Embedded payments are the future: is your business ready?

Digital payments continue to evolve, and consumers are here for it. If businesses or financial institutions are not equipped to deliver embedded payments, today’s customers will simply seek the ease and convenience of a seamless payment experience elsewhere.

A recent discussion between Hal Ramakers, SVP of Global Solutions at Brightwell, and Brian Riley, Director of Credit and Co-Director of Payments at Javelin Strategy & Research, probes deeper into embedded payments and what businesses can do to meet evolving needs in the global digital payment landscape, how to facilitate cross-border payments amid myriad regulatory infrastructures, and how to gear up their businesses for new user expectations in cross-border payments.

The importance of integrating global payments solutions into business product lines

The secret to building retention and loyalty is to innovate the consumer experience. As more consumers choose digital payments to conduct their everyday business, they want something that is seamless and streamlined, rather than having to jump from one platform to another.

“If you look at the industry today, most consumers work with third parties,” Ramakers said. “They’re leaving their banking app to send money, which is not an optimal experience.”

Embedded payment solutions allow customers to purchase items directly from their TV, pay for a cab ride, and even send and receive funds from all over the world, all without taking out their wallet. This trend will only continue to grow.

“There are over a billion people today that send or receive international money transfers. That’s about 30% of the global (consumer) population.”

“Globally, checks are still being sent across borders for vendor payments and consumer payouts. The pandemic shifted the world and moved us five years forward. As a result, consumers changed how they interact with companies and their financial institutions. They’re looking for embedded solutions when they conduct business whether in their bank accounts, through their banks, or through a program managed using a digital solution.”

Embedded payments solutions as key drivers for customer loyalty

Embedded payments solutions, which allow customers to seamlessly and securely make transactions within a product or service, can enhance customer loyalty by providing a convenient and efficient payment experience. By integrating payments into the customer journey, businesses can improve overall customer satisfaction and increase the likelihood of repeat purchases.

“If it’s a service that a financial institution doesn’t offer, the consumer’s going to find it elsewhere,” Riley said. “Do you risk having that customer go to a money transfer operator, where they can get distracted by cross-sells that happen within their ecosystem? Having that as a service option embedded becomes a no-brainer.”

“From the consumers’ side, they want to conduct the business where they get paid,” said Ramakers. Getting paid within an app and having the option of global remittances can be a convenient and seamless experience for users, making it a sticky feature that encourages continued usage.

“They go in (the app) to check their balance and realize they just got paid. They then remember that they have a family member in the Philippines that they need to send some money to, so they want to send money right through the app. This process is more streamlined than signing up for another money transfer application in addition to their banking app.”

Riley hit on another aspect of embedded payments that provides valuable insights.

“When you get the social aspects of this, too, it gets fascinating because people align themselves to the components of the products they need,” he said. “Making my mortgage or rent payment is an unemotional experience, and it’s just a function of what I have to do when paying bills online.”

“But moving $500 to my mother in the Philippines, for example—that’s a need-to-have function. It improves the whole stickiness of that relationship where the household payment is a commodity item. This is a special item a person wants to do, and they’re going to be doing it for years to come.”

“It’s also important to understand the cultural needs of your users and also why cross-border payments are important,” Ramakers said in picking up that thread. “In many cases it’s about supplementing and taking care of their family incomes, the family unit, etc.”

“Although one person is living here in the U.S., the rest of their family is still in the Philippines, India, or even Latin America. They are supporting their families back home.”

Remittances often provide crucial financial support to families and can help improve their standard of living. It plays a vital role in supporting family members by providing financial assistance for basic needs such as food, housing, and healthcare. In many cases, it can also help families afford education and other investments in their future, improving their long-term prospects and economic stability.

Utilizing cross border payments data to uncover growth opportunities

Analyzing cross-border payment transactions can uncover a treasure trove of opportunities.

Many businesses lack the data necessary to see what their customers are doing when they send and receive payments.

“A lot of companies don’t realize how big the cross-border industry really is. When you start talking about 13% of people, sending money or receiving money, it’s a large number and you have to look deep into your data to be able to see that,” Ramakers said.

