What are embedded payments: benefits and best practices for your business

Summary:

• Embedded payments allow your customers to complete transactions directly within your platform or software, without needing to redirect to a third-party provider.

• Integrating embedded payments can help you improve the customer experience, open new revenue streams, and support your global growth ambitions.

• Choosing the right embedded payments partner means finding one that can scale with you, reduce operational overheads, and help you deploy quickly across markets.

No one likes redirects. Every extra step, every new tab, and every unfamiliar checkout page increases the chances of a customer abandoning their purchase. Embedded payments solve this​ problem. By integrating payment processing directly into your platform or software, you let customers complete transactions in the environment they already trust, without being sent elsewhere.

This shift to embedded payments is happening fast. In 2024, they accounted for 21 billion one-click checkout experiences, and t‌heir global transaction value is expected to increase by 134% by 2028, up from US$1.1 trillion in 2024.

In this article, we’ll dive into the key benefits of embedded payments and share how they can help drive all things embedded payments, and how they’re driving growth for global businesses.

What are embedded payments?

Embedded payments are payment services built directly into a platform or application. They allow users to make purchases, transfer funds, or pay invoices without switching to a third-party checkout or separate payment gateway.

While embedded finance covers a broader range of financial services like lending, insurance, and investments, embedded payments focus specifically on integrating transaction capabilities into your platform’s environment.

Embedded payments platforms give businesses full control over the payment flow. By handling transactions natively, they can deliver a faster, more connected experience for users and simplify financial operations behind the scenes.

You see embedded payments in action every day. Say you're using a new audiobook app and decide to buy your first title. Instead of being sent to a separate payment page, you complete the purchase directly within the app.

It's also how global marketplaces like eBay or Etsy help merchants deliver a better checkout experience, or how a point-of-sale (POS) software provider might expand into embedded payments, allowing their customers to process transactions directly through their system. By removing extra steps, businesses make it easier for customers to buy.

Embedded payments versus integrated payments

Embedded payments integrate directly into user-facing applications, while integrated payments connect accounting systems to payment processors. Embedded payments and integrated payments are often confused, because they both involve incorporating payment functionalities into a business' existing systems or platforms, and aim to improve efficiency. However, they aren't the same and are distinct.

Integrated payments connect your platform to an external payment processor through APIs. It lets you process transactions without manual data entry, and reduces errors at checkout. You'll still be relying on two separate providers to manage the process and you’re responsible for keeping systems in sync, troubleshooting issues, and handling updates can add unnecessary complexity to your workflows.

Embedded payments take things a step further. Payment functionality is built directly into your platform’s environment, making transactions a native part of the user experience. Customers stay within your platform at every step, and you stay in full control of the checkout and payment process.

How embedded payments work

Let’s lay out step-by-step how the embedded payments process works.

Embedded payments

1. API integration: Your development team integrates a payment service provider’s (PSP) API directly into your platform. Some embedded payments solutions may also connect to open banking APIs, allowing you to offer faster account-to-account payments and improved financial data access for your customers.

2. The purchase is made: When a customer is ready to pay, they enter their payment details directly within your app or website. This could be a secure payment form, a fingerprint scan, or a digital wallet checkout, all handled without leaving your platform.

3. Tokenization: The customer’s payment information is then tokenized, meaning it is converted into a secure, encrypted token instead of being stored as raw financial data. This greatly reduces the risk of fraud.

4. Real-time processing: The payment information is sent instantly through the PSP’s system to the payment processor, which contacts the card network and the issuing bank. Identity checks happen in real-time, and the bank either approves or declines the transaction.

5. Transaction approval: If the payment is approved, the response flows back to your platform. Your customer immediately receives a confirmation, without needing to leave the platform at any point.

6. Funds transfer: Funds are then transferred from the issuing bank to the acquiring bank, minus any relevant transaction fees.

7. Drawing data insights: With embedded payments platforms, businesses can then capture and analyse transaction data directly within their financial ecosystem, making it easier to gather valuable insights that can simplify making strategic financial decisions in the future.

Non-embedded payments

The process for non-embedded payments is the same as the embedded payments process, except for step two. When the purchase is made, customers are redirected to an external payment processing platform to carry out the rest of their transaction.

The non-embedded payments process comes with a few other considerations for businesses. With non-embedded payments, customers are redirected to a third-party payment gateway, which can disrupt the user experience. This approach also involves more manual steps for businesses, such as verifying customers and keeping financial records, unlike embedded payments that automate the entire process within the platform. Additionally, non-embedded payments can be slower and prone to delays due to the need to load and manage a separate payment system.

