What are embedded payments? A 2026 guide for platforms

Key takeaways:

• Embedded payments let your customers complete transactions directly inside your platform or app, without being redirected to a third-party checkout.

• Integrating embedded payments can improve conversion rates, open new revenue streams through transaction fees and take rates, and support your global growth.

• With Airwallex's Payments API, you can embed pay-ins and payouts into your platform, giving your customers access to 160+ payment methods while managing connected accounts, fund flows, and settlements.

Embedded payments are payment capabilities built directly into your platform or app, so your customers can pay without leaving the experience they're already in.

No redirects, no third-party checkout pages, no friction between intent and purchase.

In this guide, we'll explain what embedded payments are, how they work, how they generate revenue, and what to look for when choosing a partner to build on.

What are embedded payments?

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

You might encounter embedded payments in situations like these:

• Buying an audiobook in an app without being sent to a separate checkout.

• Selling on a marketplace like Etsy or eBay and accepting payments through the platform.

• Using POS software that lets you accept card payments directly through the same system.

In each case, the payment is built into the product itself. The customer stays in the same experience, while the business has more control over how payments work and look.

Embedded payments are also different from embedded finance, which is a broader category that includes services such as lending, insurance, investments, and foreign exchange.

Embedded payments are one part of embedded finance, and can be a starting point for businesses looking to add more financial services to their platforms.

Embedded payments vs integrated payments vs hosted checkout

These three terms are often used interchangeably, but they describe different levels of control over the payment experience. Here's how they compare:

Integrated payments connect your platform to an external payment processor through an API. The customer experience may feel similar on the surface, but the payment infrastructure is split between two systems.

That means more reconciliation work, more troubleshooting, and more dependencies to manage.

Embedded payments go further. Payment functionality is built directly into your platform, so transactions are a native part of the user experience. Your customers stay inside your product at every step, and your team has full visibility over payment data without switching between systems.

Hosted checkout is the most basic option. When a customer is ready to pay, they're redirected to a payment page owned and operated by a third-party provider. It's quick to set up, but you give up control over the look, feel, and data of that checkout experience entirely.

How embedded payments work

At a high level, embedded payments remove the hand-off to a third-party checkout. Here's how a transaction flows when payments are built directly into your platform.

The embedded payments process

• API integration. Your development team integrates a payment service provider's (PSP) API directly into your platform. Some solutions also connect to open banking APIs, which can enable faster account-to-account payments and give your customers better access to their financial data.

• The purchase is made. When a customer is ready to pay, they enter their payment details (or use a saved method or digital wallet) directly inside your app or website. They don't leave your platform at any point.

• Tokenisation. The customer's payment details are converted into a secure encrypted token. The raw card data is never stored, which significantly reduces fraud risk.

• Real-time processing. The payment information is sent through the PSP to the payment processor, which contacts the card network and the customer's issuing bank. Identity checks happen in real time, and the bank approves or declines the transaction.

• Transaction approval. If the payment is approved, the confirmation flows back to your platform instantly. Your customer sees the result without ever leaving your product.

• Funds transfer. Funds move from the issuing bank to the acquiring bank, minus any applicable transaction fees.

• Data insights. With embedded payments, transaction data is captured directly within your platform, giving you visibility into payment trends, customer behaviour, and cash flow without manual exports or third-party dashboards.

How non-embedded payments differ

The process above is the same for non-embedded payments, with one key difference: at step 2, the customer is redirected to an external page to complete their transaction. That redirect adds friction, reduces trust, and limits your visibility into what happens next.

It also means reconciling data across two separate systems, and more operational overhead for your team.

The benefits of embedded payments

Embedded payments can improve the customer experience, create new revenue opportunities, and make payments easier to manage as your business grows.

Better customer experience and conversion

Around 70.22%¹ of online shopping carts are abandoned before checkout. A complicated or unfamiliar payment process can contribute to this. Embedded payments keep customers on your platform, removing redirects and unnecessary steps that can lead to drop-off.

When combined with open banking, they can also enable instant account-to-account payments, giving businesses an alternative to card payments and potentially reducing transaction costs.

New revenue streams and lower costs

Embedded payments can create new revenue opportunities through transaction fees, take rates, payout fees, or premium features such as instant settlement.

They can also reduce operational work by automating payment matching and reconciliation, while giving businesses better visibility into cash flow.

Easier expansion across markets

As your business grows, embedded payments can support higher transaction volumes across currencies and markets. Your payment provider can also handle parts of the compliance and regulatory requirements involved in accepting payments in different markets.

