Payments built into business software means taking payments inside the software a business already uses, with no separate checkout. The restaurant's billing system, a gym's membership software and a company's ERP can all take payments themselves. This is also called embedded payments.
Take, for example, a gym in Gurugram. It already runs its memberships, class bookings and attendance on gym management software. When a member's ₹1,500 monthly fee is due, the same software sends the member a payment link. The member pays by UPI or card, and the software marks the membership as paid. The gym does not need a separate payment company. The payment is part of the software it already uses.
The same thing happens in other businesses. A company's ERP sends an invoice to a customer with a Pay button inside it. ERP, or enterprise resource planning, is the software a company runs its accounts, orders and stock on. A restaurant's billing system, called a restaurant POS, shows a UPI QR code on the bill. EV charging software takes the payment for charging a car. A campus card system takes payments for meals and printing at a university.
Behind the software, the payment still goes to an acquiring bank, the shop's bank that receives card and UPI payments. The software company makes an agreement with an acquirer, or becomes a registered payment company itself. Each business that uses the software is then signed up for payments automatically.
Why do software companies do this? Every payment carries a small fee. The software company keeps part of that fee. For many software companies, these fees now earn more than the monthly software price. Selling a financial service inside a non-financial product is called embedded finance.
The payments data also lets the software company offer loans. It can see each business's daily sales. So it can offer a loan that is repaid as a share of future sales. This is called revenue-based financing.
For the business, the advantage is simple. Its sales, bills and payments are all in one place. So there is less work to match each payment with the right bill, a task called reconciliation.