What are embedded payments and why are they transforming business operations?

If you run a small or medium-sized business, you handle payments all the time—paying suppliers, paying employees, and collecting money from customers.

These tasks can be a headache when you’re bouncing between your bank’s website, accounting software, and payroll systems.

Embedded payments promise to change that. They let you manage and execute payments directly inside the tools you already use to run your business.

The result? Less time on manual payment work, fewer errors, and more real-time insight into your cash flow.

In this article, we reveal what embedded payments mean, jargon free, and why they matter for your business.

Here’s what we cover:

What are embedded payments?

Embedded payments simply means integrating payment capabilities into your everyday business software and processes.

Instead of using a separate banking portal or payment service, you can send or receive payments seamlessly within the software products you use to operate your business.

For example, you might approve a supplier bill in your accounting system and trigger the payment right there, without logging into a bank. Or your payments software might automatically transfer salaries to employees’ bank accounts on payday.

In practice, that means routine finance tasks become faster, simpler, and more connected.

You’re not constrained by banking hours or clunky batch file uploads. Instead, you can move money as part of your normal operations, any time, often instantly.

Crucially, you don’t need to build banking tech yourself—these payment features are built into solutions you already use.

Embedded payments in finance and accounting

For finance teams and accountants, embedded payments are a game changer.

Think about accounts payable and accounts receivable: traditionally, you might generate invoices in your accounting software, then switch to online banking to actually pay vendors or chase customer payments.

With embedded payments, those steps unify.

You can approve and execute payments in payment software directly integrated with your accounting system, and directly reconcile in your accounting software.

This streamlining has big efficiency payoffs.

In fact, research from Modulr finds that 46% of accounting firms, for example, spend over three hours each week on manual payment processes​. Eliminating those manual steps not only saves time, but also reduces the risk of human error.

An example of embedded payments is Sage Salary and Supplier Payments, which lets you make payments to employees and suppliers directly from your Sage 50 or Sage Accounting software.

By embedding payment capabilities into the software you already use, it eliminates the need to manually upload files to your bank.

This means fewer steps, faster processing, and better visibility into what has been paid and what’s outstanding.

Integrated payment workflows also give you better financial visibility and control. Every transaction is recorded in real time in your ledgers. Instead of waiting for bank statements or juggling spreadsheets to reconcile payments, your system updates automatically as money moves​.

This real-time visibility means you always know your cash position. You can make more informed decisions since you’re seeing up-to-the-minute payment status on bills and invoices. It’s a level of transparency that small business owners and CFOs used to only dream of.

Integrating payments into your finance systems is a strategic move that can help your company grow more smoothly.

You and your finance team or accountant gain more control and can strengthen relationships (with clients, suppliers, and stakeholders) by delivering a faster, more reliable payments process.

Embedded payments in HR and payroll

Handling payroll and employee expenses is another area where embedded payments are transforming operations.

For many small businesses, running payroll involves multiple steps across HR and payroll software, bank portals, and even cutting cheques.

It’s no surprise that 29% of HR professionals want to save time managing employee pay and benefits​. Embedded payment solutions tackle this by baking payments right into your HR and payroll systems.

Consider the typical payday routine.

Without embedded payments, your HR or payroll manager calculates wages in one system, then exports data and uploads a file to a bank or payment service to disburse salaries.

With an embedded approach, once you finalise the payroll in your software, the payments can be executed automatically to employees’ bank accounts. No extra file export, no manual bank entry.

This kind of automation can dramatically cut down payroll processing time and effort.

Businesses using embedded payroll payments have managed to reduce payroll processing time and save as much as 90% through automation. That means what used to take all day might only take an hour or less.

For a time-pressed small business or a lean HR team, hours saved every pay period are huge.

Speed is another major benefit.

Embedded payments often use Faster Payments, so employees get their pay promptly. No more waiting days for direct deposits to clear. If you need to run an off-cycle payroll or correct an error, an integrated system can send funds instantly or on the same day.

In fact, some companies now offer on-demand pay (Earned Wage Access) to employees, where workers can access part of their salary instantly when needed—a process made feasible by embedded payment tech that moves money in minutes, not days.

Ensuring everyone is paid on time (or even early) with minimal fuss boosts trust and morale. It also reduces the chance of errors that come from re-keying data between systems.