“It could be your ATM transactions where money is being pulled out and going to a retail location that’s out there or a POS transaction that’s occurring. It’s interesting when we’ve looked at some key companies interested in understanding what their consumers are doing.”

By utilizing cross border payments data, businesses can gain valuable insights into customer behavior and preferences across different markets, which can help identify untapped growth opportunities. Analyzing transaction data can reveal patterns and trends that businesses can leverage to develop targeted marketing strategies and tailor their products and services to meet the specific needs of customers in different regions.

“When we look with our partners at the data, we see all these transactions. It becomes very enlightening to a company when they start looking at the data and realizing what is happening and it presents some great opportunities for sure.”

That said, we want to enable banks, program managers, and corporations to keep those users in their ecosystem.

Knowing where to begin is a common challenge for corporations

When it comes to developing an effective embedded payments solution, there is no one-size-fits-all product. Business-to-consumer (B2C) and business-to-business (B2B) transactions have their own payment nuances that need to be addressed.

“There’s a couple of things about cross-border payments that are significant,” Riley said. “First, you have two worlds. You have B2B and B2C — those different ecosystems bring some specific challenges. What you need is to have the infrastructure that makes it work seamlessly.”

“You can’t have someone try to make a payment in a foreign country and then get bogged down in slow or ineffective processing.”

“So, consider this: there’s over 200 countries in the world that have different compliance requirements. Then there’s the data that’s needed to complete those transactions. This isn’t just a simple build. For the average company, it can take up to a year to build their own solution.”

That’s why many banks, program managers, and corporations are turning to remittance and disbursement platforms to bring solutions to market for their consumers far faster than developing them in a silo. Further, platforms that collaborate and partner with the right payment networks will fuel more innovation within the cross-border-payment space.

“A good cross-border solution is difficult to create with a single partnership,” Ramakers said. “You need to integrate into multiple connection points, which is one of the things that makes it so complicated. You need to have access to bank account payments.”

“At Brightwell, we do that in over 180 different countries globally. We also have access to over 290K cash-out locations globally. And with the addition of our recent Visa partnership, that’s going to hit over 5 billion card account endpoints that lead into an account.”

“We’ve integrated into over six different providers, and on average, that’s a real drain and it’s extremely expensive from a product and development perspective. You take five to seven months to do those integrations, and that’s a hard case to build.”

“Once you start working on the integrations, you’ve got to deal with the compliance components behind it. There’s a lot of heavy regulation around making cross-border payments, and that expertise isn’t based in a lot of the companies and the financial institutions today.”

Anti-money laundering (AML) and Know Your Customer (KYC) are some of the many compliance and regulatory elements that are required to enable digital remittances to work safely and securely.

“How do you simplify that? This is one area where we’ve focused on. We’ve taken our experience and asked ourselves: How can we take what we have learned and our expertise? How can we apply that to the industry? That’s what we’re doing today with our new ReadyRemit platform.”

After years of servicing global workers and integrating with countless remittance partners, Brightwell understands the arduous process of building out a compliant and user-focused payout solution. ReadyRemit solves these challenges, making it easier than ever to enable cross-border payments.

Integrating global payments into companies is more possible than ever

“First, if you’re going to integrate it into your app, ease and cost are priority,” Ramakers said.

“You need to find a platform like ReadyRemit where we have that capacity and we’ve done the work for you. We are integrated into all of the best rails across the board. We have simplified the experience.”

“We’ve created APIs and SDKs where now clients can integrate the service easier and faster in 30 days or six weeks into their solution. You need to find a creative solution to that and, secondly, compliance. Remember: These are not just domestic payments.”

“We’ve learned a lot in 10 years in our experience dealing with cruise lines and global crew members. So over that period, we’ve been doing substantial cross-border payments around the world. We had our own card program and still do this today. Now we see that there is a need to enable other companies to take advantage of the kinds of expertise that we have. Most companies out there are more about building their brands. They have partial networks, and they have pieces of the program. There hasn’t been a great unification aggregation platform to bring it all together and make it simple and easy. That’s what it really comes down to,” Ramakers said.

“There isn’t one provider that can give you the fastest payments into every corridor, or the best coverage globally into a corridor. By using an aggregation and embedded platform like what we do with ReadyRemit solves a lot of those problems for you.”

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