Embedded payment solutions are built into your ecommerce platform. While some payment gateways require you to integrate a third-party-branded service or redirect users to a new web page to enter their credit card information, embedded payment gateways enable secure payment directly within the checkout window.
Increasingly, embedded payments are the norm, with the total transaction value they handle forecast to reach $228 billion by 2028, according to a Juniper Research report—an increase of 148% from 2024.
Using an embedded payment platform like Shopify Payments lets you add custom content and fields to your checkout flow, surface upsells, and reduce customer friction by keeping them on the same website from browsing to buying. In this article, you’ll learn how embedded payments work and how they can help your business boost revenue.
What are embedded payments?
Embedded payments are checkout processes that allow customers to complete transactions without leaving a company’s site or app and without encountering a third-party payment processor’s branding. They’re a type of embedded finance—a financial service built into a non-financial platform.
With embedded payments, customers enter credit card information on the checkout page rather than getting directed to a third-party gateway or hosted checkout page. Additionally, unlike third-party integrated payment systems that have their own branding, an embedded payment gateway is either native to your ecommerce platform or white-labeled. White-labeling means that once you’re set up with an embedded payment provider, your checkout screen exclusively features your store’s branding.
For example, a native payment processor like Shopify Payments offers embedded payments for ecommerce stores. A non-native embedded payments provider typically connects to your store via a payment API.
Benefits of embedded payment solutions
The benefits of embedded payments include better customer experience and greater customization options than when you rely on a separate payment processor. Read on to learn why businesses are embracing embedded solutions and what they can do for you.
Customization options
When you partner with an embedded payment provider or use a payment solution that’s native to your ecommerce platform, you can customize your checkout to suit your needs. You might want to prevent customers from using gift cards on certain items, or only offer buy now, pay later (BNPL) options to customers if their carts reach a certain total.
With Shopify Payments, for instance, you can tailor your checkout with Shopify’s Payment Customization Function API, which facilitates:
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Payment customization. Decide which payment options (credit cards, gift cards, bank transfer, etc.) are available to customers for certain transactions (e.g., disable gift cards during special sales).
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Customizable payment terms. Set payment terms so customers can pay for items at a later date.
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Review requirements. Ensure that orders that meet special requirements (such as those containing certain items or exceeding a certain value) are flagged for manual review automatically.
Better user experience
Whereas hosted payments involve redirecting customers to a separate payment gateway, and integrated payments may include third-party branding, embedded payments make the payment flow feel like a natural part of the ecommerce experience.
By completing transactions on the same site where they did their shopping, customers get a cohesive experience. There’s no unexpected payment page from a third-party provider that could give them second thoughts about sharing their personal data. Plus, retaining the same branding on your checkout page as the rest of your site creates a consistent brand experience, which can help reinforce brand trust.
Operational simplicity
An embedded payment solution can reduce the complexity of your ecommerce back end. Consider Vin Chicago, a wine shop that managed an increasingly complex web of technology systems as its operations expanded. "We had four or five different pieces of software if you counted them all," says owner Peter Schwarzbach. “Our point-of-sale software, our website, our ecommerce back end, and our credit card processing were all separate systems.”
By replacing multiple systems with a unified platform on Shopify—including its native embedded payment solution—Peter estimates the company reduced their software costs by 20%. “We used to celebrate if we could save three or four basis points with a new credit card processor. We’re saving 30 basis points with Shopify, which is just unheard of,” Peter says.
Embedded payment solutions FAQ
What does an embedded payment system do?
Embedded payment systems allow online customers to check out without leaving a website or app. They’re built into software platforms to ensure customers a fast and secure experience within a company’s own ecosystem.
What are embedded payment capabilities?
Embedded payment capabilities help brands improve customer experience, leading to better conversion rates. Because they’re built directly into an ecommerce platform’s software, they give store owners full control of branding and UX. Embedded financial solutions can also help businesses save money on transaction fees.
What are the 4 types of digital payments?
The four main types of digital payments are mobile payments (smartphone applications like Apple Pay), bank transfers (such as ACH and wire transfers), credit/debit card payments, and contactless payments (NFC-technology-enabled transactions, such as tapping a smartphone).