By automating pay runs and linking them with your HR data, your team can focus more on people, and less on making payments.

Instead of wrestling with payment files, they can spend more time on hiring, training, and supporting employees. And when payroll issues do arise, the team has real-time information to resolve them quickly.

The end result is a smoother payroll process that keeps your staff happy and your business compliant.

As a bonus, the finance folks benefit too—since payroll transactions are logged and reconciled automatically, your books are more likely to stay accurate with far less effort.

Embedded payments in day-to-day operations

Beyond finance and HR, embedded payments are making waves across day-to-day business operations.

Operations covers all the ongoing activities that keep your business running—purchasing inventory, fulfilling orders, managing subscriptions, servicing customers, and more.

In many of these areas, integrating payments can remove friction and speed up the workflow.

In essence, embedded payments align with your existing processes instead of interrupting them.

Melek Piron, chief product officer at digital payments platform Modulr, explains the ideas behind this:

“We’ve built our payment tools by focusing on the processes businesses rely on every day. It’s about creating solutions that simplify workflows and support businesses where it matters most—ensuring every new feature adds value.”​

What this means for you is that the technology is designed to fit naturally into your daily operations. When your payment system is unified with your other business systems, you spend less time juggling multiple platforms.

Complex financial operations become simpler because you’re managing everything in one place​.

 You don’t have to be a tech giant to benefit, either.

Small businesses can use these tools to eliminate redundant steps. A national courier, for example, uses embedded payments to manage the 400+ payments they make every month.

Another key operational benefit is scalability.

As your business grows—handling more transactions, serving more customers, maybe expanding to new markets—embedded payments can scale with you without a hitch. You won’t need to completely overhaul how you handle money each time you grow.

As payments are part of your core systems, adding volume is often just a matter of software settings rather than hiring more people to manage additional bank admin.

In short, embedded payments help future-proof your operations. They give you the flexibility to handle increased workload and complexity without breaking your processes​.

Finally, by uniting operations and payments, you gain better oversight.

Managers can get a real-time overview of all outgoing and incoming payments related to operations. This level of transparency can highlight inefficiencies (maybe a recurring payment that could be renegotiated) and improve decision-making.

It’s much easier to optimise your operations when you have both the operational data and the payment data side by side.

Next steps for adopting embedded payments

Embedded payments are clearly transforming how businesses handle money. The good news is that you don’t need to be a large enterprise to take advantage of this trend.

Here are some practical next steps and considerations for bringing embedded payments into your SME operations:

• Identify pain points: start by mapping out where your team spends the most time or encounters delays in payment workflows. It could be processing payroll, paying suppliers, or reconciling incoming payments. These high-friction areas are prime targets for embedded payment solutions.
• Check your existing software: you may already use accounting or HR software that offers built-in payment integration or add-ons (such as Sage 50, Sage 200, and Sage Intacct). Explore those features first. Using an existing trusted platform can make adoption easier and ensure data flows smoothly.
• Evaluate payment providers: if your current tools don’t support embedded payments, look for a reputable provider or fintech partner that can integrate with your systems. Key things to consider include security (encryption, fraud protection), compliance (for example, payroll tax obligations handled correctly), and support for the payment methods you need (bank transfers, card payments, direct debits). Choose a solution that fits your business size and can scale as you grow.
• Pilot and train your team: implement the new payment workflow on a small scale to start. Maybe automate one part of accounts payable or a single department’s expenses. Monitor the results – time saved, error reduction, employee feedback. Provide training and clear instructions to your team so everyone trusts the new process. As you and your staff become comfortable, expand the embedded payment system to more areas of the business.

By following these steps, you can gradually transform your operations with embedded payments in a controlled, low-risk way.

The overarching goal is to make payments invisible: they should happen in the background of your day-to-day work, with minimal effort and maximum reliability.

When done right, embedded payments free up your energy to focus on serving customers and growing your business, rather than pushing paperwork.

Final thoughts

Embedded payments represent a shift in how businesses can operate.

For SMEs, this shift means automating mundane tasks, gaining real-time visibility into finances, and confidently scaling your operations with payments under control.

By embracing embedded payments, you equip your business to be more efficient, agile, and resilient.

Moving money should be as straightforward as any other click in your workflow, so you can get back to what you do best: running and growing your business.