The benefits of embedded payments

Embedded payments platforms create real advantages for both businesses and their customers. They make it easier for customers to complete purchases, and help businesses unlock new revenue streams, and simplify global operations.

🟠 Improved user experience

According to Baymard Institute, 70% of online shopping carts are abandoned. One of the biggest reasons is a complicated checkout. Embedded payments remove these barriers. By building payment functionality directly into your platform, you make the buying experience faster, easier, and more secure. When combined with open banking, embedded payments can also offer instant account-to-account transactions, reducing reliance on cards and lowering transaction costs.

🟠 Increased revenue streams and cost efficiencies

Embedded payments can open new ways for your business to grow revenue. You could introduce transaction fees, subscription models, premium features, or even tap into interchange fee earnings.

At the same time, embedding payments helps cut operational costs. You remove manual processes, reduce reconciliation headaches, and unlock valuable data insights. With better visibility into payment trends and customer behaviour, you can make smarter decisions that drive profitability.

🟠 Scaling with your business

As your business scales, embedded payments can adapt to your evolving needs, providing a strong foundation for your success. Whether your business goals are to break into new global markets, or to grow your customer base and bump up your revenue, embedded payments provide the technology and flexibility to make it happen. High-volume transactions across global regions are simplified with embedded payments, all while maintaining safety and compliance standards (without requiring you to complete a PayFac registration). 

Benefits by business type

Embedded payments provide further benefits for businesses in all types of industries. Take a look below to see how your business specifically could benefit from this technology.

• eCommerce platforms: Online retailers can integrate embedded payment solutions to streamline their checkout processes, reduce cart abandonment, and enhance customer satisfaction.

• Marketplaces: Platforms that connect buyers and sellers, such as eBay or Etsy, can use embedded payments to improve outcomes for their merchants, and facilitate better dispute resolution and transaction management for both parties.

• Subscription services: Software-as-a-Service (SaaS) companies and other subscription-based businesses can provide seamless payment and subscription management, improving customer retention and reducing churn.

• Financial technology companies: Fintechs can use embedded payments to enhance their offerings by integrating a wide range of financial services, such as lending, insurance, and investment management, directly into their platforms.

• Travel and hospitality businesses: Travel agencies, hotels, and airlines can offer a more seamless booking and payment experience for their customers with embedded payments, right from initial reservation to final payment.

• Healthcare businesses: Medical practices and hospitals can integrate payment solutions into their platforms to simplify the process of paying bills, managing insurance claims, and handling other financial transactions.

• Business-to-business professional services: Businesses that provide services to other businesses can offer integrated payment solutions to streamline invoicing, payments, and financial management.

How to choose an embedded payments partner

Choosing the right embedded payments provider is an important decision for supporting your business’s global ambitions. Here’s a step-by-step guide to choosing the best platform for your needs as well as some of the main features you should consider.

1. Evaluate the platform’s features and capabilities to decide what’s most important to you in your embedded payments platform. 

2. Review customer feedback and case studies to see what other business owners have to say about the platform, particularly regarding customer support. Case studies can also provide insights into how software can benefit your specific business.

3. See the product for yourself first-hand. Be sure to pay attention to whether you find the platform intuitive to use, and if it seems fast and reliable.

Here’s a handy list of what to look out for: 

🟠 A modular, developer-friendly approach

Your partner should offer a modular platform that lets you choose the features you need. Avoid providers that lock you into expensive, rigid solutions. Look for flexible APIs, pre-built components, and easy ways to embed payments like card-present transactions, pay-by-text, subscriptions, and eCommerce payments, all while keeping your platform’s branding front and centre.

🟠 Powerful multi-currency capabilities

Scaling internationally means managing multiple currencies. Your partner should support a wide range of currencies and local payment methods, with the ability to collect, split, and settle funds globally. The best partners help you maximise revenue by reducing FX risk, offering like-for-like settlements to avoid costly currency conversions.

🟠 It's scalability and global reach

Choose a partner that can grow with you as your transaction volumes increase and your customer base expands across borders. Look for strong infrastructure, local regulatory expertise, and support for complex marketplace and platform payment models.

🟠 A proven track record of innovation

Payments technology evolves quickly. Your partner should be leading the market, not catching up. Look for evidence of new product launches, improved onboarding flows, and continuous investment in technology that makes your platform more competitive.

🟠 Approach to fraud, security, and compliance

Your provider should handle encryption, tokenization, PCI DSS compliance, and regional regulatory requirements as part of the package. Security should be built in, not bolted on.

