Imagine a world where payments happen seamlessly within your favorite apps—no redirects, no friction, just a smooth, seamless transaction. That’s the power of embedded payments.
If you run a business that requires conducting payment transactions, embedded payments are the keyword for you. They are a gateway to creating a consistent and frictionless payment experience for your users. So, whether you run an e-commerce app or a ride-booking service, embedded payments are the best fintech API integration for your business.
Through fintech APIs, you can transform a non-financial platform into one with a payment ecosystem by directly integrating transaction processing capabilities into the existing platform. Thus, customers can make their payments without leaving the app.
In this blog, let us explore what embedded payments are, their business impact, and how product managers can use them for revenue growth.
What are embedded payments?
Embedded payments refer to payment methods that are seamlessly integrated into any SaaS company’s existing application. The user can pay through the application’s user interface, eliminating the need for third-party checkouts.
Companies can benefit from the revenue stream collected through payment processing fees by integrating payment processing on their own platforms. In fact, SaaS businesses can increase revenue per customer by 2 to 5 times through embedded payments.
For example, ride-hailing apps like Uber, e-commerce platforms like Shopify, and SaaS products like Notion utilize the embedded payment capability for product-led growth and revenue optimization.
How embedded payments create a frictionless user experience
Embedded payments create a frictionless user experience by seamlessly processing payments directly in the platform or application.
As a result, users can finalize their transactions without exiting the site or interface, which research indicates is why 75% of customers opt for it. They don’t need to switch between platforms to make a purchase, making user experience smoother, quicker, and more secure.
Embedded payments achieve fintech API integration and reduce payment friction due to the following factors:
- No redirects: Users are not redirected to a third-party payment page to complete their transaction, reducing the time and effort required to check out.
- Pre-filled details: The platform can store the user’s payment information, so users don’t need to fill their details every time they make a purchase.
- Checkout streamlining: By reducing steps in the checkout flow, companies can streamline the entire purchase process. This leads to greater user satisfaction and more purchases.
- Improved conversions: By creating a frictionless user experience, companies can improve conversion rates and revenue flow.
How Fintech APIs enable embedded finance
Fintech APIs allow third-party applications to communicate with online banking systems, enabling embedded finance. Banking services are integrated directly into merchant platforms, which allows payment processing and the storage of banking data within the platform itself.
Developers can integrate financial services, such as conducting transactions, storing user payment information, and managing payment modes, inside the application to create a personalized user experience.
Fintech APIs also enable developers to create new and innovation financial capabilities tailored to specific business and user needs.
1. Payments as a Service (PaaS)
The PaaS market is growing fast. The public cloud PaaS market worldwide is expected to reach $208.64 billion in 2025 alone.
Payments as a Serviceis a model that allows businesses to integrate payment processing capabilities into their applications by leveraging API-driven payment solutions. This allows businesses to utilize cloud-based platforms and third-party APIs to manage payments without additional pressure on the existing infrastructure.
PaaS solutions offer a wide range of payment capabilities with minimal development effort. Thus, you can add transaction functionalities without building a payment system. The functionality is scalable, secure, and compliant, all through easy-to-use APIs.
Some key players in the embedded payments space are Plural by Pine Labs, Stripe, Adyen, and Razorpay. Plural’s developer-friendly APIs enable businesses to offer frictionless transactions through embedded financial solutions and an intuitive dashboard.
Business models leveraging embedded payments
Several business models benefit from using the embedded payments structure, especially ones that need to manage a large volume of user transactions. Some examples are:
1. Marketplaces and e-commerce websites
Online shopping platforms and marketplaces, such as Shopify, Etsy, and Amazon, use embedded payments to let users pay directly for purchases. Commissions can be used to monetize these transactions, building a steady revenue flow and reducing payment processing fees per transaction.
2. SaaS platforms
SaaS platforms generally operate on the subscription model. They can offer subscription services by recurring payments within the user’s account directly. This is an ideal solution for brands like Notion and Netflix that work on a subscription-based plan.
3. On-demand services
On-demand services like ride-hailing apps and food delivery apps benefit greatly through embedded payments. The user is charged directly for their ride without taking them to a third-party checkout page and making them input payment details manually, like in Uber and Swiggy.
4. B2B platforms
B2B platforms deal with recurring transactions with vendors and stakeholders. Through embedded payments, they can improve their monetization strategies by streamlining vendor payments and invoicing.
How product managers can use embedded payments for revenue growth
For product managers, embedded payments are the ticket to revenue growth as it reduces friction in the payment journey. This directly improves the user experience and boosts conversions for the product.
To promote revenue growth through embedded payments, product managers need to consider the following aspects:
1. Monetization strategies
Embedded finance trends are popular in the current marketplace because they reduce transaction fees and provide premium payment options to customers without having to involve a third-party webpage.
Product managers can utilize this capability to increase the value of their product and offer cross-selling financial services with better success rates. For example, embedded payments can help e-commerce platforms boost average order value by 15% by reducing transaction costs and creating a steady revenue stream.
2. Compliance considerations
Embedding payments into your existing platform is convenient, secure, and compliant. By using data security best practices and tokenization, it also meets compliance standards such as PCI DSS.
By storing sensitive user data in the form of non-sensitive digital tokens, it ensures maximum data protection in payments and investing models.
Conclusion
Embedded payments are the future of online businesses in multiple industries. It streamlines transactions and helps unlock new revenue opportunities for small and medium businesses with ease.
As a product manager, you should integrate embedded payments to drive revenue growth, reduce cart abandonment, and regulate overhead costs. This can revolutionize product performance and give you a massive edge over the competition.
Transform your payment experience with Plural by Pine Labs. Explore our seamless embedded payment solutions today!
