It’s easy to forget that tapping to pay with your phone or watch is a relatively new power, or that leaving home without a wallet full of cash and cards could be anything other than a mistake. We've come a long way in payments in a short time.

But despite the pace of innovation on the consumer side, business payments remain stuck in the past. Manual uploads, batch processes, siloed systems and no real visibility or control… if that sounds familiar, you’re not alone. In fact, Modulr research shows that for many European businesses, payments are still one of the most painful parts of their operations.

There is a better way. Embedded payments are transforming how businesses handle pay-ins and pay-outs – from accounting and payroll to travel and gig platforms. In this blog, we’ll explore why the old model is broken, and what a new embedded approach can unlock.

• The current reality: business payments don’t work like they should
  
  
• Embedded payments: purpose-built for modern business
  
  
• The huge commercial opportunity
  
  
• How Modulr helps

The current reality: business payments don’t work like they should

Modulr worked with payment consultancy Flagship Advisory Partners to understand the state of B2B payments across five verticals: accounting, payroll, gig platforms, travel, and merchant payments. The findings were clear: most payment processes are disjointed, manual and underserved by incumbent providers.

The headlines from the research are at both staggering and familiar:

• 85% of SMEs still rely on banks for supplier payments, even though most find the experience poor.
  
  
• Payroll workflows are heavily fragmented, with sensitive data often sent over email, and payments uploaded manually.
  
  
• Gig platforms use a patchwork of providers, creating delays, poor UX and high costs.
  
  
• Travel businesses struggle with partner payouts, juggling multiple vendors, currencies and time zones.
  
  
• Payment service providers depend on 20+ banks, manually reconciling payouts in spreadsheets.

These inefficiencies aren’t just frustrating – they lead to higher operational costs, slower settlement times and compliance risks. What's more, the technology to be better already exists.

Embedded payments: purpose-built for modern business

Embedded payments are designed to mitigate all of those issues, and more. By integrating pay-ins and pay-outs directly into your platform or back-office software you can empower finance teams, cutting out the need to waste time toggling between tools, manually sorting through error-strewn file uploads and reconciliation challenges or waiting on third parties to process payments through channels that take days, rather than an instant.

The most well-known potential benefits of embedded payments include:

• Real-time payments and instant notifications
  
  
• Automated reconciliation within your accounting or payroll system
  
  
• Multi-currency accounts and smart FX for international transactions
  
  
• Payment initiation from within your own platform or product
  
  
• Clear visibility and control over every transaction

Crucially, a defining characteristic of embedded payment is that all that financial heavy lifting can be done without needing to be a bank. Thanks to fintechs such as Modulr, which operates under strict regulatory frameworks and financial licensing, digital (or electronic money) accounts can be combined with virtual card issuing or access to payment networks such as Faster Payments or Chaps, allowing you to pay and get paid without involving a traditional bank as an intermediary.

The huge commercial opportunity

European accounting platforms rated the relevance of embedded payments at 8/10; it’s not just a nice-to-have. It’s becoming a competitive necessity.

And as a whole, the opportunities for embedded payments are huge, with data from Boston Consulting Group¹ valuing the global payments market at $2.3 trillion by 2028. Within this market, B2B payments could account more than half of the transaction value².

For software providers, embedding payments unlocks new revenue streams, creates stickier products, improves user experience, and reduces churn.

For operational teams, it cuts admin and makes finance functions scalable.

For lenders, it unlocks the power to offer instant pay-outs.

For retailers, it enables access to Buy-Now-Pay-Later, alongside a host of other credit or lending opportunities.

For accountants and payroll bureaus, it automates swathes of work and allows teams to focus on tailored, high-value consultancy services.

How Modulr helps

Modulr is built for embedded payments. As an Electronic Money Institution regulated by the Financial Conduct Authority, and with settlement accounts at the Bank of England, Modulr calls upon direct access to UK and European payment schemes, to provide clients:

• Real-time, API-driven access to Faster Payments, Bacs, SEPA, SWIFT and other payment methods
  
  
• Multi-currency accounts and automated reconciliation tools
  
  
• Virtual and physical card issuance
  
  
• Fraud prevention and compliance tooling

To fix broken payments requires speed, resilience and connectivity. Technology that can provide robust and reliable payments whether receiving or paying out, and that supports each payment with powerful data that grants financial teams with assurance and insight, rather than burden them with manual work and painful reconciliation.

Say goodbye to broken payment processes

Discover how Modulr can help you embed fast, flexible, and fully compliant payments into your platform.

1. Fortune Favors the Bold: Global Payments Report 2024 | BCG
2. B2B Payments Transaction Market Size to Hit USD 3.79 Trillion by 2034