Category: Industry Insights

In our last article, we explored why payments matter when it comes to your company valuation.  Now we’re going to dig into the details about how strategic buyers will evaluate your embedded payments.  We’ll cover the baseline and standout metrics they want to see and how you should plan your embedded fintech approach to meet those expectations.

Invest in your payments proof points

“It’s a lot easier to sell a payments story when there’s actual revenue. Buyers want proof points—not just a narrative.”

You need to demonstrate that payments is not just a capability, but a proven monetization stream.  What this means is showcasing real adoption within the install base and increasing penetration over time.

Real adoption means tracking payment volume over time.  Showcase how it is trending.  Dig into the cohorts over time.  

Stop measuring payment penetration as a snapshot. Start measuring it as a cohort.

Most platforms look at payment penetration today and call it a day. But that number tells you almost nothing on its own. The real question is: what did your cohort from three years ago look like when they signed on, and how has that group grown since?

Cohort analysis shifts the conversation from “where are we now” to “are we actually getting better at this.” Are onboarding improvements moving the needle? Is a new pricing model driving faster adoption? Are targeted campaigns pulling more volume through the platform over time?

Track penetration by cohort, and you stop guessing. You start seeing exactly which levers work, and which ones are just noise.

Download the Payments Cohort Analysis Template →

Finally, you need to own your metrics up and down the P&L. It’s not only about total payment volume and penetration rate, it’s knowing your net take rate. You need to demonstrate real ownership over the net revenue line item.

Your Best-in-Class Payments & SaaS Structure

If you’re still debating how to structure your payments into your Vertical SaaS foundation, Brad is certain there’s a winning structure.  You want to showcase both predictable revenue and a growth upside.  That’s why this model wins:

• Strong SaaS foundation 
• Payments revenue layered on top
  

“SaaS sells seats and workflows—but payments monetizes activity. The customer can grow, and you’re doing nothing, and still generating more revenue.”

This approach de-risks revenue, enhances valuation clarity, and it balances stability and expansion.  It shows the most holistic view of your business.   

If you’re an earlier stage company, you’ll require a heavier SaaS base.  As you scale, you’ll likely need to meet a minimum SaaS floor to ensure buyer confidence.  At this stage, you should be working towards a 50/50 revenue split between recurring SaaS and transactional payments.  As you continue to grow, buyers are likely going to put an even higher value on payments revenue.  As Brad explains, “We try to make the argument that payments revenue can actually be more valuable than contracted SaaS—because it grows with customer activity.”

Characteristics of Top-Performing Embedded Payments Companies

Brad has seen a range of companies come through the pipeline over ten years at Software Equity Group and knows what good looks like. 

“The perfect company is one that’s had payments revenue for three or four years, where you can see a steady cohort of growth and consistency, and improved retention over time.”

Here’s what the top-performing companies all bring to the table:

• 3–4+ years of payments history
• Consistent cohort growth
• High payment penetration
• Strong retention metrics
• Payments deeply embedded in workflows
• A Strong Financial Profile:
  • Strong Rule of 40
  • High gross margins
  • Efficient growth (balanced burn)

If you meet these performance standards, you’ll earn strong interest from private equity groups.  You’ll also be likely to have more competitive deal dynamics and reach your premium valuation potential. 

“If you give me a pure SaaS company versus a SaaS plus payments company with those characteristics—I’m all over it. I know I can get the PE market really excited.”

Why Vertical SaaS Founders Should Act Now

Embedded fintech is becoming a standard, even an expectation, for vertical SaaS companies. 

Keep in mind that mission-critical products will always command higher multiples.  There is power in niche markets as well – as long as your product is a “must-have” not a “nice-to-have.” There’s a great opportunity in being number one in a small TAM.  With niche dominance and payments, you’ll have strong defensibility.

 Brad sees a number of high-value verticals on the horizon, including:

• Real estate
• Healthcare
• Government
• Manufacturing
• EdTech
  

As the market continues to emphasize efficiency and monetization, keep these elements in mind as you build your embedded payments offerings and plan your exit strategy:

• Traction beats vision when it comes to valuation
• Deep integration beats surface-level add-ons
• The best financial model combines SaaS stability and payments upside

By following this guidance, you’ll build a stronger business and create a more compelling exit story.

Payabli can be your partner to accelerate faster time to market, improve monetization and ensure a scalable embedded payments infrastructure.  Schedule a demo with our payments experts today.

By Sierra Kotwicki | Product Marketer at Payabli

What a product marketer sees when a platform treats payments like a checkbox.

I market products for a living. When I joined Payabli as its first dedicated product marketer, my whole job became understanding who payments is for, what job it does for them, and how to say it so the right people actually care.

Which means I notice when something that should get that treatment doesn’t. In vertical SaaS, that something is almost always payments.

Most platforms don’t market payments. They just switch it on. It shows up as a toggle in account settings, a line on the pricing page, a “yes, we do that” in an RFP – and then everyone moves on. The work that any other product would get – figuring out who it’s for, what it does for them, how to launch it, how to prove it – never happens.

Here’s the distinction I keep coming back to. A feature is something you switch on. A product is something you do the work to understand, position, launch, and prove. And the product go-to-market work is the part I see most vertical SaaS platforms skip, because payments technically function the moment it’s enabled. It processes. A transaction goes through. It looks done. So nobody does the marketing – and then everyone wonders why merchants aren’t adopting.

Let me walk through the work that gets skipped. It’s all product marketing, and none of it is glamorous.

“Merchants” is not an audience

Once payments go live, most vertical SaaS platforms promote payments as a feature with a general announcement: “Payments are now available!” – sent to their entire merchant portfolio, identical copy, one and done.

