6 Reasons to develop embedded payment solutions

Embedded payments seamlessly integrate financial services into unexpected places, like a coffee shop app offering 1-click payments or a department store's credit card.

Successful embedded payment solutions meet customers where they are with the financial options they need, whether a payment program, insurance plan, or a loan.

Every company has the potential to become a fintech company with embedded payments, which is only one reason why businesses are tapping into this massive economic opportunity.

In the coming years, embedded payments are expected to generate $384.8 billion in revenue by 2029, an almost 17-fold increase from the $22.5 billion in revenue produced in 2020. Embedded payment solutions present massive opportunities for fintech companies, businesses, and consumers. Keep reading to discover:

Embedded financial solutions: 4 types

Embedded financial solutions offer enhanced efficiency and convenience in financial processes across industries and improved user experiences and most commonly look like:

1. Embedded payments make it easy for customers to pay for things online without hassle. For example, digital wallets and instant payments allow users to pay for a company’s services, reimburse their loyalty points, or find applicable coupons without leaving the company’s website.
2. Embedded insurance enables customers to purchase insurance as an add-on to their desired product or service, whether a customer is renting a car or buying an expensive new toy.
3. Embedded lending is the“buy now, pay later” offering we always see. It lets customers make purchases and pay for them later in the future - all on the same page and within a few seconds.
4. Embedded investing and wealth management on health benefit providers’ websites and apps tracks benefit balances. It offers users opportunities to buy into various investments and financial and wealth management advice.

What is embedded payment?

Embedded payment solutions include integrated payment modules in e-commerce platforms, payment processing APIs in mobile apps, and checkout systems in software as a service (SaaS) applications.

These solutions cater to various industries and use cases, providing a convenient and efficient way for businesses to handle transactions within their ecosystems.

Consider the following: it's a lazy Sunday afternoon, and you're in the mood for your favorite coffee from your favorite coffee shop; however, the lines on Sunday are enough to make you want instant coffee at home.

This Sunday, however, you notice a new feature on the coffee shop app: a 1-click payment option, allowing you to pay for your order directly through the app. Your payment is processed instantly. There is no need to enter card numbers, confirmations, or additional information. The entire transaction happens seamlessly within the coffee shop app, and your coffee is ready and waiting for you when you arrive.

In this scenario, the embedded payment solution made the payment process quicker and hassle-free, adding a layer of convenience to your coffee-buying routine. Embedded payments enhance the customer experience and encourage loyalty through the convenience of integrated financial tools.

6 Key considerations and benefits for developing embedded payment offerings

If you're unsure or starting to think about developing embedded payment solutions, there are six key benefits to consider:

1. Seamless integration: Embedded payment solutions are tightly integrated into the user interface of the hosting application or platform. This integration ensures a smooth and consistent user experience without redirecting users to external websites for payment.
2. In-app payments: Users can make payments directly within the application or platform without navigating to a separate payment portal, particularly in mobile apps, e-commerce websites, and other online services.
3. Customization: Developers can customize the appearance and behavior of the payment interface to align with the overall design and branding of the hosting application, which helps maintain a cohesive and professional look and feel.
4. Enhanced security: Embedded payment solutions leverage secure technologies to protect sensitive financial information, including encryption, tokenization, and compliance with industry standards to ensure the security of transactions.
5. Faster transactions: With embedded payments, users can complete transactions more quickly and efficiently, as there is no need to switch between different interfaces or enter payment details multiple times.
6. Better user experiences: Keeping the payment process within an application or platform improves the overall user experience and can lead to higher conversion rates and increased customer satisfaction.

Vega IT: Your strategic partner for developing embedded finance offerings

Vega IT has a wide range of FinTech projects across Europe; this extensive experience in the tightly regulated FinTech sector has enabled Vega IT to develop a deep expertise in this field.

Embedded payments rely heavily on collaborations between various entities, such as banks, retailers, and API/platform providers. Experienced partners, like Vega IT, can help minimize risks and ensure the smooth integration of technologies for successful embedded payments development. Vega IT boasts domain experts who understand the value chain, reducing potential operational risks.

If you are ready to learn more about how we can help or take the next steps—Let’s connect and chat about how we can partner to bring your business goals to life.