Embedded payments are changing the way businesses operate, allowing any organisation to manage their money better, without relying on their bank – or actually becoming a fintech.
By letting businesses seamlessly integrate payment capabilities into their own products and services – and not requiring any traditional banking support – embedded payments can simplify an array of expensive, time-consuming and error-prone processes and offer new opportunities for growth.
That means banking outside business hours, real-time payments rather than batch processing, automatic reconciliation rather than manual checks, and access to payment methods usually reserved for licensed financial institutions.
So, whether you’re a small lender looking to speed up pay-outs and repayments, or a travel agent needing to reconcile thousands of holiday itineraries every month, you could give your business a competitive edge by understanding how to get the most out of embedded payments.
The question is, do you? At Modulr, we specialize in helping businesses understand and leverage embedded payments to unlock new potential. Here are nine ways you can get started with embedded payments and drive real value for your business.
Embedded payments enable any business to process and reconcile payments automatically.
In the past, you might have needed a bank to access a wide variety of methods or ‘rails’ that enable your business to pay and get paid quickly and securely. Today, by using the principles and technologies of open banking and embedded payments, you can tap into faster, smarter payment methods through a portal or API.
That might mean real-time cross-border payments via SEPA, cutting down on settlement times and costs. It could be the flexibility to adopt payment methods that best suit your customers' needs – whether that’s instant bank transfers, virtual cards, or mobile wallets. Or what about tailored direct debits, to initiate pull payments from subscribers without the potential for errors that come with Standing Orders?
With embedded payments, you can tailor unique pay-in and pay-out structures without hiring a bank. A popular method for doing this is through creation of unlimited virtual accounts, instantly. Whether you need one account or thousands, embedded payments make it easy to manage at scale.
For instance, companies like Lendable, which operates over 200,000 accounts with Modulr, can easily track transactions across their customer base, reconciling payments instantly, with accounts specifically created to process certain funds.
By embedding this capability, businesses can design solutions that adapt to new challenges and grow with them.
Why might a business need multiple accounts? One word: reconciliation. When payments are split between various departments, customers, or regions, managing incoming payments can become complex.
Embedded payments allow you to streamline your pay-ins and collections by allocating each payment into the right account automatically, making it easier to track and manage, even across a range of payment rails such as Swift, SEPA, Chaps or cards and across multiple currencies.
Alongside collection methods like Direct Debits and Open Banking Payment Initiation Services, real-time notifications and account updates mean that collecting payments becomes faster and more efficient, helping you manage cash flow and reduce manual effort.
Just as important as collecting payments is ensuring that your pay-outs happen smoothly.
With embedded payments you aren’t waiting for a third party service to process a transaction, especially when using automation alongside tools like Faster Payments and SEPA Instant, which deliver funds almost instantly.
For hard-pressed payroll, treasury and other finance teams with large-scale payment needs, such as lenders, payroll providers, or anyone using virtual cards for disbursements, this means less reliance on anyone outside your organisation and fewer delays as a result.
With embedded payment solutions, you ensure that your customers, employees, or suppliers get paid on time, every time, without the headaches of traditional banking delays. Wage advance supplier Level has embedded Modulr’s access to Faster Payments, meaning data doesn't need to be moved manually between payroll and payment systems and delayed by new checks and uploads. That means it can offer on-demand wages with pay-outs in under two minutes – days faster than if it processed via BACS.
One of the most significant benefits of embedded payments is the ability to automate reconciliation through instant payment data. Every transaction provides valuable information – whether you’re paying in or paying out. Embedded payment systems can allow you to collect this data in real-time, automatically updating your ledgers with directly integrating software and offering clear visibility over your cash flow.
Travel technology business Paxport uses Modulr’s platform to deliver 24/7, real-time payments on Pax2Pay, its automated merchandising and distribution system for the travel industry. This allows travel agents and tour operators centralised access to a wide range of payment methods and dramatically reduces their administrative and reconciliation costs.
One way to aid reconciliation is using virtual cards alongside embedded payment systems to quickly settle accounts, resolve discrepancies, and reduce delays caused by manual work. Cards can be generated in real time and tailored for a specific purchase within a specific time window, allowing for easy reconciliation. Automation here is particularly effective and can ensure fewer human errors and faster response times, keeping your business running smoothly.
Automation is a key advantage of embedded payments. By taking care of routine financial processes, such as invoice payments or customer refunds, you free up time to focus on more strategic activities.
Embedded payments can trigger automated processes that streamline workflows and reduce human errors. For example, with business lender multifi, Modulr was able to embed payments directly into multifi’s tech stack, meaning that customers could receive their loan only 72 hours after beginning the onboarding process, without manually sending files to a banking partner and waiting an unknown period for the payment to be released.
Similarly, Liberis is able to receive loan repayments from merchants at enterprise scale using Modulr’s split payments capability. Modulr's API platform allows Liberis to configure automated payment rules for each merchant account so that an agreed percentage of card settlement revenues are sent directly to Liberis, for the loan repayment, while the merchant receives the rest of the funds.
Embedded payments shine by simplifying complex financial operations. With the right tools, such as Modulr’s portal and API, businesses can reduce the friction when compared to managing multiple payment systems, banks, and financial partners.
By integrating your payment systems into one seamless platform, you eliminate the need to juggle various moving parts. This saves time and reduces the risk of errors, while allowing your business to scale up quickly without operational bottlenecks.
Security is a top priority when handling payments, and embedded payments offer built-in features that protect your business and customers. Modulr’s embedded payments can come with advanced security measures, including virtual cards, Confirmation of Payee, and robust fraud detection.
Additionally, as a regulated provider, Modulr ensures compliance with all relevant regulations, so you can trust that your payment processes meet the highest standards of security and oversight.
As your business grows, your payment systems need to grow with it. Embedded payments provide the flexibility to maintain seamless payment experiences as you scale, thanks to API integration and low subsequent expansion costs.
Whether you’re expanding into new markets, adding new products, or increasing transaction volumes, once you have got onboard with embedded payments it’s possible to handle increased complexity with ease.
At Modulr, we’re experts in embedded payments and are here to help you unlock the potential they offer. To learn more, speak to a member of our team, or explore the wealth of resources in our Knowledge Hub.