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Businesses don’t have the time to sit around waiting to get paid, and that includes suppliers and platforms. They need funds to cover expenses like payroll and supplies, while going after opportunities to grow their business. Embedded payments offer a solution to many of the issues facing those on all sides of B2B transactions. It’s all about empowering suppliers and platforms to sell now, collect now – while still giving buyers what they want (net payment terms.) How? Through embedded payments. Let’s explore what the benefits of embedded payments are.
What Are Embedded Payments?
Embedded payments enable companies who are not financial institutions to include financial services or financial products in their digital experience. It makes buying faster and easier for customers, while providing an opportunity for businesses to streamline backend processes and generate more revenue. While the advent of the Internet age made this type of process standard for B2C purchases, it’s only recently rapidly gained popularity among B2B transactions as well.
In fact, according to Forrester, U.S. B2B e-commerce transactions are expected to reach $1.8 trillion by 2023, accounting for 17 percent of all B2B sales in the country. Places that handle digital B2B payment offerings, including B2B marketplaces, apps, and ecosystems (MAEs), know that it makes sense to facilitate payments in any way possible, which is only fuelling the growth of embedded payments.
What Are the Benefits of Embedded Payments?
One in three B2B buyers purchase at least half of their products on business-to-business marketplaces. It’s safe to say we’re seeing a boom in the marketplaces, portals, and apps powering these experiences. As this space continues to grow, those in the industry more clearly see just what are the benefits of embedded payments and reasons why they should implement it in their check-out process.
Increased stickiness
In early iterations of B2B marketplaces, placing orders digitally was common, but the payment was handled offline. Excluding the payment option from the online buying experience decreases stickiness and value. Handling payments offline makes it more complicated for the buyer to complete the transaction, reducing the likelihood they will follow through and decreasing platform stickiness. One of the major advantages of an embedded payment model is increased platform stickiness, which results in higher volume and totals of transactions.
Additional revenue streams
Another benefit of embedded payments is that it provides the opportunity to drive revenue growth by monetizing transactions through payment processing fees, partner revenue share agreements, and offering additional services to suppliers like reporting and analytics. Embedding payment methods helps keep customers engaged, ensures buyers and sellers get paid on their preferred terms, and differentiates platforms from their competitors while providing revenue opportunities.
Increased convenience/UX
What are the benefits of embedded payments from a user experience standpoint? Well, especially for old school industries that may not be used to incorporating online technology into their workflow, implementing an embedded payment solution can vastly improve the overall user experience of their customer base.
Marketplaces, apps, and ecosystems are realizing that while embedded finance does make things easier for the tech-savvy, they also need to bear in mind that the solution they choose needs to be intuitive – especially for those old school industries – or users won’t adopt it, and thus no one will benefit from embedded finance.
As buyers and suppliers continue to expect the same speed and ease of digital payments in their B2B transactions as they get with B2C purchases in their personal lives, implementing an embedded payment system helps streamline the buying process and increase sales.
Increased customer sign-up and customer loyalty
Offering an innovative financial service like embedded payments is beneficial from a repetitional and brand standpoint. Customers are more likely to return to a platform with a seamless payments experience, and it gives you a competitive advantage. Companies that don’t adopt (or don’t adopt quickly enough) an embedded payments strategy, risk losing business to more forward-thinking competitors.
Improved analytics
All businesses need data to make informed decisions and learn about customers – B2B marketplaces, portals, and apps are no different. By keeping payments within the user experience, it provides a rich source of information that can answer questions about transactions, users, and the sales cycle.
When a business knows these details, it can use that information to make changes to its product and marketing strategy to not only drive more sales, but more high value sales, in addition to increasing stickiness.
In addition, the right embedded payments system should also simplify the consumer feedback process. This will help companies to more thoroughly understand their customers’ pain points to improve the user experience. It also makes it easier for them to inform their future development, and is just one aspect of what the benefits of embedded payments are.
Safer, more secure transactions
The best embedded payment solutions feature bank-grade security and more to keep customers safe while protecting themselves. Processing online payments carries a certain level of additional risks, what with cybersecurity risks on the rise. Partnering with an embedded payment company can help solve some of the hassle that goes along with storing sensitive data, credit card fraud, identity and information theft. In addition, by partnering with an embedded finance company, apps, ecosystems, and marketplaces can lessen their financial burden and financial risk as there’s no need to do their own underwriting – the fintech takes care of those details using the platforms’ data.
Embedded Payments for B2B
Whether it’s a vertical marketplace connecting buyers and suppliers online or a finance platform solving challenges facing a particular industry, becoming a leader in the B2B e-commerce space means getting to market fast – and having an embedded finance solution will be an expected part of the experience. You can now more easily see exactly what the benefits of embedded payments are.
The FundThrough Approach to Embedded
The biggest benefit of embedded payments with FundThrough is that it gets invoices paid in days to unlock cash flow for platforms and their suppliers, while allowing buyers to pay when they want. Suppliers can access fast payments and buyers flexible terms inside platforms.
As the largest AI-powered invoice funding fintech in North America, FundThrough has established payment infrastructure, workflows, underwriting, and data, as well as experience across industries simplifying complex B2B payment experiences typically done offline. With fast, flexible payments, you’ll be able to drive more volume, stickiness, and ultimately growth for your platform.
Interested in Embedding FundThrough?
FundThrough’s embedded payments solution offers seamless integration into platforms of all kinds. While payments are causing pain for many marketplaces, portals, and apps, embedding instant invoice payments offers a solution, while adding more value for buyers, suppliers, and platforms alike.
Learn more about our approach to embedded invoice financing and schedule a meeting with Zuri Harris, our Partnership Development Lead, to discuss your needs. Contact her at [email protected] or 778-747-0175