Benefits by business type

The benefits vary depending on how your business uses payments:

• eCommerce platforms: Keep customers on your platform during checkout and reduce unnecessary redirects.

• Marketplaces: Manage payments between buyers and sellers, including split payouts and disputes.

• SaaS businesses: Build subscription billing and payment management directly into your product.

• Travel and hospitality: Connect booking and payment within the same customer journey.

• Healthcare: Let patients pay bills, manage co-pays, and set up payment plans within the platform.

• B2B platforms: Bring invoicing, payments, and financial management into the tools business customers already use.

How embedded payments generate revenue

For platforms and software businesses, embedded payments can become an additional revenue stream that grows as payment volume increases. There are several ways to monetise embedded payments.

Take rates and interchange markup

Platforms can add a markup to the payment processing fees they charge users and keep the difference as revenue.

Some payment providers also offer revenue-sharing arrangements, where the platform receives a share of the processing fees generated through its payments volume.

Payout fees

Platforms that pay out funds to merchants, sellers, or contractors can charge a fee for each payout. These fees can become a meaningful revenue stream as payout volumes grow.

Premium settlement options

Platforms can offer faster payouts, such as same-day or instant settlement, as a paid option. This gives users who need faster access to their funds an additional service while creating another source of revenue for the platform.

Bundled pricing

Payment functionality can also be included in higher-tier subscription plans. This gives customers access to payments alongside other premium features, while creating an additional reason to upgrade.

Challenges of implementing embedded payments

Embedded payments can add value to your platform, but they also come with technical, regulatory, and operational responsibilities. The main challenges to consider are:

Compliance and regulatory requirements

Handling payments means meeting requirements such as PCI DSS, KYC and AML checks, and local regulations in the markets you operate in.

Your payment provider may handle some of these requirements, but you still need to understand which responsibilities remain with your team.

Engineering effort and integration time

Payment integrations can take weeks or months to build, depending on how much you customise. Your team may need to build payment flows, manage webhooks and payment statuses, handle refunds, and connect payment data with your existing systems.

Pre-built components and APIs can reduce the development work involved.

Fraud and chargebacks

Accepting payments also exposes your platform to fraud and chargebacks. Fraud detection, tokenisation, and dispute management can help reduce this risk, but you should understand how liability is shared between your business and your payment provider.

Customer support

Payment issues such as failed transactions, refunds, and settlement questions will often reach your support team. Make sure your team has the information to resolve common issues and a clear process for escalating more complex cases to your payment provider.

How to choose an embedded payments partner

The right embedded payments provider can affect your integration, customer experience, and ability to expand into new markets. Look for a provider that fits your technical requirements today and can support your needs as you grow.

Developer tools and integration options

Look for flexible APIs, pre-built components, clear documentation, and sandbox environments for testing. The provider should give you enough flexibility to build the payment experience you need without making integration unnecessarily complex.

Multi-currency and local payment methods

If you operate across markets, your provider should support the currencies and local payment methods your customers use. Features such as like-for-like settlement, where you collect and settle in the same currency, can also help reduce unnecessary FX conversions.

Market coverage and local expertise

Consider whether the provider supports the markets you operate in and understand what local regulatory requirements it can help you manage. This becomes more important as you expand into new countries.

Security and compliance

Check what the provider handles around encryption, tokenisation, PCI DSS, and other regulatory requirements. Be clear about which responsibilities sit with the provider and which remain with your business.

Product development and support

Payments technology changes quickly, so consider how actively the provider develops its product. New payment methods, fraud tools, faster payment rails, and improvements to onboarding can all become important as your platform grows.

Questions to ask before you commit

When comparing providers, ask:

• Who is liable for fraud and chargebacks?

• Can I take my card tokens if I switch providers?

• What compliance obligations remain with my team?

• Do I retain access to my transaction data?

• Does the provider support the markets I operate in today and plan to enter?

Embedded payments UX best practices

A good embedded payment experience should feel like a natural part of your product. Keep the process simple, familiar, and easy to complete across devices.

• Keep payments in context: Make the payment experience consistent with the rest of your platform. Avoid sending customers to a page that looks or feels completely different.

• Keep forms simple: Only ask for information you need. Where possible, use saved details, auto-fill, and address lookup to reduce manual entry.

• Design for mobile: Make sure buttons are easy to tap, forms are easy to complete, and pages load quickly. Test the full payment journey on mobile before launch.

• Offer relevant payment methods: Payment preferences vary by customer and market. Consider supporting cards, digital wallets, bank transfers, and relevant local payment methods.

