Dive Brief:

• A majority of small and mid-sized businesses (82%) and about two-thirds of mid-market companies (63%) said they are likely to increase, or significantly increase, their investment in embedded payments during the coming year, according to a survey of 600 companies in the U.S. and abroad by Global Payments Inc. About three-quarters of larger businesses said they have more than five years of experience using embedded payments, Global Payments’ report found.
• The survey report released Monday also indicated that small and mid-sized businesses are leaning more into digital wallets. While 82% of small and mid-sized respondents said they were testing or implementing digital wallet technology, only a quarter of big enterprise businesses said the same, per the report.
• The majority (94%) of small and mid-sized businesses surveyed said they are piloting or using artificial intelligence to enhance their biometric authentication. While two-thirds (67%) of respondents are using AI for their tap-to-pay transactions, 13% said they worried about not understanding the technology, the report said.

Dive Insight:

Global Payments’ report builds upon previous research suggesting that U.S. businesses are fueling digital wallet adoption. Last year, 62% of respondents to a Federal Reserve survey said they used digital wallets, up from 47% in 2022, according to a report from the Federal Reserve’s financial services division. The share of large enterprises experiencing a jump in digital wallet usage rose from 48% in 2022 to 64% last year, the Fed found.

In addition to adopting digital wallets, Global Payments’ report identified the sectors that have adopted unified commerce platforms. While less than half (43%) of retail respondents than companies in other sectors, 73% of those retailers have been using the technology for more than five years, the report said. Meanwhile, 67% of small and mid-sized businesses and 71% of midmarket companies are likely to invest more into unified commerce platforms, more so than their enterprise-level counterparts. Restaurants, hospitality and leisure businesses are more likely to pour more resources into such platforms, the report noted. 

Global Payments also predicts that companies will increasingly view their point-of-sale systems as another pathway to engage with customers. The report notes that POS systems could, for example, be used to enroll customers in loyalty programs and use customer data for email marketing campaigns.

Another payment function that companies are paying close attention to is payment orchestration, which allows businesses to route and process payments across multiple payment providers, as noted in the Global Payments report. Roughly three-quarters (76%) of respondents said they’ve used payment orchestration for five years or longer. 

However, while nearly two-thirds of payments said they aren’t investing more into payment orchestration platforms, over a third (35%) of respondents said they plan to invest more resources into the technology, the report noted. Among the top benefits of using payment orchestration were improved fraud prevention capabilities (89%), operational efficiency (84%), better customer experience (83%) and more customer loyalty and engagement (82%), the report said.

The Global Payments report offers some insight into which sectors have adopted embedded payments more than others. Nearly three-fourths (74%) of retail survey respondents said that they are long-term users of embedded payments. Meanwhile, other sectors, such as the automotive, hospitality and restaurant industries, have also begun exploring embedded payment options, the report said.

Companies are pouring more resources into embedded payments as the market for embedded finance is expected to grow in the coming years. By 2028, the global embedded finance market is projected to reach $228 billion, up from $92 billion this year, according to a Juniper Research report. 

“The businesses that drive our economy are experiencing a shift in how they use technology to connect with and better serve their customers. Payment technologies increasingly sit at the center of business operations, and mastering them is critical to success for companies of all sizes,” Cameron Bready, chief executive officer of Global Payments, said in a statement. “Our 2025 report evaluates everything from the transformative potential of AI and biometrics to the technological requirements of social commerce.”