Key takeaways
- Embedded payments make paying part of a product's own journey.
- APIs let fintechs add bank payments without becoming a bank or building bank connections.
- The best embedded experiences feel native, consistent and transparent.
Customers increasingly expect to pay where they already are. Instead of leaving an app to make a bank transfer, they want to pay as a natural step in the product. That's the idea behind embedded payments.
What embedded payments are
Embedded payments are payment capabilities built directly into a product that isn't itself a payment company. Think of a marketplace that pays out sellers, a SaaS platform that collects invoices, or an investing app that lets users fund their account from their bank in a couple of taps.
Where bank connectivity comes in
Open Banking APIs let these products start payments from a customer's bank account and receive confirmation programmatically. For fintechs, that opens up flows such as:
- Account funding and top-ups from the user's bank.
- Invoice and bill payments inside a business tool.
- Payments for goods and services on a platform or marketplace.
- Recurring payments with the customer's ongoing consent, where supported.
The best payment flow is the one the customer barely notices, because it's simply part of the product.
Building it without becoming a bank
Initiating payments requires regulatory permissions and stable connections to many banks. Most fintechs don't want to take that on themselves. Partnering with a regulated Open Banking provider lets them focus on the product, while the provider handles licensing, bank connectivity and payment status.
Designing a native experience
- Keep the user in your product's visual style right up to the bank redirect.
- Explain the bank step in plain language before it happens.
- Bring the user back to a clear success or failure screen.
- Reflect the payment status everywhere it matters, from balances to notifications.