Highlights
- Embedded payments reduce friction by keeping checkout inside the product, increasing trial-to-paid conversion.
- Trust and continuity matter: users are more likely to pay within a familiar interface than through an external portal.
- Revenue grows naturally as native payment options enable upsells, add-ons, and higher transaction value.
- Sales cycles shorten because automated, in-product payments eliminate delays, manual invoicing, and stalled procurement.
Picture two demo days. In one, a prospect signs up for a SaaS trial, pokes around your product, then clicks a checkout button and is asked to leave the app, create an account with a payment provider, fill in a long form, then wait for an email to confirm. In the other, the same prospect clicks a checkout button and pays inside the app in two taps — card or bank on file, receipt visible, product unlocked. Everything else equal, which one feels more likely to finish the purchase?
That gut answer is the point. Embedded payments are not a shiny add-on. They reduce friction where deals live: inside your product. For SaaS companies that want fewer stalled trials, higher conversion from evaluation to paid, and faster time to value for customers, embedding payments into the product is a straightforward lever with measurable academic backing.
The mechanics: why embedding matters for conversion
Conversion from trial or quote to paid is a funnel problem. One stage that consistently destroys conversions is the checkout and payment stage. Academic research that surveys online purchase behavior shows that roughly three out of four online purchase attempts are abandoned before payment. Across multiple studies synthesizing the literature on electronic shopping cart abandonment, abandonment rates cluster between 60 and 80 percent, with an average near 71 percent. Those are not anecdotal numbers. They reflect a broad academic review of electronic shopping behavior that identifies checkout and payment frictions as core drivers.
What does that mean for SaaS? If your sign-up or upgrade flow forces customers to leave your product to enter a clumsy payment experience, you are adding a measured, high-probability point of failure. Embedded payments collapse that failure point by keeping the payment interaction inside the same trusted interface the customer just evaluated.
Less friction, better UX, better outcomes
Academic studies on mobile apps and in-app purchases show the measurable impact of integrated payment experiences. Research into in-app purchase behavior reports conversion rates for purchases in mobile apps typically measured in the low single digits, for first-time subscribers often around 1 percent. Importantly, these studies also show that improving the ease of purchase inside the app raises that conversion baseline. In other words, customers buy more when you remove payment friction and make the flow native to the app.
User experience research reinforces the same point. Studies on UX design for apps find that better flow continuity, fewer steps to complete a task, and consistent visual context increase retention and conversion. When payment is part of that seamless flow, the checkout is experienced as part of the product, not an external awkwardness the user must tolerate. UX improvements do not just feel nicer; they show up as measurable lifts in conversion and retention in peer-reviewed work.
Trust matters — and embedded payments inherit your product’s trust
One reason embedded payments convert better is psychological: users trust what they already trusted enough to try. Academic work on trust in digital payment systems identifies perceived security, ease of use, and continuity of experience as major determinants of adoption. When payments are integrated into the same interface and brand the customer has been using, perceived risk goes down. By contrast, redirecting a customer to a third-party checkout or a complicated external payment portal introduces uncertainty that many users respond to by abandoning the purchase.
Trust also speeds decisions. The same academic work shows that perceived trustworthiness and reduced perceived risk increase the intention to complete transactions. For SaaS teams selling to business buyers, that means fewer stalled procurement conversations that are really “I am not confident about paying yet.”
Revenue upside: larger baskets and higher lifetime value
Embedded payments do more than rescue single conversions. Financially, embedding payments opens monetization levers you cannot easily access otherwise. Studies of embedded financial services for small and medium enterprises have shown that integrating financial primitives into business platforms simplifies operations and creates new revenue channels for the platform itself and for its partners. That research shows embedded finance can increase platform monetization by enabling add-on purchases, subscription upgrades, and financed or staged payments that were previously impractical. When payments are native, customers buy more often and are more likely to use higher-value features that require transaction support.
Academic findings about buy-now-pay-later and other checkout-side options also show increases in basket size and conversion when financing is offered at point of sale. While those findings come from retail contexts, the principle carries to SaaS: offering native choices at checkout reduces friction and increases both initial spend and future upsell potential.
Sales velocity and closed-won rate: soft and hard wins
A faster, in-product payment process shortens the sales cycle. Sales teams lose time when close requires back-and-forth about invoices, manual payment instructions, or when legal and procurement need to coordinate separate payment onboarding. Embedded payments can automate validation, simplify invoicing, and provide instant receipts and reconciliation. From an academic perspective, anything that removes delay and uncertainty directly increases the probability a deal moves to closed-won in a shorter window. Systematic literature on shopping cart abandonment and UX shows that the fewer interruptions a user encounters in the final transaction steps, the higher the completion probability. That principle maps cleanly to SaaS buying journeys.
Practical steps SaaS teams can take today
- If your product team and revenue leaders want to convert more paid customers faster, here are practical, research-aligned moves:
- Keep checkout inside the product. Eliminate redirects and external portals that break flow continuity. Academic evidence about abandonment shows these breaks are costly.
- Reduce form fields and steps. Each additional step adds cognitive cost and abandonment risk. UX research backs this as a conversion lever.
- Offer trusted payment options you can surface natively. Let users pay with stored cards, bank payments, or staged financing where relevant. Research on embedded finance shows these options increase basket size and platform monetization.
- Display clear security and receipts inside the app. Trust research indicates perceived security and transparency increase intent to complete payment.
- Instrument the payment flow. Track step-by-step abandonment so you can iterate on the exact microcopy, field, or button that drops people. Literature on cart abandonment recommends data-led interventions to reduce drop.
Final thought
Embedded payments are deceptively simple and deeply strategic. The academic record is clear: checkout friction kills purchases, continuity of experience and trust build adoption, and integrated financial options lift purchase value. For SaaS companies, embedding payments is not a nice-to-have feature. It is a measurable conversion lever that makes sales teams happier, shortens sales cycles, and grows recurring revenue.
Sources (academic)
- Chopra, I. P., Jebarajakirthy, C., Jain, T., & Maseeh, H. I. Electronic shopping cart abandonment: What do we know and where should we be heading? Electronic Markets, April 11, 2024. Link
- Enache, A. Demand for in-app purchases in mobile apps: Conversion rates and patterns. Information Economics and Policy / Industrial Economics, 2023. Link
- Alrawad, M., et al. Examining the influence of trust and perceived risk on mobile payment adoption. Journal of Retailing and Consumer Services, 2023. Link
- Zhao, H., et al. Exploring trust determinants influencing the intention to use fintech services. PLOS / PMC, 2024. Link
- Ong, A. K. S., et al. Utilizing SEM-RFC to predict factors affecting online purchase completion and cart abandonment. Frontiers / MDPI, 2022. Link
- Harvard Kennedy School working paper. Exploring the value of embedded finance for small and medium enterprises. 2024. Link
- Bain brief: Embedded Finance: What It Takes to Prosper in the New Value Chain. 2023. Link
