The terms integrated payments and Embedded Payments are often used interchangeably. But what’s the difference between them? We’ll share the primary differences of each model to arm you with all of the information you need to grow your software business with a better payments experience.
The payment model you select will depend on how your software company is set up and which pieces of the payments business you’re ready to take on. No one model is better than another; the factors that influence your decision are typically related to staffing requirements, implementation complexity, and operational investment to get started.
What are integrated payments?
Integrated payments (also referred to as referral payments) connect payment processing with point-of-sale (POS) system software and can sync with other important software systems allowing the business to consolidate important payment data. Integration ultimately makes the payment experience much easier and helps streamline the customer experience.
Integrating payments from one point across to the business’s other systems also creates a single source of truth for payment data, reducing errors and the time spent on manual data entry and reconciliation and reporting tasks. Integration is fairly simple and quick – occuring through
application programming interfaces (APIs) and software development kits (SDKs), allowing communication between the chosen payment processing system and other business systems.
Integrated payments offer a range of benefits to software companies without having to take on the burden of selling payments but still benefiting by bringing in additional revenue.
Are you looking to expand your software features and enhance the customer experience? Are your customers looking to offer a variety of payment methods without the need for additional terminals? Want to make sure your customers benefit from enhanced security protection connecting online and offline payments while also syncing that payment data across business systems? Integrated payments can help.
Consider these benefits and other considerations as you think about which model makes sense for your software business.
Benefits of Integrated Payments
- Streamlines business processes by automating data flow between systems
- Improved accuracy and reduced data entry errors
- Efficiency gains through reduced time spent on manual data entry and reconciliation, and reporting
- Limited Risk
- Minimal Investment
Additional Considerations of Integrated Payments
- Smaller monetization potential overall
- Little control over the customer payment experience
- Less control over dynamic payment options (compared to other models)
- Payments partner owns rights to customer payment contracts
For businesses looking to streamline their operations and provide a better payments experience, integrated payments can be a good place to start. The process is fairly simple and can be done in as little as one month. Once a software company has selected a partner and finished the integration, each time a new customer signs up, you will refer them to your payments partner and they’ll take care of the rest. They’ll get the merchant completely set up with a processsing contract and be ready to process within days. Keep in mind the payments provider manages GTM pricing, marketing, sales, and support.
What are Embedded Payments?
Embedded Payments refer to payments that are seamlessly integrated into a software platform. This allows users to make payments or transactions within the context of your software application or platform without needing to leave your environment to complete payment. In fact, your software subscribers typically don’t know that anyone other than your solution is involved in the payments process. The payment experience feels exactly like everything else within your software.
Embedded payments have become increasingly popular as experiences become more integrated. Bringing them into your software experience provides another revenue stream for your business as well as provides a more robust subscriber experience. It gives your software company much more control over your customer interactions and helps create more loyal customers.
Deciding to embed payments within your software experience means you’ll be taking on additional responsibilites that don’t exist with the integrated payments or referral model. Once you integrate, the software company is now responsible for pricing, marketing, selling, servicing, and managing payments for your subscribers.
Software companies ready to take this step gain more control over the customer experience, set payment pricing, and ultimately control more of the revenue stream. A variety of businesses have used Payrix to scale and monetize their payments functionality, driving strong merchant growth and improving their platform’s user experience.
Consider these benefits for Embedded Payments.
Benefits of Embedded Payments
- Better user experience through an intuitive, streamlined payment process
- More revenue control from customizable go-to-market pricing for payment processing
- Customizable/white labeled, configurable experience for complete payment service management – it feels like part of your software solution
- Faster, more seamless sign-up and onboarding for your subscribers
- Scalability, allowing the solution to grow with your software business and evolving customer needs
Additional Considerations of Embedded Payments
- More responsibility than integrated payments (referral model) – you now sell, price, market, manage, and service payments
- More staffing/dedicated resources required
Payrix offers software businesses all the benefits of Embedded Payments without the full investment and time it takes to become a PayFac®. Integration can occur in as little as 3 weeks up to 3 months. The time and resourcing investment depends on your software company.
And with a full-service provider like Payrix, companies get dedicated experts to help every step of the way, ensuring the initial implementation and ongoing payments experience is seamless for your software and customers. Your dedicated team will partner with you throughout the entire partnership helping you continue to scale and optimize payments as technology advances.
Grow through Embedded Payments with Payrix
Embedded Payments allow software companies to provide a to their customers without the administrative burden, friction for subscribers, and investement in technology and resources typically associated with using third-party providers or becoming a full PayFac®. Whether your company wants to improve its customer experience, streamline its operations, or build a new revenue stream, Embedded Payments can deliver all these things and more. works with software companies across various verticals every day, helping them pick the best Embedded Payments model that will grow and adapt with their business.
Learn more with our Complete Guide to Embedded Payments eBook that explains the differences between each payment model for software companies and what you need to know if you’re looking to expand beyond referral payments or PayFac-as-a-service.