• Build trust into the experience: Make security information easy to find and give customers clear feedback when something goes wrong. Clear error messages help customers understand what happened and what to do next.

• Make returning payments faster: Let customers securely save their preferred payment method so they can check out more quickly on future purchases.

The future of embedded payments

Embedded payments are already widely used, but the technology and business models around them continue to evolve. Several trends are shaping what comes next.

Embedded payment volumes are growing

Global transaction value from embedded payments is expected to grow 134%² by 2028, from US$1.1 trillion in 2024. Growth is being driven by more platforms building payments into their products and customers getting used to paying without leaving the app or platform.

Account-to-account payments are gaining ground

Cards remain common for embedded payments, but account-to-account (A2A) payments are becoming another option.

A2A payments move funds directly between bank accounts and can offer lower transaction costs and faster settlement in some markets. As open banking infrastructure develops, more platforms may add A2A alongside cards and other payment methods.

Banks are entering the space

Fintechs have played a major role in embedded payments, but banks are becoming more involved too. Some are partnering with software platforms and offering services such as embedded payments and payroll.

This gives platforms more types of providers to consider when choosing a payments partner.

AI is changing fraud and onboarding

AI is increasingly being used to detect fraud, verify identities, and identify suspicious transaction patterns. As these tools improve, they could help payment providers manage fraud and compliance more efficiently.

Embedded payments are expanding beyond checkout

Embedded payments are increasingly being used for more than customer checkout. Platforms can also build services such as payouts, supplier payments, payroll, insurance, and lending into their products.

For businesses adopting embedded payments today, this can create a foundation for adding other financial services later.

Why Singapore businesses use Airwallex for embedded payments

Want to add embedded payments to your platform? Airwallex’s Payments API gives you the infrastructure to manage pay-ins and payouts through your own product.

You can give your customers access to global payment methods while managing fund flows, connected accounts, and settlements behind the scenes. Here’s how it works:

Offer global payment acceptance

Give your customers access to 160+ payment methods, so they can accept payments from buyers in different markets using local currencies and preferred payment methods.

Embed payments into your platform

Choose from pre-built payment components or the Payments API, depending on how much control you want over the payment experience. Your customers can accept payments through a checkout that is part of your platform, rather than being sent to a separate payment page.

Manage pay-ins, payouts, and fund flows

For marketplaces and platforms, Airwallex lets you create connected accounts, manage fund flows, split payments, and route funds to sellers after deducting your platform fee.

Like-for-like settlement also lets customers collect and settle funds in the same currency, where supported, helping them avoid unnecessary FX conversions.

Frequently asked questions (FAQs)

What are embedded payments, in simple terms?

Embedded payments are payment capabilities built directly into a platform or app. Instead of being redirected to a third-party checkout page, customers complete transactions inside the product they're already using. The payment step becomes a natural part of the experience rather than a separate process.

What is the difference between embedded payments and a payment gateway?

A payment gateway is a third-party service that processes transactions, usually by redirecting customers to an external page to complete payment. Embedded payments go a step further by integrating payment processing directly into your platform, so customers never leave your product. The result is more control over the checkout experience and better visibility over transaction data.

Do I need to become a payment facilitator (PayFac) to offer embedded payments?

Not necessarily. Becoming a PayFac gives you the most control over the payment experience and the highest share of revenue, but it also carries the most regulatory and compliance responsibility. Many platforms start by working with a payment provider that handles PayFac registration and compliance on their behalf, allowing them to offer embedded payments without taking on the full burden themselves.

Are embedded payments secure?

Yes, when implemented correctly. Embedded payment providers use tokenisation to replace sensitive card data with encrypted tokens, so raw payment details are never stored on your platform. Reputable providers also hold PCI DSS certification and apply fraud detection tools in real time. Airwallex handles these security and compliance requirements as part of its core infrastructure.

How long does it take to implement embedded payments?

It depends on the complexity of your integration. A basic setup using pre-built payment components can take a few weeks. A fully custom, native integration built from an API can take three to six months. Developer-friendly documentation and sandbox testing environments shorten timelines considerably.

What is the difference between embedded payments and embedded finance?

Embedded payments refer specifically to payment acceptance built into a platform. Embedded finance is a broader category that includes payments plus other financial services (such as lending, insurance, investments, and foreign exchange) integrated into non-financial platforms. Embedded payments are typically the first step businesses take before expanding into a wider embedded finance offering.

Sources:

1. https://baymard.com/lists/cart-abandonment-rate

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