Retail is evolving faster than ever — and the checkout is where it all comes together. For merchants competing in a saturated landscape, the ability to offer a seamless, secure and rewarding payment experience is becoming the true brand differentiator. That’s where digital wallets and embedded finance step in.
These innovations are no longer futuristic add-ons. They’re the building blocks of modern customer experience — and merchants that understand how to deploy them intelligently are gaining customers, sales and stronger revenues.
At the recent Lloyds Merchant Services and Visa ‘Payments Disrupted’ event, it was clear that these tools are rapidly moving from ‘emerging tech’ to baseline expectation. Wallets like Apple Pay and Google Pay have proven their convenience and have become behavioural defaults. Customers use them not because they’re novel, but because they’re faster, safer and increasingly linked to loyalty, rewards and personalised promotions.
Why Embedded Payments are Now a Cornerstone of Customer Loyalty
Data from UK Finance shows the use of digital wallets in the UK has led to 32% of adults now using mobile payments, and research by personal finance comparison website finder.com finds 45% of UK adults are comfortable leaving the house without a wallet or payment card because they know they can use a digital wallet, such as Apple Pay or Google Pay, to pay.
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For retail CX leaders, that opens up enormous opportunity. Imagine knowing your most loyal customers are also your most mobile — and building promotions around that. Or linking embedded finance options like BNPL or instalment payments directly into the loyalty journey — not just at checkout, but upstream in marketing or app engagement. This isn’t speculative. It’s already happening.
During our event sessions with leading merchants, we heard how some brands are embedding split-payment or deferred-payment options into the customer journey — not to push credit but to enhance flexibility and reduce cart abandonment. When customers can control how and when they pay, they feel more empowered — and that empowerment translates to brand loyalty.
This is especially relevant for younger and digital-native consumers, who are more likely to use mobile wallets and embedded finance options than Baby Boomers. But they’re also three times more likely to switch brands based on poor checkout experiences. In a world of one-tap everything, even a few seconds of friction can cost a sale — or worse, a loyal customer.
From Checkout to Check-In: Making Wallets Work Across the Journey
That’s why many forward-thinking retailers are now linking wallets to loyalty — allowing customers to automatically earn or redeem points, access promotions or trigger VIP offers just by paying with a preferred method. This is a huge leap from the clunky app-based couponing of the past. With the right integration, the payment becomes the loyalty moment. The checkout becomes the emotional touch point.
But none of this works without the right infrastructure. Retailers need payment platforms that can flex across channels — from POS terminals to mobile to ecommerce. They need partners that understand not just authorization and settlement but UX and data flows. And they need solutions that are built with regulation in mind — from PCI compliance to fraud risk and SCA (Strong Customer Authentication).
At Lloyds Merchant Services, our work with leading retail partners focuses on exactly that: helping merchants simplify the complexity behind the scenes so they can unlock moments of magic with customers out front. From integrating with top wallet providers to deploying embedded lending solutions like FlexPay, we’re seeing firsthand how retail CX is transforming at checkout — and how brands that get this right are outperforming their peers on conversion, retention and engagement.
We also see that CX leaders treat payments as more than a back-office function. They treat it as a marketing lever. They ask questions like: Are we making it easier for our best customers to pay? Are we connecting rewards to real-time behavior? Are we building trust through transparency, speed and control?
The best digital wallet strategies answer those questions in full, and embedded finance takes that to the next level — offering customers smart, contextual options that feel helpful, not pushy. Used responsibly, these tools are powerful experience enablers.
Merchants Want More than Payments — They Want Experiences that Convert
As the market gets more crowded and customer expectations get sharper, the winners will be the retailers that turn payments into something customers look forward to — not something they endure.
Our advice? Start where your customers are. Map their journey, identify the points of friction and explore how wallet acceptance or embedded lending might ease those pressure points. Think beyond the transaction. Look at the whole journey. Because in modern retail, the brands that lead on payments don’t just capture spend — they capture hearts.
And that’s the future of customer experience: fast, flexible, frictionless — and built on trust, one payment at a time.
As Managing Director for the Sales and Portfolio Management business at Lloyds Cardnet, Ross Taylor is accountable for Cardnet’s associated transformation and commercial performance. With over 20 years in banking and seven years in payments, Taylor brings a broad perspective through working across several business functions and with clients ranging from startups to global corporates. He’s well known for his drive, strategic thinking, impactful communication style and a perspective shaped through several previous roles at Barclays and HSBC. Taylor also served eight years as a charity Board Trustee and five as a junior sports coach, which aligns to his main interest, working with others to help them succeed.
