Haven’t we all marvelled about the ease with which we can book a cab or order our favourite food with just our phone. Its just so simple – you pull out your phone, open the app, book, pay, and that’s it. A couple of clicks, and you’re done. You pay within the app – no redirects, no typing (or typos!), no hassles. The payment process is so seamless, so smooth, that it feels invisible.
And what makes this all possible is embedded payments.
As shoppers demand more seamless shopping experiences, embedded payments have become indispensable, more so, if you sell online. Europe, particularly, has become a hotspot in this area. Research shows that Europe’s embedded payments industry will grow by 35.6% to reach USD 42,310.2 million in 2022. In another study, 96% of companies said they plan to offer embedded payments to customers in the next five years.
It’s clear that embedded payments are here to stay. But how do they work, and are they the right choice for you?
Read on to know more.
What are Embedded Payments?
Embedded payments allow your customers to skip a lengthy checkout process and pay directly with just a click on your app or website. No more redirects to a third-party page or website. Rather, payments are embedded into the architecture of your app or website. This means payments fit seamlessly into the checkout journey, such that customers almost find it “invisible”. No more typing details or opening another app (for instance, a bank or e-wallet app) – just click and go.
The most common example of embedded payments is when a merchant stores a customer’s chosen payment option on file via a user profile or account. Companies like Uber and Amazon have popularized this by creating super smooth checkout experiences that make it effortless for shoppers to complete a purchase.
Embedded payments help you to design more personalized and intuitive CX. You can also configure them to offer more options – like deferring payments, adding insurance or lending options within the checkout journey – so that shoppers can pay easily. The growing popularity of crypto and NFTs are also giving brands added impetus to adopt these payments.
Why are they Popular?
Consumers crave ease and flexibility and are likely to blame their bad shopping experience on the merchant. A failed payment is harder for a merchant to ignore anymore. No longer can they blame it on “another party”.
Hence, brands are seeking to take control of the entire checkout process to make it more seamless. No more wasting time resolving issues by liaising with third-parties. Rather, they are becoming facilitators of the entire process in order to create a more gratifying shopping experience.
Benefits of Using Embedded Payments
Better user experience
Embedded payments help you create seamless user experiences that cut across many touchpoints. This helps you increase engagement with your products and services, thus boosting average order value and conversion rates. An enhanced CX means improved brand loyalty in the long term, leading to retained customers and stronger sales. By embracing embedded payment solutions, brands can retain much more control over the user experience and remove friction. This translates into a better brand experience and higher levels of trust.
Increased conversion rates
Embedded payments dramatically reduce checkout time, which means lower cart abandonment and increased conversion. This will reduce barriers to buying by making the payment process almost “invisible”. Thus, customers are more likely to complete a purchase, meaning lower cart abandonment and increased conversion.
More impulse buying
The ease that embedded payments provide increases the chances of impulse purchases by reducing barriers to buying. Because customers are not faced with the need to fill in their payment details at checkout, they are more likely to make on-spot decisions. Adding spot finance options like BNPL in your checkout further increase the chances of conversion.
So, are embedded payments right for your business?
To decide, you need to consider:
- Embedded payments have a string of requirements, from storing customer data to securing PCI compliance. Do you have the bandwidth to manage the entire process?
- Can you take on the new work flows that embedded payments will introduce?
- Do you have the in-house talent to configure your systems or do you need to hire?
- Would you prefer to work with a reputed global payment service provider and avoid all hassle?
How can Novalnet Help?
We are a global PSP who are trusted advisors to Europe’s leading brands when it comes to payments. Our state-of-the-art technologies and methods help businesses in Europe accept payments globally. From our instant payment plug-ins to our AI-based risk management tools, we have the resources to get you up and running with your payments in a short time, and with zero hassle.
Reach out to us today to know more about how we can help your business.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.