Payment Aggregators are no longer just payment processing companies. Many of them have started offering financial services beyond payments — such as instant loans, EMI options, and insurance. This trend is called Embedded Finance.
In this final lesson, we’ll understand what embedded finance means in the context of Payment Aggregators and what additional services they offer.
What is Embedded Finance?
Embedded Finance means offering financial products (like credit, loans, or insurance) directly inside non-financial platforms or at the point of checkout.
Instead of customers going to a bank or NBFC separately, they can access these financial services while making a payment on your platform — in a seamless way.
Common Additional Services Offered by Payment Aggregators
Customers can convert their purchase into easy monthly installments at checkout. The Payment Aggregator partners with NBFCs to offer this facility.
Many aggregators now offer quick business loans or working capital advances to merchants based on their transaction history on the platform.
Merchants can get their money credited instantly (instead of T+1) by paying a small fee. This helps improve cash flow.
Some aggregators offer embedded insurance options (like device insurance, travel insurance, or health insurance) at the time of payment.
Advanced tools to create payment links, virtual accounts, or recurring payment setups for easier collections.
How Do These Services Work?
Payment Aggregators usually don’t provide loans or credit themselves. Instead, they partner with NBFCs (Non-Banking Financial Companies) or banks.
Example:
When a customer chooses EMI at checkout, the Payment Aggregator shares the transaction details with its NBFC partner. The NBFC checks the customer’s eligibility and approves the EMI. The aggregator earns a commission for facilitating this.
This model allows Payment Aggregators to offer financial services without taking on the credit risk themselves.
Benefits of These Additional Services
- Higher Conversion Rates: Offering EMI/BNPL often increases the chances of customers completing the purchase.
- Better Cash Flow for Merchants: Instant settlement options help businesses manage working capital better.
- New Revenue Streams: Aggregators earn commissions from these services, which sometimes helps them offer competitive payment rates.
- Convenience: Customers get financial products without leaving the platform.
Why is Embedded Finance Growing in India?
India has seen massive growth in digital payments. Now, companies are moving to the next stage — using payments as a starting point to offer other financial services. This is possible because:
- Payment Aggregators already have transaction data of merchants and customers.
- They have strong technology infrastructure.
- They have built trust with both merchants and customers.
Key Takeaway
Payment Aggregators are evolving from simple payment processors into full-stack financial partners. While choosing one, look beyond just payment features and also evaluate the additional financial services they offer — especially if your business can benefit from EMI options, faster settlements, or working capital support.
Note: Embedded finance is still a growing area. Not all Payment Aggregators offer these services at the same level. Always check the availability and terms before relying on them.
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