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What are embedded payments? Discover how they work, benefits, and examples

What are embedded payments? Discover how they work, benefits, and examples

Discover the benefits of embedded payments for SaaS businesses and how they can help your profit grow.

Jul 3, 2024

Embedded payments are becoming increasingly popular with SaaS businesses. In fact, leading consultancy Bain & Company estimates that SaaS businesses could capture €35 trillion – or 15% of all global transactions – by embedding payments in their platforms.

For SaaS platforms, embedded payments can help you deliver better customer experiences and unlock new revenue streams.

So, how can you embed payments in your platform? In this article, we explain what embedded payments are, how they work, and the benefits they offer your SaaS business. 

What are embedded payments for SaaS platforms?

Embedded payments involve seamlessly integrating payment processing capabilities directly into your website or platform. That means payments become a seamless part of your user experience. 

How does this work? 

Well, you probably need to help your platform users accept and manage the payments that they take from their customers. Without embedded payments, you would usually refer users to a third-party payment partner to do this. 

This approach works, but it means you don’t control your user experience, you can’t monetise payments, and your users have to deal with multiple providers. This can all lead to increased churn, lost revenue, and a poor user experience.

But, with embedded payments, you can offer this service through your platform. That means you help users accept and manage payments without them having to select and start working with a payment provider. Instead, they can rely on you to offer all the payment functionalities they need, providing a much better experience.

With embedded payments, you can also monetise transactions by charging fees on the payments your users accept.

How do embedded payments work?

Many SaaS platforms integrate payment processing into their operations. By offering a reliable, easy-to-use payment service you can build trust and reduce churn. And by monetising payments, you can drive more revenue.

To do this, your platform needs to become a payment facilitator – or you need a service provider that helps businesses process transactions. 

This can work in two different ways.

The traditional payment facilitator model

This model involves integrating a payment gateway – or the technology that authenticates and securely transmits payment data between different parties during a payment – into your platform.  The payment gateway then acts as the intermediary that connects your platform to your customer’s bank. 

Creating your own payment gateway can be a great way to control all aspects of your payment service. But, it comes with high costs, high risk, and complex time-consuming challenges. You have to comply with various regulatory requirements, store sensitive customer data, and more. Most businesses don’t have the time, capital, or capability to do this.

The payfac-as-a-service model

In the payfac-as-a-service approach, you can work with a payment service provider (PSP) to embed payments into your platform. 

Working with a PSP allows you to embed all of the payment systems and services you want without having to operate and manage them yourself. That helps you to get set up quickly, reduce costs, and know your payment system is operated by an expert. 

What are the benefits of embedded payments?

Embedding payments in your platform provides a range of benefits for both you, your users, and your users’ customers. 

Benefits for your business 

New revenue streams 

Embedding payments allows you to charge users for the payments they take from their customers. This is a quick, easy way to generate additional revenue.

Fast, cost-effective implementation 

Partnering with the right payment partner helps you and your users (or customers) quickly set up and start accepting payments. You don’t have to build your own payments system. Instead, you have a simplified pre-built solution that doesn’t require much time to implement.

Improved data and analytics

By unifying all your payments in one system, embedded payments can provide you with clear data – for you and your users. This includes data about purchasing habits, fraud, and customer preferences. And you can drill these down per market or customer segment. This helps to inform better decision-making and show growth opportunities.

Streamline compliance (in all markets)

Embedding payments with a trusted payment partner helps you always comply with the relevant regulations and directives in multiple markets. The right payment partner should help you manage any compliance and licensing complexities. This can help you scale faster into new markets and reduce operational overheads.

Quick, secure customer onboarding

Help your users and their customers onboard faster by taking advantage of pre-built, optimised onboarding flows. The right partner should also take care of all your compliance and know your customer (KYC) needs during onboarding – saving you time and money and giving you peace of mind that your platform is compliant with the correct payment regulations. Your PSP will also continuously help you with dedicated customer support.

Embedded payments examples

So, we’ve now explored how embedded payments work and the benefits they offer your business and customers. 

Next, let’s explore some examples of embedded payments to show how businesses are actually using them. Here we do that using use cases from customers using the embedded payments solution we offer here at Mollie. This solution is called Mollie Connect.

Jamezz

First let’s look at Jamezz, a leading self-ordering platform in Europe that’s based in the Netherlands. 

Using Mollie Connect, Jamezz launched embedded payments in just five days. It helps them to onboard users from within their platform, automate payouts, and monetise payments. It also allows their users to offer the payment methods their customers need – including leading and local European options.

"We were so pleased with how simple this process was." says Fabio Gronsveld, Commercial Director at Jamezz. “Mollie is very proactive: they check in with us regularly. We even have our own Partner Manager, which adds an element of personal contact.”

Currently helping businesses scale in 15 different countries, Jamezz also uses our Multi-Currency solution to process payments in 30 currencies to help attract new customers and reduce conversion fee costs.

SimplyDelivery

Another company using Mollie Connect is SimplyDelivery, a German SaaS solution that provides a fast, easy way for restaurants to launch a delivery service. Using SimplyDelivery, restaurants can set up their online shop, payment system, and an app for delivery drivers.

By using Mollie Connect, SimplyDelivery has made user onboarding a seamless process. As they’re an international company, Connect helps them offer local payment methods so their users’ customers can pay using their preferred method. 

SimplyDelivery's founder, Björn Wisnewski, appreciates Mollie's easy payments and onboarding. "The great thing about Mollie is that it gives you a wide range of payment methods that work internationally. For consumers, it's very easy to pay using the payment method they prefer.

“Simplicity is an absolute must for restaurants,” Björn adds. “They have no time to waste on processing and accreditation. That’s another thing that makes Mollie so great – the onboarding is extremely easy.”

Embedded SaaS payments with Mollie Connect

Mollie Connect makes embedding payments simple, reliable, and stress-free. By choosing Connect, you can unlock a range of benefits for your SaaS business. Here’s what Connect offers:

  • Effortless onboarding: Automate onboarding to simplify workflows and sign users up in minutes.

  • New revenue streams: Charge fees on payments processed through your app or platform.

  • Improved efficiency: Automate workflows to streamline reconciliation, giving you more time for your business.

  • Leading payment methods: Offer major and local payment methods – for you and your customers.

  • Centralised payments: Access a single dashboard so you – and your customers– can track and manage payments in real-time

Discover how Mollie Connect can help your SaaS business.

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Table of contents

What are embedded payments for SaaS platforms?

How do embedded payments work?

What are the benefits of embedded payments?

Embedded payments examples

Embedded SaaS payments with Mollie Connect

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MollieGrowthWhat are embedded payments? Discover how they work, benefits, and examples