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Stuart Tarmy

By Stuart Tarmy, Global Director, Financial Services Industry Solutions at Aerospike

When you order a loaded veggie pizza from your favourite Italian restaurant through Uber Eats, you are more likely to be thinking about whether you need extra garlic bread or maybe a couple of additional portions of bruschetta rather than about embedded payments. It’s doubtful you’re focused on the mechanics of how Uber Eats – and its parent company Uber – processes your payment.

But how payments move through the system is very much top-of-mind for companies like Uber and its operations.

Uber Eats, the online food ordering and delivery platform launched by Uber in 2014, experienced a growth explosion during the pandemic when lockdowns forced more people to stay at home and use food delivery apps rather than visit restaurants. According to Statista, Uber Eats generated $8.3 billion in 2021, a 72% surge from the previous year.

That’s big money – but so is the $182 million that Uber Eats would pay in credit card interchange fees of, let’s say, 2.2% during the year. Interchange fees are the transaction fees that the retailer’s bank account must pay to the card issuing bank whenever a customer uses a credit or debit card to purchase from their store.

In the USA, interchange fees are market-driven and amongst the highest in the world, ranging from 1.4% to 3.5%.  The opposite is true in Europe, where credit cards are regulated and fees are capped at 0.30% per transaction. In the USA, each retailer can pay a very different rate to their credit card processor, which depends on how well they negotiate their rate, their industry (due to some industries like travel having higher fraud than others), the amount of volume they transact, their company-specific fraud and chargeback levels, percentage of transactions done in person (card present) versus over the internet or phone (card not present), and other factors.

It’s no wonder, then, that mega companies like Uber are moving to embedded payments to minimise interchange fees. Instead of paying millions to payment processing services like Stripe or Square, Uber can have digital payment options embedded within its app where it will retain some of the interchange fees..

Familiar companies using embedded payments

The advantages of embedded payments mean that it’s being used more widely than just Uber: 


Such are the advantages that IDC reports that by 2030, 74% of digital consumer payments worldwide will be done via platforms owned by non-financial institutions.

Trends in embedded payments

So, more consumers want a seamless online buying experience, whether it’s buying coffee or a sofa from a company like Wayfair. But that frictionless buying experience isn’t just for the big players like Starbucks. The move toward digital transformation within the financial world has led to a broader range of embedded payments technology, so now independent coffee shops can also offer embedded payments.

In another development, B2B embedded payments are also growing. Companies like Echo Global Logistics are using embedded payments to make transactions for clients a more seamless experience. This transportation management company offers an all-in-one platform that helps supply-chain companies get quotes, book and track shipments, and manage invoices and payments. The B2B portal offers simplified checkouts and fast payments to ensure customer loyalty.

Regulatory concerns about privacy

However, as with many trends, it is not without its challenges. Any movement to store more consumer data is met with regulatory scrutiny, and that’s true with embedded payments.

Already, privacy regulations have led to more protection of consumer information. Third-party cookies are being phased out by companies like Alphabet (Google’s parent company) and Apple. Still, consumers are moving toward retailers having access to their payment information. 

Worldwide use of embedded payments 

Added to the regulatory minefield, in Europe – where markets are more fragmented because of various payment methods in different countries – it can be a challenge to offer the right embedded payments for those customers wanting to use local currencies. For example, there is the local card network Carte Bancaire in France, PayPal in Germany and iDEAL in the Netherlands. Still, companies are trying to get customer and retailer feedback on desired embedded payment options and integrate them into their embedded payments, while others may add digital wallets to the payment options.

OpenPayd, a global payments and banking-as-a-service platform, says its data shows that 96% of European companies surveyed report that they are planning to offer embedded payments to customers in the next five years or are seriously thinking about it.

Advantages of embedded payments

Despite these hurdles, at a time when consumers are increasingly using various connected devices, it’s important to give them a seamless experience. If something goes wrong with the payment option, consumers don’t blame the payment company, they blame the retailer or service from which they’re buying. With embedded payments, retailers and brands exert greater quality control over the entire customer experience.

For example, customers who experience delays or other friction with the payments process may simply abandon their online shopping basket and choose another product provider or service. By the time the third-party payment company resolves the issue, that customer – and the loyalty – is lost.

Using embedded payments creates a closed-loop experience with the customer in which the customer is always in touch with the retailer or service throughout their purchase journey.  The business is alerted sooner to issues that can be resolved immediately with the customer, which can also lead to lower basket abandonment. While Europe came out on top in 2021 in the conversion tables with an abandonment rate of  70.1% (compared to the likes of Asia and the Pacific islands, which have an average rate of 76.3%, and Latin America, which boasts about 75.3%), the value of abandoned shopping carts in the world is $4.6 trillion worldwide (FinancesOnline). The loss of potential revenue, when you look at these figures, is staggering. 

Then there are the cost savings. Retailers or brands that can handle customer payments themselves aren’t paying as much for third-party payment services. Embedded payments also allow companies to incorporate better fraud control as they have more control over the payments process.


Embedded payments also help businesses take advantage of the growing trend in buy now, pay later plans. Juniper Research reports that revenue from buy now, pay later services that “embed lending seamlessly in the eCommerce checkout process,” will make up just over half of the embedded finance market in 2026.


For those considering embedded payments, it is first essential to consider the qualities required in the real-time data platform that will be at the heart of the system. The following are the most important elements for consideration:

  • Fraud protection. The ability to analyse millions of events, billions of data points, and petabytes of historical information in milliseconds is critical to verifying online identities. Best-in-class fraud prevention strategies require the ability to use machine learning at the edge across very large data sets.
  • Predictable performance. Also vital is to adopt a data platform that is designed to scale seamlessly and perform linearly at scale.
  • High throughput. To be able to get the very best out of an embedded payments system, a real-time data platform will need to be capable of performing reads at sub-millisecond latencies at very high throughput (110k to 1M) in the presence of a heavy write load.


Businesses should remember that by reducing friction they can provide a seamless customer experience from beginning to end, fostering more sales and encouraging greater customer loyalty. Embedded payments are an important way to get closer to the customer while at the same time reducing payment costs.


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