Why Embedded Payments Can Cost Businesses More—And How to Avoid the Trap

Embedded payments—where a POS system, eCommerce platform, or SaaS provider forces businesses to use their in-house payment processor—are marketed as convenient and seamless. But what most businesses don’t realize is that these setups often come with higher processing fees, hidden costs, and limited flexibility.

At PlutosPay, we help businesses break free from overpriced embedded payment systems, reduce processing costs, and ensure they’re not locked into bad agreements.

Here’s what you need to know about embedded payments, their hidden risks, and how to protect your bottom line.

1. What Are Embedded Payments?

Embedded payments are when a software provider integrates payment processing directly into their platform, making it a "built-in" feature.

Examples include:
💳 Shopify Payments → Requires merchants to use Shopify’s in-house processing (Stripe) or pay extra to use another processor.
💳 Toast POS → Forces restaurants into Toast’s payment processing with higher fees.
💳 Mindbody → Locks businesses into their payment solution with limited customization.

🔹 Why businesses choose embedded payments:
✔️ Convenience → One provider for software & payments
✔️ Easy onboarding → No extra setup needed
✔️ Single support contact → No need to manage multiple vendors

🔹 What they don’t realize:
🚨 Higher processing fees → Rates are often 0.5%-1%+ higher than standard processors.
🚨 Limited negotiation power → Businesses can’t shop for better pricing.
🚨 Lack of flexibility → Switching providers means changing your entire system.
🚨 Hidden contract terms → Exit fees & long-term agreements make leaving difficult.

💡 Embedded payments may seem simple—but they often cost businesses thousands more per year in unnecessary fees.

2. The Hidden Costs of Embedded Payments

🚨 Higher Processing Fees

• Embedded payment providers set their own rates, which are often inflated compared to market pricing.

• Example: A business using a standard processor may pay 2.3% + $0.10 per transaction, while an embedded solution might charge 2.9% + $0.30.

🚨 Transaction Downgrades & Extra Fees

• Many embedded processors don’t offer Level 2 & Level 3 data support—leading to higher interchange costs for B2B transactions.

• Extra fees for disputes, compliance, and support services drive up costs.

🚨 Inability to Negotiate Rates

• Standard processors often allow volume-based rate reductions as a business grows.

• Embedded payment providers lock businesses into their set pricing model, even as volume increases.

🚨 Difficult & Costly Transitions

• Switching from an embedded payment system means replacing your entire software solution.

• Some providers charge hefty exit fees or require months of notice to leave.

💡 Many businesses don’t realize these costs until they’re locked in.

3. How PlutosPay Helps Businesses Escape Embedded Payment Lock-Ins

At PlutosPay, we help businesses analyze, negotiate, and transition out of costly embedded payment systems—ensuring they have a flexible, cost-efficient setup that fits their needs.

🔹 Statement Audits to Identify Hidden Fees

• We review your processing statements to uncover unnecessary charges & inflated fees.

• Many businesses are shocked at how much extra they’re paying.

🔹 Processor & Gateway Sourcing for Maximum Savings

• We help businesses find processor-agnostic POS & software solutions to avoid lock-ins.

• Processor competition = better rates & lower costs.

🔹 Custom Transition Plans

• If a business wants to leave an embedded payment system, we create a strategy that minimizes disruption.

• We ensure integrations with existing accounting & operational systems stay intact.

🔹 PCI Compliance & Fraud Protection

• Many embedded systems lack full PCI compliance tools. We ensure your business meets security requirements & avoids unnecessary fees.

💡 With PlutosPay, businesses take back control of their payment setup—without paying extra for convenience.

4. Key Takeaways

✅ Embedded payments are often more expensive than traditional processing setups.
✅ Businesses locked into these systems lose negotiation power & pay inflated rates.
✅ Switching can be costly & complicated—but a plan can make it seamless.
✅ PlutosPay helps businesses audit their payment costs, transition to flexible processors, and avoid unnecessary fees.

📩 Are you stuck in an expensive embedded payment setup? Let’s talk.