The emergence of embedded payments is reshaping how platforms position themselves within commerce, shifting from peripheral service layers to systems that control both the transaction and the surrounding customer experience.
This shift remains uneven, and much of the variation stems from how payments are integrated. Maverick Payments Vice President of Platform Growth Rachel Costello He made a sharp distinction between superficial integration and true inclusion, noting that many platforms continue to rely on approaches that fragment the user journey rather than unify it.
“With proven payment solutions, it creates this disconnect in the customer experience,” she told PYMNTS. “Users are forced to exit this software they already use, know and rely on every day. This friction reduces adoption and makes payments feel like an add-on rather than part of the core value of the platform.”
The consequences extend beyond experience to include the economic model of the platform. Fragmented systems disperse data, complicate reporting, and limit control over pricing and performance. As size increases, these inefficiencies accumulate.
Embedding payments directly into the workflow changes the customer relationship and revenue structure. Payments associated with invoices, subscriptions, and checkouts become part of daily operations, increasing conversion costs and boosting retention.
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Costello framed this shift in operational terms. “Once they become part of that customer’s daily operational workflow, they become tied to billing, subscriptions or checkout,” she said. “The platform becomes more valuable and also harder to replace, and this drives retention because switching costs become inherently higher. It also creates lifetime value because you are now participating in both software revenue and payments revenue rather than one monetization stream.”
Communication, partnerships and the limits of proven models
The path to embedded payments is not uniform. Platforms can be built in-house, partner with providers, or rely on standard extensions, and each approach presents trade-offs. Proven models may speed up deployment, but they often recreate fragmentation that restricts long-term value.
Therefore, communication has become an essential element in implementation. Unified APIs, which bring together access to processors, payment methods, and banking relationships, reduce engineering complexity and create a foundation for scaling without repetitive integration work.
However, technical simplification does not eliminate operational requirements. Costello said many platforms underestimate the responsibilities associated with payments, including underwriting, fraud management and regulatory compliance.
“One of the biggest misnomers in embedded payments is that you have to become PayFac,” she said. She stated that this endeavor presents a different level of complexity and responsibility. You can find a partner with the right operating model that absorbs a lot of this complexity for you, while still maintaining customer and brand trust.
Measure profitability beyond payout size
As embedded payments matures, benchmarking has become a differentiator between leading platforms and the rest of the industry. Costello identified a frequent mistake in relying on total payout size as a proxy for success.
“The biggest mistake many platforms make is that they only look at the size of the top payouts,” she said. “Trading volume doesn’t actually tell you the whole story about whether a portfolio is healthy or profitable. They really need to look at unit economics at the trader level.”
This level of scrutiny uncovers inefficiencies that can erode margins over time, including outdated pricing models and operational overhead. Platforms that focus on merchant adoption and profitability, rather than expansion alone, are better positioned to translate embedded payments into sustainable revenue.
From commodity to strategic growth engine
The strategic divide appears in how platforms conceptualize payments within their broader business model. For some, payments remain a job necessity. For others, they are a central product line that shapes growth, retention and customer experience.
Platforms that are aligning product development, go-to-market execution, and payments strategy can use embedded payments to enhance their value proposition. And those that isolate payments as a back-office function risk restricting both adoption and profitability.
Costello argued that this distinction is crucial. “This happens when the platform stops thinking of it as a commodity,” she said. “Payments impact revenue, impact retention, customer experience, data, all of which are very important to the platform as more than just a nice add-on.”
