Traditional vs Embedded Payments: A comparative analysis

Traditional vs Embedded Payments: A comparative analysis

7 May 2024 in Blog

by Ludovic Plisson

Share This Story, Choose Your Platform!

When shopping online, the way you pay matters as much as your purchases. Let’s explore the differences between traditional payment systems and embedded payments in this ‘Traditional vs Embedded Payments’ comparison. This analysis will clarify why embedded payments are increasingly becoming the preferred choice for businesses and consumers alike.

Explaining traditional payment systems

In a traditional payment system, the process is quite disjointed. Here’s how it typically unfolds:

  1. Product Selection: You find a product you like and add it to your cart.
  2. Checkout Process: You hit checkout when ready to pay.
  3. Redirection: Here, the process complicates. The site redirects you to enter payment details on a page like PayPal, Klarna, or Stripe.
  4. Entering Details: You manually input your credit card or bank details.
  5. Confirmation: After processing, you return to the store’s website to see your order confirmation.

This process introduces several pain points. It’s slow and each step can lead to errors. Also, site redirection can unsettle customers.

Challenges for online shoppers

Slow and complex processes deter buyers. If a checkout takes too long, customers will leave. In 2023, a staggering 70.19% of shoppers abandoned their carts globally due to cumbersome checkout experiences (Omnisend)​.

Extra steps increase frustration. About 22% of consumers abandon a cart if the process is too long (Baymard Institute).

Website speed is critical. A slow-loading page is disastrous. Up to 90% of shoppers will leave a purchase if a site loads too slowly (Cloudways).

Addressing these issues is crucial for improving customer retention and reducing abandonment rates.

 

Streamlining online shopping with embedded payments

Embedded payments revolutionize the payment process by integrating it directly into the website.

  • Seamless Integration: The payment interface is already part of the website you are using.
  • Saved Information: Securely saves your details for future use.
  • Instant Processing: Processes payments instantly within the site.
  • Immediate Confirmation: Displays your confirmation on the same page immediately after payment.

Example of embedded payments in action

Imagine buying a book from a renowned online bookstore. With embedded payments, you select the book, checkout, and pay immediately with your saved details. Confirmation is instant, with no redirects or need to re-enter card details.

 

Benefits of embedded payments

Embedded payments streamline the purchasing process:

  • Reduced Friction: They eliminate unnecessary steps.
  • Increased Conversion Rates: Fewer steps reduce the likelihood of cart abandonment.
  • Enhanced Security: Secures payment details effectively.
  • Improved Customer Experience: The process is quick and hassle-free, enhancing satisfaction and loyalty.

 

Europe’s leap in embedded payment adoption

Europe is seeing significant growth in embedded payment adoption, driven by consumer demand for seamless transactions. The market is projected to reach $58,464.5 million by 2029. Notably, the hospitality and retail sectors are rapidly adopting this technology, enhancing customer satisfaction by simplifying transactions.

Driving Innovation: Consumer demand for frictionless service experiences pushes the market toward embedded payments.

Technological Advancements and Regulatory Support: Innovations in financial technology and supportive regulations like PSD2 foster a secure environment for embedded payments.

 

The future of business transactions

The expansion of embedded payments is setting new standards for digital transactions worldwide, not just in Europe. These systems offer a more integrated, secure, and user-friendly approach that enhances how we conduct online shopping—making processes quicker and safer, boosting sales, and improving customer satisfaction. As this technology becomes more prevalent, it will continue to transform the landscape of e-commerce, shaping the future of how businesses and consumers interact economically across the globe.

 

 


About NORBr

NORBr offers a platform-as-a-service that simplifies and streamlines payment processes. This comprehensive approach allows businesses to reduce costs and boost efficiency without complex coding. By integrating orchestration capabilities, NORBr’s platform ensures flexibility and scalability. This lets businesses focus on their core objectives rather than on complex payment systems. The platform provides a robust suite of tools that can automate payment flows, improve transaction rates, and reduce operational overhead.

Share This Story, Choose Your Platform!