What are embedded payments and how do they benefit platform businesses?

There are multiple definitions of embedded payments. The first refers to embedded payments on ecommerce websites, where consumers choose their preferred payment method and pay directly through an embedded link, providing a single, one-click payment experience on apps and websites.

Embedded payments for platforms are similar in the sense that payments become an integrated part of the user experience. Rather than referring platform users to third party payments partners, platforms can make payments a part of their product offering by embedding them into their service.

Platform users need to process payments to run their business, for example, when they sell goods online. Rather than choosing and managing their payments providers themselves, they can turn to your platform directly for their payments needs.

Many platforms still rely on a referral or partnership model to supply payments to their users. Platforms refer their users to payment service providers (PSPs), leaving them to assemble solutions that fit their business and rely on third-party system integrators to accept payments.

This model is costly, time-consuming for both your users and your platform.

SaaS platforms and marketplaces can take control of their payments offering by embedded payments and processing payments natively. Platform users can run their business, sell, and get paid all in one place without third-party redirects.

The user benefits are pretty straightforward. Rather than spending precious time selecting payment providers, connecting payments to the platform they use to run their business, and troubleshooting with multiple support desks, they can set up payments in a single click.

Create new revenue streams with embedded payments

Embedded payments have a lot to offer to platform users. They uplift the user experience and reduce the vendors users need by at least one, since they no longer need to choose or manage a payments provider.

Offering payments to your users directly will increase user satisfaction and improve stickiness. Customer loyalty is only one side of the beneficial coin of embedded payments for your platform.

Offering payments as a part of your product suite opens up a whole new stream of revenue. Embedded payments already account for up to 80% of total revenue for some early adopters.

One of the biggest benefits of adding payments to your product suite is that you can monetize them as you see fit. Rather than receiving a set kickback fee from a payments provider, you decide how to price per payment and additional features.

Many platforms still use a referral model for payments. Because payments are provided by multiple vendors, there needs to be an integration for each. This often results in disjointed user experiences, lack of data insight, and the platform having less control of the user experience.

Platforms looking to evolve their product suite by offering native payments can go about it in different ways. They can choose an out-of-the-box embedded payments solution, or create a fully tailored setup. What setup your platform chooses, comes down to how much risk and responsibility you want to take on.

1. Out-of-the-box embedded payments:

This option is ideal for platforms that are looking to get up and running as quickly as possible. Out-of-the-box embedded payments require minimal integration efforts and developer resources.

2. Tailored embedded payments:

This option is more suitable for platforms that want to provide a fully customized payments experience offering. Tailored embedded payments give platforms full control over the integration.

Embedded payments pave the way for platforms to offer a complete suite of embedded financial services. Emerging technology and growing user demand have opened a window of opportunity for platforms to provide the financial services that their users such as SMBs have been missing.

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.

The SMB embedded finance market is still in its infancy, with less than 5% of SMBs sourcing financial services through platforms. But things are moving fast. Platforms that move fast with the right technology and partnerships will thrive, while those without will risk falling behind.

Adyen for Platforms allows you to easily embed payments into your platform or marketplace with our out-of-the-box solution or a fully customizable setup. Our ever-evolving technology helps your users sign-up, sell, and get paid in one place.

With our solution, you can:

• Onboard and verify your users quickly: Onboard sellers, service providers, or contractors onto your platform. We will verify them for you before paying out and inform you of the results.

• Process payments: Accept payments on behalf of your users. You can split the payments between one or more, deduct costs as needed, and hold funds until payout.

• Payout and transfer funds: Decide when and how your users are paid, on-demand or automated. Payouts are done in your users’ preferred local payment methods.