Payments embedded in a platform
Payments embedded in a platform
Payments embedded in a platform
Guides

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

Platforms are embedding payments at a growing rate. Learn about what they are and how they benefit your business.

April 17, 2023
 ·  6 minutes

Embedded payments are becoming a major selling point for SaaS platforms and marketplaces. By embedding payments into your platform offering, you gain full control over a functionality that’s crucial to the small and medium sized businesses (SMBs) that frequently use your platform.

SMBs are more than ready to use embedded payments. From research we conducted with Boston Consultancy Group (BCG), 69% of SMBs state that they’d change their payment processor if the solution were more integrated into their business process.

Embedding payments into your platform does more than attract and retain users. It opens up new revenue streams that will help your platform thrive in a changing landscape.

Before we dive deeper into the benefits of embedded payments, let’s start with the basics.

What are embedded payments for platforms?

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.

What are the benefits of embedded payments?

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.

Embedded payments compared

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.

Ownership over user experience

Referral model

No

Embedded payments

Yes


Access to users' payments data

Referral model

No

Embedded payments

Yes


Flexible monetization of payments offering

Referral model

No

Embedded payments

Yes


Upsell to embedded financial services

Referral model

No

Embedded payments

Yes

Platform examples of embedded payments

Before you decide whether embedding payments is right for your platform, let’s take a look at some examples of embedded payments done right.

Roller

ROLLER used Adyen for Platforms to streamline operations and more effectively meet the payments needs of their users. Their embedded payments solution ROLLER Payments allows users such as Scenic World to easily refund, upsell, and upgrade their guests, creating better experiences for visitors.

Lightspeed

Lightspeed was able to provide its users with better offerings, build a stronger differentiation from competitors, and open up new revenue streams with embedded payments. They can now serve their users and the small to medium-sized businesses they run better.

Modernizing Medicine

Modernizing Medicine uses Adyen’s unified approach to simplify payments processing operations by streamlining provider onboarding, payment acceptance, and disbursement. In just a few clicks, users on their platform can order, send, and manage new POS terminals and seamlessly collect payments from their customers online and in person.

Viasat

Viasat chose Adyen for Platforms to simplify its payments infrastructure in a way that boosts their global expansion. Viasat has seen a lift in authorization rates by approximately three percent since switching to the new payment platform.

The future of embedded payments

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.

Launch embedded payments with Adyen for Platforms

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.


Fresh insights, straight to your inbox

I confirm that I have read Adyen’s Privacy Policy and I agree to the use of my data in line therewith.