The power of embedded payments: Reinventing customer experiences

Modulr By Modulr on 6 August 2021   •   4 mins read

An entirely digital economy has always been on the horizon. But now, thanks to Covid, that horizon has been brought to the forefront of business operations.

Before the pandemic, cashless payments were quickly becoming the norm. Cash payments have been in steady decline since the year 2000, falling by around 10% every 5 years leading up to the pandemic. And now, projections show that cash could be completely eliminated, leading to a cashless economy by 2026.

However, traditional banking alternatives to physical cash are still wrought with fees and inefficient practices. However, businesses are finding that these banking alternatives aren’t equipped to deal with the modern instant economy and digitally demanding customers.

Customers want a financial system that will allow them to spend and transfer money quickly and easily, leading more businesses to place more value on the online payment experience.

At the heart of this financial revolution are financial APIs (Application Programming Interface) that facilitate Open Banking, like Modulr.

Modulr is helping countless non-bank and fintech companies reinvent their payment infrastructure by enabling:

  • Faster Payments
  • Faster Settlements and reconciliation
  • Enhanced end-to-end experience

API software allows businesses to set up their own payment infrastructures, outside of the traditional banking environment. In doing so, APIs are reinventing customer experience.


“I think APIs are one of the greatest inventions of the past decade. They allow for easy insertion of new features. A well thought-through API is incredibly simple to integrate, requiring minimal lines of code.” - Excerpt from Leaders vs. Laggards: Fast tracking fintech innovation for FinTechs and non-banks.

Nathalie Oestmann, Chief Operating Officer at Curve.

What is an API and what’s the value?

An API is a type of software that allows two different applications to communicate with each other.

For example, consider an everyday app like JustEat or Deliveroo. When you confirm your order and make a payment, an API handles the money transfer between your bank account and the restaurant’s payment processing system.

From the customer’s end, the process looks like a fairly simple affair. But, behind the scenes, that API is putting in the legwork.

A financial API like Modulr offers payment infrastructure for non-banking companies, allowing quick and secure online payments between applications. This works as an alternative to the traditional banking environment, in which businesses would have to set up their own payment interface, and conduct any transactions through the bank.

As the banks themselves aren’t always well equipped to deal with online transactions, this can lead to slow payments, expensive transfer fees, and an all-round inefficient process. After all, they’re banks, not tech companies.

This is where APIs come in. Acting as a third party that can handle the payments between accounts, APIs are focused resources designed to offer a better payment service than a bank could on its own.


The benefits of APIs

Like we mentioned up top, modern customers are ditching cash in favour of online payments. For businesses, this means they need a seamless and secure payment portal if they’re to compete in the current market.

The problem is, with traditional banking methods proving inefficient, non-banks and fintech businesses can struggle to find a payment infrastructure that can meet their customers’ expectations.

Luckily, API software can solve this problem by offering:


Faster Payments

API software takes on the regulatory and operational tasks of plugging into payment schemes, meaning they can facilitate much faster payments between accounts than traditional banking methods.

Businesses will be able to receive and make payments almost instantly, rather than having to wait for the cumbersome practices of old-school bank transfers.


Faster settlement and reconciliation

APIs can facilitate much faster settlement, so accounts and debts are settled quickly. This means users know exactly what is in their accounts at any given time.

This is coupled with faster reconciliation, so accounts accurately reflect all financial activity, allowing smoother financial management for non-banking businesses and FinTechs.


Enhanced end-to-end payment experiences through embedded payments

Embedded payment features eliminate the need for customers to input account details over and over again.

APIs allow businesses to offer a seamless end-to-end payment experience that will compete in the modern instant economy — all while keeping users’ information safe and secure. And, because the user’s accounts are never in direct contact with the bank’s servers, APIs offer an extra level of financial security compared to traditional payment methods.


How Modulr creates Faster Payments

All of these innovations are possible because APIs prioritise next-generation technology, and use it to integrate any non-banking business with traditional bank accounts much faster than either party could do on their own.

They can host fast, reliable payment infrastructures, 24/7, and can easily scale as your business grows.

Find out more: Join the revolution

Any non-bank business or fintech can leverage the power of payments with APIs. At Modulr, we can bring your business into the modern era of fast and reliable paperless payments.

So, don’t leave your business in the past. Check out our eBook: “Leaders vs. Laggards: Fast tracking fintech innovation for FinTechs and non-banks” to find out more.