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Embedded Payments, Embedded Finance, Embedded Lending—we've heard these terms on every fintech stage over the past few years. But this is not just industry jargon or a passing trend. It is fundamentally reshaping how software companies operate, scale, and position themselves for long-term success.
Across industries—loan management, insurance, payroll, healthcare, hospitality, and beyond—software platforms are recognizing that payments are no longer just an auxiliary feature but a core part of their customer experience and revenue strategy. Traditionally, these companies relied on banks or third-party processors for payment services, but as embedded finance matures, it’s becoming clear that platforms must take control of their payment infrastructure or risk being left behind.
At its core, embedded finance integrates financial services such as payments, lending, and payroll—directly into software platforms. Integrating financial services directly into software platforms enables businesses to offer tailored payment experiences without redirecting users to external sites. This simplifies workflows, removes barriers, and meets customers right where they are so they can focus on operations.
A well-integrated embedded payment system can significantly enhance customer retention by making the platform more indispensable to users. It also opens new revenue streams, as platforms can monetize payment transactions, potentially adding substantial income based on transaction fees.
The industry shift is no longer theoretical. McKinsey projects that embedded finance will generate over $40 billion in annual revenue by 2026, as platforms increasingly integrate financial services into their ecosystems. Deloitte’s Embedded Finance Report further highlights that software-led payments models will soon become the standard, rather than a competitive advantage, particularly in industries serving small businesses.
Let’s look at the key considerations software platforms need to take into account when choosing the right partner.
Embedded finance is already transforming the software industry, but 2025 will be a turning point for platforms looking to harness it for sustainable growth. Why?
First, the demand for all-in-one software solutions is increasing. Businesses now expect software platforms to integrate financial services natively, rather than forcing them to rely on external processors. Those that fail to adapt risk losing market share to platforms offering more comprehensive financial capabilities
Access to capital is becoming a major differentiator. Small and medium-sized businesses (SMBs) continue to struggle with traditional lending, due to long approval processes and strict credit requirements. Embedded lending solutions allow software platforms to offer capital directly, unlocking new revenue streams and increasing customer retention.
Finally, infrastructure has caught up. Previously, integrating payments and financial services required extensive development resources. Today, Fintech-as-a-Service (FaaS) providers enable platforms to embed payments in weeks rather than months—without requiring deep expertise in banking or regulatory compliance.
For software companies, the decision is no longer if they should integrate payments but how to do it effectively.
One of the biggest challenges software companies face is fragmented payment stacks. Many rely on separate vendors for payment processing, compliance, reconciliation, and banking infrastructure.
A platform must decide whether to:
✔ Work with a full-stack provider that offers payments, compliance, underwriting, and capital in one solution.
✔ Build an ecosystem of multiple partners, customizing each component but increasing complexity.
McKinsey’s 2024 Embedded Finance report highlights that software platforms working with multiple payments providers face integration bottlenecks and increased security risks, while those opting for full-stack partners see faster go-to-market execution.
Selecting the right embedded payments provider is one of the most important strategic decisions a software company will make. Speed and scale should be at the forefront when evaluating partners. Partner that enable faster merchant onboarding, automated workflows, and optimized payment processing gain a competitive edge. The right provider should:
Payments are more than a feature—they are a profit center. SaaS platforms embedding payments see:
✔ Higher customer retention, as payments become integral to the platform experience.
✔ New revenue streams, with transaction fees adding thousands of dollars per customer.
✔ Expanded market opportunities, as lending, capital, and issuing services unlock higher customer lifetime value (LTV).
A 2023 PwC study found that platforms integrating embedded payments generated 5-7x more revenue per user than those without payments integration.
For example, SaaS platforms serving small and medium-sized businesses (SMBs) can generate $5,000+ per SMB in additional annual revenue by monetizing payment processing fees alone. When combined with lending, issuing, and payment acceptance, the lifetime value (LTV) of each customer can increase significantly.
According to Deloitte’s Embedded Finance Report, compliance concerns remain a top priority for 68% of software executives, reinforcing the need for payments partners with deep regulatory expertise and the infrastructure to handle ongoing compliance updates.
Experience with compliance and security is non-negotiable when selecting an embedded payments provider. The provider must adhere to industry standards and regulations that meet regional and global requirements to protect sensitive data and maintain user trust. Robust security measures and a proven compliance track record are indicators of a reliable partner.
For example, a provider with built-in compliance and underwriting can accelerate merchant approvals, helping businesses begin accepting payments more quickly.
Each industry has unique payment challenges that require customized solutions. The needs of a loan management platform differ significantly from those of a healthcare platform. This includes offering market-specific regulatory guidance to alleviate compliance challenges, designing custom onboarding processes that resonate with the software platform’s user base, and aligning payment workflows with existing business operations to avoid imposing generic solutions.
Understanding the unique pain points and requirements of each industry allows for customized solutions that address specific challenges. Payment workflows should integrate into existing business operations rather than requiring software platforms to adjust their models to fit a rigid payment structure.
As software companies grow, expanding into new markets requires an embedded payments partner with the right infrastructure to support international operations. The ability to accept multiple currencies is essential, allowing businesses to process payments efficiently across borders while reducing foreign exchange friction.
Fast compliance approvals play a crucial role in global expansion, ensuring that software companies can enter new markets without long approval delays or excessive regulatory roadblocks. Additionally, localized payment methods—such as region-specific digital wallets and bank transfer options—ensure that users in different geographies can transact using the methods they trust most.
U.S. Bank’s embedded payments report highlights how embedded finance is driving international business expansion for software platforms, creating new revenue opportunities while making it easier for companies to operate at a global scale. As regulations evolve, the ability to navigate compliance and multi-currency operations will be a defining factor in market success.
Beyond infrastructure, a payments provider should be continuously innovating, introducing new features and capabilities that enhance operational efficiency and user experience.
Supporting various payment methods and currencies ensures that users have flexible options, enhancing the platform's appeal. Continuous innovation and the introduction of new features keep the platform competitive and responsive to evolving user needs. For example, advancements in technology, such as low-code and no-code tools, are making it easier for software companies to integrate payment solutions quickly and efficiently, reducing time to market and lowering technical barriers.
A key advantage of embedded payments is the ability to maintain full control over the user experience and design. By customizing interfaces and workflows, software platforms can ensure consistency with their branding and cater to specific user needs. This level of control differentiates their services in a competitive market. A modern, intuitive user interface (UI) and user experience (UX) are vital for customer satisfaction.
Equally important is robust technical support and access to learning resources, ensuring that software platforms can fully leverage their payment capabilities. A provider that prioritizes responsiveness and education enables businesses to optimize payment flows, troubleshoot issues effectively, and adapt to new financial technologies with confidence.
An ideal embedded payments partner offers responsive support and extensive learning resources, empowering platforms to address issues promptly and optimize their payment systems effectively. This agility minimizes operational bottlenecks and enhances overall efficiency.
Choosing the right embedded payments provider in 2025 requires a comprehensive evaluation of the provider's capabilities, including support for multiple financial products, global reach, customization options, compliance expertise, and a commitment to innovation.
Partnering with a Fintech-as-a-Service provider like VoPay, enables software platforms to launch embedded payments and financial services faster with white-label solutions, direct underwriting support, and a full suite of financial products.
With ready-to-integrate APIs, enterprise-grade security, and industry-specific expertise, platforms can go live in under two weeks, accelerating time to market and unlocking new revenue opportunities immediately. Instead of diverting internal resources to build a payments infrastructure from scratch, VoPay allows you to stay focused on your core offerings while expanding into new markets with confidence.
