Software platforms run the world. Healthcare, logistics, travel, insurance — every industry now relies on software to streamline operations and deliver value.
However, as macroeconomic pressures mount, embedding payments into those platforms has moved from a differentiator to a requirement.
That’s not the same as doing it well.
“Many software platforms have embedded payments to some degree into their experiences,” PYMNTS CEO Karen Webster said during a Summer School discussion with Jay Dearborn, president of Corporate Payments at WEX. “But how do they know whether they’ve done it well enough to move the needle for their business?”
Although embedded payments are everywhere, real results are not. Most software companies confuse technical integration with business transformation. They mistake the presence of a payment button for progress. But as Dearborn pointed out, that’s just Stage 1. And it’s barely the beginning.
From Enablement to Monetization — and Why Most Stall in the Middle
Dearborn described embedded payments maturity as a three-stage journey: enablement, customer value creation and monetization. It’s a simple framework with a not-so-simple implication. Most companies haven’t made it past Stage 2. Many aren’t even close.
Stage 1 is about enabling payments. That means getting them up and running, even if they sit off to the side. This is where low-code tools and turnkey integrations show up. Payments get processed, but the platform isn’t really part of the transaction.
“It might be windowed, where the payment runs in parallel to the service being provided,” Dearborn said. “There’s very little integration, very little transparency, but at least there’s a way to pay.”
Stage 2 is where payments get embedded more deeply, when they disappear into the user experience. It’s no longer about simply enabling a transaction but using the payment to remove friction and strengthen brand control. The goal is a seamless experience that feels like part of the product, not an add-on.
As Dearborn put it, “Is the payment branded yours, seamless? Is it transparent?”
The right benchmark is Amazon, he said, not because every software platform needs to replicate it, but because Amazon represents the standard for what payments should feel like: instant, invisible and fully owned.
Then, Dearborn told Webster, the hard question needs to be asked: How far away from that are you?
Friction Isn’t a Feature
Reducing friction may sound obvious, but it’s where many embedded payment efforts quietly stall. That’s especially true in B2B environments, where complexity gets in the way of clean execution.
Webster asked if Stage 2 is even realistic for platforms managing complex transactions between businesses.
It’s more difficult but not impossible, Dearborn said.
“In B2B, rather than one-off transactions, we often have to complete many, many transactions,” he said. “We’d like to do them digitally, and we’d like to do them intelligently. That means tying invoice numbers, traveler reservations or insurance claims to the payment itself.”
When that happens, payments become more than a way to settle, Dearborn said. They become a source of insight. That data can be analyzed, returned to the platform, and used to improve performance, either for the software company or its customers. Embedded payments, done right, create a flywheel.
Friction still kills, however. The two metrics that matter most are the number of clicks to complete a payment and the cart abandonment rate, Dearborn said.
“Anything beyond one click is too many,” he said.
If users are abandoning the experience before the transaction completes, the experience isn’t embedded; it’s bolted on.
The problem is that too many software companies think reaching Stage 2 means the journey is over. But it’s the halfway point, and stopping there leaves value on the table, Dearborn said.
Stage 3: Where the Real Money Is
Stage 3 is about turning embedded payments into a profit center. That’s where Dearborn said he sees the biggest gap and the biggest opportunity.
“It almost takes someone to bring payments expertise onto the leadership team,” he said.
Software companies are good at building great products, but payments is a domain business. Without deep expertise — or the right partner — the monetization piece rarely materializes, he said.
That monetization comes in several forms. Dearborn said to start with participating in card economics, which means taking a slice of the acquiring fee, issuing virtual cards or receiving rebates through ACH+ networks.
“This whole concept of rebate is one source of monetization,” Dearborn said.
It’s not flashy, but it adds up — especially at scale.
Next is participating in the funds flow itself. Companies that sit inside the accounts payable process, route payments and control disbursements aren’t just facilitators. They’re operators, and operators get paid.
“Think of AP automation players as technology companies participating in the funds flow,” he said. “That income is meaningful.”
Then comes network monetization. Software platforms don’t just process payments; they connect buyers and sellers. That connection creates a closed-loop network that can be optimized, priced and monetized — without ever touching the payment itself, he said.
“You’re not necessarily monetizing the payment but the network that exists within these platforms,” Webster said.
That’s not the only monetizable layer. Speed matters too. Instant access to funds — on either side of a transaction — creates tangible value. Buyers are more likely to pay early. Sellers get paid faster. That value can be priced, packaged and monetized.
“You can build an ecosystem around that account, that payment credential,” Dearborn said. “That’s the next unlock.”
A Framework for the Next Move
The gap between Stage 2 and Stage 3 isn’t just technical; it’s strategic. It requires payments talent, clear KPIs and a business model that sees payments as something more than a cost center or convenience layer.
Dearborn offered three questions to help CEOs assess their readiness.
- Are payments seamless, secure and operating under your brand?
- Are you capturing transaction-level data and using it to improve experience?
- Are you monetizing payments — creatively and deliberately?
If the answer to any of those is no, the embedded payments journey isn’t finished, Dearborn said. It may not even be fully underway.
Embedded payments are table stakes, he said. Embedding them well and building a business around them is still a competitive edge. Software platforms that get this right won’t just move the money. They’ll keep more of it.
And that’s the point.
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