Published : 3 weeks ago, on 20/11/2024

By Paul Clarke, Chief Growth Officer at Cashflows

It is a widely accepted fact that humans have a natural attraction to beauty. Scientific studies have even proven  infants as young as two months old will prefer to look at conventionally attractive faces. Beauty comes in all different forms, too – whether it be a beautiful sound, taste, or smell. Mathematicians have been known to refer to equations as ‘elegant’. However, beauty is very rarely associated with the world of payments, as payments are often thought of as a necessity, like drinking water. When companies think about the design of payments, they prioritise efficiency and smoothness – the goal is for transactions to be swift and unobtrusive. In short, they should simply work without disruption.

Imagine payments that are not only swift and seamless, but also provide a premium, concierge-like experience, where the checkout process anticipates and meets the customer’s needs. Embedded finance is driving this shift, giving Small and Medium Businesses (SMBs) the resources to optimise transactions and improve customer interaction. The latest developments illustrate how embedding financial services into business platforms can both simplify the payment process and offer customers diverse, flexible payment solutions.

SMBs’ growing appetite for embedded payments

Embedded payments are gaining traction across the UK and Europe, with SMBs increasingly embracing integrated financial solutions. Research by Payment Systems Europe (PSE) and The Strawhecker Group (TSG) shows that 70% of SMBs are interested in adopting embedded payments, and 35% have already received offers. With 82% of businesses likely to adopt these options soon, the demand is driven by the need for smoother payment processes, better customer experiences, and staying competitive in the evolving digital commerce landscape.

Why does it appeal to them?

For SMBs, embedded payments offer more than convenience – they create a smoother, faster checkout experience that is far more aligned with the expectations of today’s digital consumers.

Instead of having to navigate through multiple steps – entering shipping details, choosing a payment method, confirming the purchase – before completing the purchase like in a traditional online checkout process, embedded payments can hugely simplify the process. By integrating various payment options directly into the checkout flow, customers are able to choose their preferred payment method – debit, credit, digital wallet, or BNPL – without third-party redirects.

This streamlined process reduces cart abandonment and, with financing options like BNPL at checkout, can boost average order value and conversion rates, making embedded payments a key driver of revenue growth.

Making the checkout process beautiful

One of embedded payments’ key strengths is the ability to “make the checkout process beautiful”. It goes beyond aesthetics to offer a smooth checkout process that is intuitive and seamless. It feels effortless for customers and easily integrates into the overall user experience of the website or platform.

With modern technologies like JavaScript libraries, SMBs can easily customise their payment processes to match their brand with minimal effort. This results in a checkout process that not only functions efficiently, but also enhances the brand’s identity and customer trust.

Flexibility is also at the forefront of the technology. Updates and optimisations can be made as often as needed by SMBs, ensuring that their payment processes evolve alongside their business. With features like mobile responsiveness, businesses can also ensure that their checkout process remains efficient and is optimised for all channels, whether customers are shopping on a smartphone, desktop, or tablet.

Overcoming Barriers to Adoption

Despite the clear benefits of embedded finance, SMBs face challenges in adopting this technology. Many are unaware of its advantages or view it as too complex or expensive to implement. There also remains a huge lack of awareness and understanding of how embedded payments can be integrated into existing systems.

However, innovations in technology are reducing these barriers. Simplified integration, developer support, and test platforms are making it easier for SMBs to adopt embedded payments. Additionally, a growing network of software providers offering embedded payment options is driving wider adoption, helping businesses grow and thrive within their communities.

What the Future of Embedded Finance Holds for SMBs

As the digital economy continues to advance, embedded payments are set to play a pivotal role in shaping SMB success.

With customers increasingly expecting smooth and flexible payment options, business that integrate the latest payment technologies will stand out in this competitive environment. Offering a streamlined, intuitive checkout experience will become a key factor in enhancing customer loyalty, encouraging repeat purchases, and driving sustainable growth.

Paul Clarke, Chief Growth Officer at Cashflows

About the author

Paul has a wealth of experience successfully leading product, business strategy, and innovation functions in the payments, eCommerce, and digital sectors. He was previously Executive Vice President for Product and Innovation at international payments solutions provider: Network International. Prior to this, Paul held leadership positions at key payment organisations, such as Barclaycard, Elavon, and Worldpay.

Having joined Cashflows in 2021, Paul is responsible for leading the product proposition, strategy, go to market and delivery functions of the business.