Embedded banking services are surging in popularity as many companies see the value embedded financial services deliver to the customer experience and efforts to drive brand loyalty.
At the forefront of the embedded finance revolution are embedded payments. While embedded payments are only a tiny part of the services made possible through embedded finance, embedded payments are often the most visible and widely used by customers.
By offering an embedded payment option, your business can simplify the checkout process, drive customer loyalty, and deliver an unparalleled customer experience. This post will explain what embedded payments are and how they can help your business drive brand loyalty through an improved user experience.
What Is Embedded Finance?
To understand embedded payments, it is vital to first learn more about embedded finance. Embedded finance is a broad term for integrating financial services in non-financial apps, websites, and business processes.
Embedded finance includes various financial services, from bank accounts and lending to payments and even embedded insurance. Embedded finance providers and traditional financial institutions allow interested businesses to use their APIs to deliver new and convenient services to their customers.
What Are Embedded Payments?
Embedded payments are often the first stage of embedded finance that software companies offer their customers. Embedded payments enable businesses to offer their customers the ability to make a payment with the click of a button.
With a quality embedded payment system, payment for goods and services becomes nearly invisible, and the purchase process becomes simple and convenient. The embedded payment method is not a recent innovation, but the embedded payments industry has recently boomed.
You might think that you have never used embedded payments before. However, if you have ever used an application like Uber or Lyft, you have used embedded payment. When you book a ride on one of these applications, you simply click to pay without leaving the application.
Businesses utilizing embedded payment solutions can store a customer’s payment information for future purchases, subscriptions, and recurring payments.
The Business Benefits of Embedded Payments
The embedded finance market benefits financial institutions, businesses, and consumers. However, if you are considering utilizing embedded payments in your software or processes, it is important to understand the business benefits of using these financial services.
The primary business benefits of embedded payments include the following:
- Improved customer experience
- Increased operational efficiency
- Streamlined processes
- New insights
Improved Customer Experience
The most significant benefit of embedded payments is that they can vastly improve your product’s customer experience. Customers who have a good experience with your business will likely return and make another purchase.
Embedded payments enable customers to make purchases without entering their card information whenever they want to buy something. Not only do embedded payments make the purchasing process convenient and simple, but they can also help increase sales.
Embedded payments reduce the friction between a customer and a purchase. The more steps required to make a purchase, the more opportunities for a customer to change their mind or abandon their purchase.
Consumers are accustomed to convenient mobile app experiences. Embedded payments will help your business meet consumer expectations and deliver an experience that encourages customers to return repeatedly.
Increased Operational Efficiency
Embedded payments can increase the operational efficiency of your business and enable employees to focus on high-value tasks. For example, embedded payment solutions not only speed up the checkout process for customers but also speed up the checkout process for businesses and reduce human error.
Organizations can benefit greatly from increased operational efficiency. Instead of handling rote tasks like checkout, employees can focus on the core competencies of your business and help your business deliver new, innovative products and services.
Embedded payments streamline payment processes and enable transactions to run through the same software used to manage your daily operations. By streamlining processes, businesses can operate more efficiently.
However, streamlined processes offer more than operational efficiency. Streamlined processes are easier to manage and give management and key stakeholders greater visibility and control over business operations.
With embedded payment systems, all business data is visible in the same place, allowing organizations to gain new insights into their operations. Instead of combining reports from multiple departments, locations, and channels, embedded payments enable organizations to view data, purchase behaviors, and more across the entire company.
It is hard to quantify the value of deeper insights. But, emboldened by this data, your business could develop new processes, products, or services to please customers and improve business outcomes.
Emerging Trends in Embedded Payments
No one can predict what the future of embedded banking services will hold for businesses and consumers. Still, there are some exciting emerging trends in embedded payments that your organization should be aware of.
You might find a valuable business opportunity for your brand in the emerging trends shaping the future of embedded payments. Of course, the biggest trend to highlight is the emergence of wearable technology and IoT.
Wearables are popular with consumers, and given the ability to tap and pay from a smartwatch or other connected IoT device will only continue to gain momentum as contactless payment gets more popular with consumers.
In addition, the emergence of Virtual Reality will offer brands new opportunities to make digital and physical sales. For example, there is a huge opportunity to offer in-game purchases to gamers of physical and virtual items.
Embedded payments are the most popular form of embedded finance that businesses can quickly implement to improve their products. If you want to learn more about the value and capabilities of embedded payment systems, contact an experienced FinTech app development partner like Koombea.