Implementing an embedded payment solution

Once you have chosen the right embedded payments platform, it's time to bring the solution to life inside your platform. Here are the key steps to implement embedded payments‌:

• Plan the payment flow from end to end: Work with your provider’s technical team to map every customer interaction. Define how payments will move through your system, from checkout to refunds to reporting. Agree early on responsibilities, timelines, and testing checkpoints to avoid delays later.

• Keep the checkout experience simple: Your goal should be to make every transaction fast, intuitive, and secure. Support multiple payment methods and currencies where needed, and keep the payment process inside your platform from start to finish. Every click you remove is one more reason for customers to complete a purchase.

• Embed strong security and compliance controls: Secure your payment flows with encryption, tokenization, and multi-factor authentication. Ensure your provider helps you meet PCI DSS standards and any relevant regional regulations. Building compliance into your system early will save you time and costs later.

• Test thoroughly before going live: Use your provider’s sandbox environment to simulate real-world transactions. Test for authorisations, refunds, failed payments, settlement flows, currency conversions, and error handling. Catching issues before launch protects your customer experience and avoids disruption.

• Integrate with your wider systems: Make sure your embedded payments platform connects smoothly with your CRM, ERP, and accounting systems. This'll give you a real-time view of cash flow, simplify reconciliation, and reduce manual data entry across teams.

• Monitor and optimise after launch: Once your platform is live, keep tracking payment success rates, customer checkout behaviour, fraud detection rates, and settlement performance. Use insights from your embedded payments platform to refine your user journey, spot trends, and unlock new opportunities to grow revenue.

The future of embedded payments

According to Juniper Research, revenue from embedded payments is expected to grow by 84% over the next four years, reaching $59 billion worldwide by 2027. Platforms that invest now will be best placed to meet rising customer expectations and unlock new ways to drive growth.

• All-in-one solutions: Embedded payments platforms provide an exciting opportunity for companies to create ‘closed-loop’ financial systems that allow them to manage all aspects of their cash flow from one place. Adopting a full-scale financial suite of tools from one provider lets you reduce friction from workflows and avoid the pain of having to onboard multiple PSPs.

• B2B embedded payments: Recent research forecasts that by 2027, 35% of embedded payments’ revenue will be from the B2B segment. B2B payments have lagged behind in terms of new payment methods, with a complex process (often with multi-layer approvals) to blame. However, key B2B channels, like B2B eCommerce marketplaces and accounting software, have a major opportunity to stay ahead of the curve and improve their processes by taking advantage of embedded payments platforms.

• Further embracing automation: Embedded payments are unlocking the next wave of business automation. Integrated accounting software can now automatically categorise expenses, reconcile payments, and speed up cash flow cycles. This results in less time spent on manual data entry and more time focused on growing your business.

Building your future with embedded payments

Embedded payments are reshaping how platforms grow, scale, and create value. With Airwallex, you can take control of your payments experience and unlock new ways to drive revenue, improve customer loyalty, and simplify global operations.

Payments for Platforms lets you embed a fully branded payment system into your software or marketplace. Accept payments in 130+ currencies, settle in 180+ countries, and support your customers with faster, more flexible transactions, all while cutting costs and avoiding traditional PSP complexity.

Whether you want to launch quickly with pre-built components or build a fully custom native integration, Airwallex gives you the tools to move faster, scale globally, and create a better experience for every customer.

Frequently Asked Questions (FAQs)

What are embedded payments?

Embedded payments integrate payment processing directly into your platform or app, letting customers complete transactions without being redirected to a third-party checkout.

How do embedded payments benefit businesses?

Embedded payments improve customer experience, boost conversion rates, create new revenue streams, and simplify global financial operations.

What industries can benefit from embedded payments?

Platforms in eCommerce, marketplaces, SaaS, travel, healthcare, and B2B services can all use embedded payments to improve their checkout experience and grow faster.

How do I choose the right embedded payments partner?

Look for a partner that offers flexible integration, global reach, strong security, proven innovation, and 24/7 support, like Airwallex.

Sources:

¹https://www.juniperresearch.com/press/embedded-payment-transaction-value-to-surpass-25-trillion-globally-by-2028-a2a-to-be-a-significant-contributing-factor-for-growth/

²https://www.juniperresearch.com/press/embedded-payment-transaction-value-to-surpass-25-trillion-globally-by-2028-a2a-to-be-a-significant-contributing-factor-for-growth/

³https://www.juniperresearch.com/press/embedded-payment-transaction-value-to-surpass-25-trillion-globally-by-2028-a2a-to-be-a-significant-contributing-factor-for-growth/