While these payment terms are often used interchangeably, there is one technical, but important distinction between them—merchant management. The thing is, this one difference could be stagnating your earning potential, as well as your ability to create better experiences for your customers and their customers. As the saying goes, the devil is in the details 😈
With integrated payment systems, you’re basically connecting two products together so that they can speak to one another machine style (via API). This connection allows your business to accept and monetize payments but doesn’t let it control the merchant onboarding experience—which is where the distinction comes in. Instead, this aspect of your payments is controlled by a third-party payment processor—just like with the ISO/ISV model 👨💻
By contrast, embedded payments involve making payments an integral part of your business. Along with a payment gateway integration, you’re also building a merchant onboarding flow and management system into your product. This means you own more of the payments experience 📱
Here’s an analogy:
Think of the embedded payments option as a room addition to your home. While it wasn’t part of the original design, it’s made to function and feel as if it were. Integrated payments, on the other hand, are more akin to say a screened-in porch. It adds additional functionality to your home, but is only attached to it and not truly a part of it. Both add value, but because a room addition is built as a seamless addition, it has more capabilities and brings more return on investment.
