Transforming Transactions: The Future of Embedded Payments

Earlier this week, I had the pleasure of speaking at the FTT Embedded Finance & Super-Apps Europe conference in London, joining a panel titled “Transforming Transactions: New Ways to Pay.” It was a timely and engaging discussion centred on how embedded payments are reshaping the whole customer experience and becoming the starting point for broader embedded finance strategies.

The industry has undergone significant transformation for over a decade. When I started working with online payments, credit and debit cards were the only option. Now digital wallets are now outpacing cards in many markets, and new methods like BNPL (Buy Now Pay Later), account-to-account payments, and stablecoins are rapidly gaining momentum.

The conversation started with talking about what embedded payment means to each of us. For me, we talk about a “payment process”, but it’s just one part of the larger customer journey. That starts when the customer first visits your website or opens your app. Embedded finance enables the customer to take advantage of insurance or BNPL as part of the buying process - before they get to what is normally thought of as the checkout process. Embedded finance isn’t just some more payment options on top of traditional cards.

It can be disconcerting for anyone to understand what options they should offer, and so we next discussed how to decide what options should be made available. Stuart McLay from National Express mentioned that he gets so many approaches to add payment methods that if all of them were added, they would have over 50 different ways to pay!

Knowing your customers is key, as different demographics skew towards different options. For example, 78% of 16-24 year olds have Apple Pay or Google Pay, but that drops down to only 14% of 65+ year olds. Similarly, 25-34 year olds are 4 times more likely to use BNPL than those over 65+. Age is the most obvious differentiating factor, but of course there are other nuances. Martin Hyde noted that different countries have varying expectations - iDEAL dominates the market in the Netherlands and consumers there would expect it to be offered.

Personalisation can play a big part too of course, not just because we know more about the customer, but also because we potentially know how they paid last time. Hence the options shown can be dynamic - different for each customer based on what we know about them.

We next discussed what the advantages are of getting his right. It is amazing how little differences to the UX can have big implications. I remember an A/B test that we ran with Domino’s Pizza, simply changing the colour of the checkout button from red (the brand colour) to green (more of a ‘go’ colour). In percentage terms, the difference in drop-off was small but statistically significant. But for a business that has high order volumes, it translated into millions of pounds worth of additional revenue. For me that underlines how important getting the right UX is, and testing even little things like the order of payment options impacts customer behaviours.

Finally we talked about commercial VRP (Variable Recurring Payments) which has recently been in the news. For me this is an exciting development because it is an area where there is a significant improvement for consumers. Compared to other recurring payment methods, commercial VRP will allow consumers more control over payments by setting limits on the amounts, frequency and duration. And it is much simpler to change either merchant or bank compared to other recurring payment methods.

The panel made it clear that embedded payments are no longer a nice-to-have, but a fundamental part of a modern commerce strategy. Merchants need to think beyond the transaction and view payments as an enabler to better customer experiences, higher conversions, and deeper loyalty. As consumer expectations continue to evolve, the winners will be those who stay agile, personalise with intent, and test relentlessly.