The line between software, platforms, and payment rails is starting to blur.
With embedded payments, platforms can integrate payments directly into their product, managing the transaction flow themselves; from checkout and payment methods to settlement and payouts.
For marketplaces and SaaS, this turns payments into part of your product, not just a backend service. It affects revenue models, compliance scope, and how your platform handles transactions for users.
Switch on embedded payments, and you can monetize transactions, control the payment flow, and keep the entire experience inside your product.
This guide covers the fundamentals of embedded payments. You’ll learn how they work, why platforms embed payments into their product, and what to evaluate when choosing a payments partner.
What are embedded payments, who are they for, and how do they work?
Embedded payments allow marketplaces, SaaS, and platforms to accept and manage online payments directly inside their product.
Basically, embedded payments are primarily used by platforms that facilitate transactions between users. Buyers can pay, sellers can get paid, and both subscriptions and one-off transactions can be processed without leaving the platform.
Rather than each seller or creator running their own payment setup, transactions flow through the platform’s payments system.
That means users don’t need to integrate a separate gateway, open a standalone merchant account, or manage multiple payment providers. Everything happens within the same interface. Under the hood, though, the platform is connected to payment partners that actually move the money.
Most embedded payment systems follow a platform payments model, where the platform connects to payment infrastructure and allows other businesses (often called sub-merchants) to accept payments through it.
Platforms typically implement this model in one of three ways:
- Payment facilitator (PayFac): The platform registers as a payment facilitator and directly manages merchant onboarding, underwriting, and compliance for the businesses using its payment system.
- PayFac-as-a-Service: A third-party provider supplies the core payment structure, while the platform still offers native payments inside its product.
- Direct acquiring: Some platforms connect directly to acquiring banks and payment processors to run their own payments. Regardless of which model is used, multiple parties are involved each time a payment occurs.
When a customer makes a payment, the transaction is authorized by the issuing bank, routed through the card network and acquirer, and processed by the payment provider. It’s then settled so the platform can distribute funds to the appropriate seller or business.
Embedded payments hide this complexity.
For users, accepting payments just becomes another feature of the platform they already rely on.
Split payments 101
Most platforms and marketplaces have to split payments between multiple parties. That's called split-routing, and it's how sellers get paid while you ensure revenue is automatically accrued.
Example:
A customer pays $100 on a marketplace.
→ $90 can be routed to the seller
→ $10 goes to the platform as a commission
Embedded payments systems automate this process.
The provider handles fund routing, fee collection, and payouts so the platform doesn’t need to manually move money between accounts. Slick.
How embedded payments work through Whop:
When a business embeds Whop checkout into their own site or product, the payment experience lives inside their own domain - customers complete purchases without being redirected to a separate page or third-party checkout flow.
Under the hood, Whop sits between the seller and the payment infrastructure. Payment processing runs through Whop's bank and payment service provider partners, while Whop manages chargebacks, tax compliance, and payouts.
For the seller, this means no gateway integrations, no merchant account, and no compliance obligations to manage directly. The embedded checkout is the visible surface - Whop's partner network is what powers it.
Read more here!
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