What is Embedded Financing?
No matter how much time your customers spend shopping, they want the checkout experience to be as smooth and fast as possible. If you run an e-commerce platform, you can expect as much as 82% of shoppers to abandon their carts if the checkout process is complicated. Embedded financing can make it easier for your customers to interact with your business. Here’s how it works.
What Is Embedded Financing?
Embedded finance involves the use of financial services in non-financial offerings. A common example is embedding payment options at the point of sale so customers can more easily complete a purchase. Restaurants and retailers, for example, can use embedded financing for one-click payments for greater convenience.
Embedded financing has been around for a while in the form of airline credit cards and payment plans for high-dollar items. Now, business owners can offer fast, reliable payment options without the need to direct customers to a third-party platform.
Business leaders can also use embedded financing to create payment plans. Customers can purchase high-value products and then complete their purchase in installments through the same checkout platform. This can help you maintain cash flow while building customer loyalty.
Embedded Financing vs. Integrated Payments
Some retailers may already use integrated payments at the point of sale. This means you have a payment processing platform that integrates into your point-of-sale system. But integrated payments still require two separate systems, as well as APIs and other technical features to keep separate platforms working in harmony. Embedded payments are built directly into your point-of-sale software, allowing for a much smoother customer journey.
Benefits of Embedded Financing
As a merchant, you can benefit from embedded financial systems. When you offer embedded finance, you can expect to see several improvements to your business processes.
Enhanced Customer Journey
Your customers will notice the difference. Embedded financing will allow for a faster, smoother checkout process, which can help you build customer loyalty.
Rapid Onboarding
Depending on your business, you can use embedded financing to offer membership options and seamlessly onboard new members. You’ll also have access to data you can use for marketing.
Seamless Integration
Embedded payments are built natively into your suite of products. As a result, there’s no need for third-party apps, ensuring a cohesive customer experience from start to finish.
Data Insights
With embedded finance, all the transaction data you need is built right into your platform. There’s no need to consult a third-party provider for analysis, which can give you better insights into your company’s revenue.
Safe, Secure Checkout
Most embedded finance providers offer advanced security features. Additionally, with fewer integrated programs, you can help minimize your vulnerability to cyberattacks. Customers will appreciate the fraud protection and may grow to trust your business even more.
Transforming Your Checkout Process
Your point-of-sale system can become a strategic tool to help your business. Some merchants take advantage of a dual pricing or surcharging model that mitigates the impact of credit card processing fees. Now, you can also use embedded financing to make your checkout experience as smooth as possible, fostering deeper customer loyalty and bringing your business further into the twenty-first century.
