A Quick Guide to the What, Why, and How of Embedded Payments
Digital finance solutions, such as embedded payments, have made the movement and management of money less complex and timely. Having to wait days to access transferred funds is now an exception, not the norm.
Today’s fintech solutions are changing business processes for the better; they’re enabling companies to streamline payment solutions and meet customer expectations more easily.
Embedded payments, in particular, are empowering these transformations. With these solutions, businesses can integrate payment solutions directly into their digital platforms, making way for smoother, more seamless financial operations.
|
“Embedded payment solutions reduce the amount of friction commonly associated with building robust financial operations and capabilities. They make them easier, faster, and efficient – while complying with the necessary security and regulatory requirements,” said Lee Cocking, Chief Product Officer at Cybrid. |
In this article, we’ll explain what embedded payments are, how they work, and why they’re increasingly used by modern businesses.
What Are Embedded Payments?
Embedded payments are digital solutions. They allow businesses to enable the flow of funds directly from their platform – without needing to build the infrastructure themselves. These solutions use APIs (Application Programming Interfaces) that embed directly into a company’s digital platform, such as an online storefront or customer portal.
With an embedded payment service, businesses can enable various digital payment options quickly, securely, and with minimal setup.
Some examples of embedded payment systems, and how they are used include:
- Online checkouts. Consider an online store’s checkout process where payment is completed right from the checkout page. There are often multiple payment options, such as digital wallets, credit cards, debit, and others. Being able to execute transactions from a store’s checkout page is the result of an embedded payment service.
- Peer-to-peer transfers. Sending and receiving cash to and from friends, family, or for non-business payment, such as purchases from a social network, is easier when there’s a digital option. Embedded payment products geared to P2P transactions, like Venmo for example, make these transactions seamless, safe, and are instantaneous.
- Crypto payments. Platforms like Cybrid enable businesses to accept cryptocurrency payments directly on their websites by embedding the entire crypto transaction process into their checkout systems. This makes it easy for today’s 90+ million cryptocurrency users to pay with digital currencies.
What Embedded Payment Solutions Mean for Businesses
On the surface, embedded online payment solutions serve to simplify and expedite the movement of payments and funds – which is undoubtedly true. However, they do more than that.
In addition to making payments easier, faster, and less convoluted, they provide the infrastructure businesses require to facilitate safe, compliant financial services. Infrastructure is built within a secure foundation that businesses can use to enable convenient quick, seamless digital transactions from within their own website, software solution, or platform.
The core of embedded payments (and embedded finances) is its ability to securely integrate financial processes into a platform’s existing operations. They become the secure and compliant backbone that payments and financial processes can operate from.
Why is this so attractive to businesses? There are multiple reasons, but 4 of the most common ones include:
- Customers want more financial transaction options. Businesses lose up to 10% of international revenue by not offering preferred payment options. Embedded payment solutions can close that gap and ensure customers can access the payment options they’re looking for.
- Building financial infrastructure from scratch is expensive. It costs millions to build a secure, compliant financial system - a price tag that’s too steep for younger or smaller businesses. However, not offering embedded payments to customers can cost more than that in the long run.
Using a third-party embedded payment system allows businesses to access the right infrastructure and offer customers the financial options they demand at a much lower cost than developing it themselves.
- It takes years to build financial infrastructure. The time needed to develop a foundation similar to those in established embedded payment solutions can take years. An embedded financial system allows businesses to access a mature, well-developed financial infrastructure in a matter of weeks.
- A robust financial infrastructure is a competitive advantage. Being able to accept the digital payment types your customers, vendors, and stakeholders want gives your business a competitive advantage. Small businesses that offer multiple payment solutions can boost revenue by nearly 30%.
Access Compliant, Secure, and Seamless Payment Solutions
Partner with an embedded payment company that turns finance processes into opportunity.
How Does Embeddable Payment Processing Work?
Integrating embeddable payment and financial processes into a platform takes a few key steps. Here’s how it works:
- Integration: The business embeds payment APIs into its platform, connecting to payment gateways and financial institutions. Depending on the provider, there will be different customization options so the solution can be tailored exactly to a company’s needs and use cases.
- Payment options: Customers are offered various payment methods, such as ACH transfers, digital wallets, credit and debit cards, or wire transfers. This can be done using multiple embedded payment providers, or one that can handle all of them.
- Transaction processing: Once a financial transaction is initiated, like payment for a purchase or subscription, the system securely processes the transaction and transfers funds to the business's account.
- Compliance and security: The embedded system handles necessary compliance and security protocols, ensuring that transactions are secure and meet regulatory standards.
Beyond Retail Payment: Exploring Embedded B2B Payments
It’s easy to see how embedded payments are crucial for online retailers and ecommerce transactions, but there’s more to them than that. Embedded business payments play a critical role in helping B2B companies facilitate better financial operations and stay competitive too. In fact, B2B companies are fueling the embedded finance industry, which is expected to be worth $228 billion by 2028, a staggering 148% increase from its $92 billion valuation in 2024.
Below are three real-world examples of how B2B companies are enhancing their payment processes using embedded solutions.
1. Fintech Start-Up Accelerates Growth
Consider a fintech startup that exists solely online and needs a secure, digital solution to enable payments from their clients. Instead of building payment processes and compliance systems from scratch, the startup can integrate an embeddable solution that handles security, compliance, and transaction management.
This approach would allow the company to launch faster, offer secure payment options to customers, and focus on innovation. By leveraging embedded payments, the startup could compete effectively in their industry without getting bogged down by the complexities of payment infrastructure.
2. International Tuition Payments
Colleges with international students and faculty could potentially use an embedded payment solution to embed cryptocurrency payment options into its billing system. By allowing cryptocurrency payments via an embedded payment API, the university could bypass the delays and high fees associated with traditional international bank transfers.
This solution would make it easier for students from different countries to settle their tuition payments quickly and securely and for international faculty to get paid more easily. Additionally, the university benefits from faster processing and reduced administrative burden.
|
Read these next: |
3. Simplify Subscription Payments for SaaS Clients
A SaaS company could use an embedded payment solution to simplify and automate recurring subscription payments and renewals. By setting up recurring billing, with an embedded business payment service, the company could ensure that clients are billed on time and payments are collected seamlessly.
This setup would enable the business to capitalize on subscription-based payments, automate recurring payments, and free up the team to focus on growing the business, while clients enjoy a smooth, hassle-free experience.
Explore Embedded Payments with Cybrid
Embedded payments are the future of modern business payments. By enabling quick access to compliant, secure, and diverse payment options, businesses can optimize their payment processes more quickly, easily, and with much less investment and hassle.
At Cybrid, we help businesses leverage innovative finance solutions to drive revenue, growth, and ongoing success using embedded solutions backed by thorough, comprehensive, and secure infrastructure.
To learn more on our payment orchestration platform, visit our website. Ready to see Cybrid in action? Book a meeting with our experts.
Lee Cocking, Head of Product @ Cybrid
