Latest Study Shows Integrated Payments Threaten Card Dominance

A latest study from Juniper Research has found that the global revenue from embedded payments for embedded finance vendors will reach $59 billion in 2027, from $32 billion in 2023, representing a growth of 84%.

The report, Embedded Finance: Key Trends, Segment Analysis & Market Forecasts 2022-2027, predicts that the growth of integrated payments will erode the dominance of cards within e-commerce.

This will be driven by rising consumer enthusiasm for alternative payment methods, creating a sizeable revenue opportunity for embedded finance vendors.

Embedded payments are where payment processing functionalities are embedded into the checkout process on a website, including alternative payment methods such as one-click checkout buttons via digital wallets or Open Banking payment rails.

The research identified the simplicity that one-click payments allow as critical to providing a strong user experience. Yet, this simplicity is under threat from the integration of too many payment options, creating a cluttered checkout process.

Research co-author Nick Maynard explains: “In order to rein in the expansion of different payment options at checkout, merchants looking to enhance their checkout process must focus on the most popular and lowest-cost-to-merchant options to drive their success.

“Focusing on instant payments linked channels will lower costs significantly compared to card payments and must be considered a top priority for merchants.”

The research also forecasts that, by 2027, 35% of embedded payments’ revenue will be from the B2B segment.

B2B payments have seen less implementation of new payment types to date, with complex accounts payable and receivable processes creating a difficult ecosystem to manage.

However, this lack of development means that the B2B market is a comparatively underserved market and must be a clear priority for embedded finance players as the market grows.

Embedded finance vendors must focus on bolstering payment integration with key B2B access channels, such as B2B e-commerce marketplaces and accounting software, to maximise their appeal in this high-potential market.