Edenred Payment Solutions has released IDC research showing UK businesses see embedded payments' value but lack full integration.
The research examines how far current implementations of embedded payments match the strategic ambitions companies hold for them.
More than 75% of respondents told IDC they see strategic value in embedded payments, citing their potential to streamline operations, support competitive differentiation, improve customer retention and open up new avenues for growth. Despite this recognition, the research found a considerable gap between that potential and what businesses experience in practice. Only 10.8% of businesses using embedded payments and payouts described their payment and payout experiences as fully integrated, while more than half reported only basic or limited integration.
Transparency, speed, and fragmented tooling
The research identified three specific operational challenges. 67% of businesses cited data transparency and payment status updates as a shortfall in their payout experience, while 56% pointed to the speed of funds availability as an issue. In addition, fragmented tooling was also widespread: 58.5% of businesses said they use four or more separate systems for payment processing, reconciliation, and reporting. These findings are reinforced elsewhere in the research, with only 40.5% of respondents reporting a mostly or very transparent view of their payment data. Managing payments across several disconnected systems can complicate reconciliation, reduce visibility, and limit the effective use of payment data.
Implications for software and financial services providers
Commenting on the findings, Rehana Mitha, Managing Director at Edenred Payment Solutions, said businesses increasingly recognise the strategic value of embedded payments, but that a gap remains between this potential and current experience, with visibility, speed, and fragmented processes limiting the value businesses can realise. It was also added that software and financial services companies have an opportunity to move beyond simply offering payment capabilities by addressing these operational challenges, allowing them to deliver more value to customers and differentiate through the payment experience provided.
The findings point to an opening for software and financial services companies that offer payment and payout capabilities to better address the operational needs of the businesses they serve. As embedded payments continue to gain strategic importance among UK businesses, the research suggests that optimised visibility, flexibility, and simplicity in payment infrastructure could become an increasingly important differentiator for providers operating in this space.
