Advantages of Embedded Payments

Users and merchants alike may get several benefits from embedded payments. Because of this, they are rapidly becoming usual in our everyday life. The seamlessness of the user experience is one of the main advantages. It eliminates the need to physically visit a bank for banking services like loans and credit. It’s also a good fit for the time- and convenience-obsessed Millennial and Gen Z clientele. It aids companies in gaining insight into customer wants and needs. 

Compared to traditional invoicing, embedded payments result in faster cash flow for firms. In addition to boosting sales, the availability of more finance options and a faster purchasing procedure boost consumer happiness and brand loyalty. 33% of companies see the need to improve the customer experience as a motivation for a quicker implementation of integrated finance, 26% indicate the need for financial services, 22% list it as part of their intended business model, and 17% note the need to accelerate new income streams for growth. Only 2% of respondents cited imitation by a rival as the motivating factor.

Real Life Examples? 

By analyzing payment data, Uber can help financially strapped drivers keep making money by providing them with a fuel assistance program.

With Apple Pay, purchases can be made without pull out your wallet or carry credit cards.

Shopify’s sub-merchants can access payment processing and financing through the platform.

With Tesla’s insurance program, clients may get coverage quickly and easily, cutting out the middleman (insurance agent or broker). 

The fuel for the digital transformation journey is embedded payments. The IDIC forecasts that by 2030, 74% of digital consumer payments worldwide will be processed on platforms operated by nonfinancial firms, signaling fast expansion in the sector. In that case, why delay any longer?


UniPay provides businesses of all sizes with a high-quality payment processing experience through several deployment choices, including a flexible “payment as a service” model, affordable on-premise software, and a white-label payment gateway.

.Fill out the form at the link for more details about our white-label payment gateway or to arrange a product demonstration.

Last but not Least.

Consumers may not be aware of the profound impact embedded payments have had on the banking and finance sector. It entails making a bank’s money-moving features available to downstream apps so that customers may do business without considering how their money will be transferred.

In addition to improving the user experience, this invention helps companies save time when accepting payments, learn more about the customer’s purchasing habits, and win their patronage. The advent of embedded costs has sped up the digital transformation process, allowing companies to rethink their product lines to better meet their customers’ demands. Real-world examples, including Uber, Apple Pay, Shopify, and Tesla, illustrate embedded payments’ potential for inspiring novel approaches. 

Embedded payments are likely to become increasingly popular as the sector develops, with nonfinancial firms playing a crucial role in expanding digital consumer payments. UniPay’s white-label payment gateway and on-premise software solutions provide high-quality payment processing services and are scalable to meet businesses needs. Fill out the form to schedule a demo. You’re missing out on a massive opportunity if you delay adopting the payment method of the future, embedded payments.


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