But your merchants aren’t one audience. A solo practitioner who runs their whole business from their phone has nothing in common with a multi-location operator with a back-office team, except that they both pay you. They have different fears about payments, different reasons to adopt, different things that make them hesitate. A product marketer’s first move is to segment – to figure out which merchants have the most to gain and what specifically would move them – and then convey the different value propositions to each.

One generic blast isn’t a launch. It’s a notification. And notifications don’t change behavior.

Nobody wakes up wanting payments

This is the one I’d tattoo on every platform team if I could.

Merchants do not want payments. They want to get paid without chasing an invoice for three weeks. They want to stop reconciling two systems by hand every week. They want to stop losing a sale because the only option was “mail us a check.” Those are the things they want. Payments is just the mechanism.

Feature-thinking markets the mechanism: “We support ACH, cards, and digital wallets.” So what? Good product marketing markets the job that gets done: “Get paid the day you finish the work, not the month after.” Same capability – but one is a spec sheet and the other is a reason to care. The discipline here is brutally simple and almost nobody does it: take every payments feature you’ve got and run it through the “so what?” test until you reach something a merchant would actually feel.

Switching it on isn’t a launch

In a feature mindset, the moment the code ships, the job is done. In a product mindset, that moment is the starting line.

Adoption is its own motion, and a lot of it is product marketing: the in-product nudge at the moment a merchant would feel the pain, the activation sequence that walks them from “enabled” to “first transaction,” the milestone messaging when they hit their tenth payout. A product gets an adoption plan. A feature gets a changelog entry and a shrug.

And here’s the part feature-thinkers never get to: once you’re marketing adoption, you can actually measure which message works. Which value prop drives activation? Which segment converts? That’s message-market fit, and you only get to learn it if you treat the launch as something to market in the first place.

Your own team is your first market

Before a single merchant hears about payments, your own people have to be able to talk about it. Your CSMs, your support team, your account managers – if they can’t explain in one sentence why a merchant should turn payments on, no merchant ever will.

Payments adoption dies internally first. This is why internal enablement is product marketing, not an afterthought to it. Someone has to arm the people closest to the merchant. Otherwise the best positioning in the world never leaves the building.

Claims don’t travel without proof

The last thing a feature never gets, and a product always needs: proof. A platform will say “merchants love our payments” with nothing behind it. A product marketer’s instinct is to ask how do we know, and can we show it. Proof is what makes a claim portable. Without it, your messaging is just an assertion competing with everyone else’s assertions.

For what it’s worth, the proof we lean on at Payabli is scale: hundreds of billions of dollars moving across more than 100 vertical platforms. But the number only matters because we can point to what it did for the platforms behind it. A statistic with no story is just a feature in disguise.

The takeaway

Treating payments as a product isn’t about charging more for it. It’s about doing the work – knowing who it’s for, naming the job it does, marketing the launch instead of just shipping it, beating the status quo, arming your own team, and bringing proof.

That work is product marketing. It’s unglamorous, it’s mostly invisible when it’s done well, and it is the entire difference between payments that sit in a settings menu and payments your merchants actually adopt.

If you’re reading this thinking “we switched payments on a year ago and never really marketed it” – that’s not a problem, that’s the opportunity. Let’s have a conversation.

Guest Post by Ershad Jamil | Former CGO, ServiceTitan

Key takeaways

• As AI makes software features easy to copy, embedded finance is the most durable layer vertical SaaS can own, because it ties your revenue to your customers’ transactions, not to whether they renew.
• 88% of organizations now use AI, so a feature-only moat no longer holds.
• Embedded payments grow your revenue as your customers grow and make your platform far harder to leave.
• The strongest platforms own three layers: a system of record, embedded finance (payment acceptance, accounts payable, and payment operations), and AI-driven workflows.

For the better part of the last decade, vertical software companies operated on a relatively simple and highly effective model: build a great product, charge a monthly subscription, and scale recurring revenue. It was clean, predictable, and, for many, incredibly successful.

But that model is starting to show cracks, and AI is accelerating the shift.

Why is subscription-only SaaS losing its edge in the age of AI?

We’re entering a world where software features are easier to build, faster to replicate, and increasingly commoditized. What once required years of engineering investment can now be developed in a fraction of the time. As that happens, the durability of pure subscription revenue comes into question. If your differentiation is primarily feature-based, it’s becoming harder to defend over time.

The pressure is not theoretical. AI use inside organizations climbed from 78% to 88% in a single year, and as those capabilities spread, the features that once set a platform apart get matched far sooner. 

That doesn’t mean SaaS is going away. It means it’s no longer enough on its own.

How did embedded finance go from optional to essential?

Long before the current wave of AI, there was an emerging idea that many software companies initially resisted: embedding financial technology directly into their platforms.

A decade ago, this felt like a departure from the core SaaS playbook. Payments, in particular, introduced a very different monetization model. Instead of charging a fixed monthly fee, revenue became tied to customer outcomes. You made money when your customers processed transactions, when they got paid.

For founders used to predictable subscription revenue, that felt uncertain. It introduced complexity around compliance, underwriting, and operations. It wasn’t obvious that the tradeoff was worth it.

But over time, something important became clear. Software that helps businesses operate is valuable. Software that helps businesses make money and manage money is indispensable.

What turns a software feature into financial infrastructure?

Today, embedded FinTech is no longer a “nice to have.” It has become one of the most powerful levers for growth and retention in vertical software. When you enable a customer to accept payments, pay vendors, manage cash flow, and reconcile transactions directly within your platform, you move from being a tool to becoming part of their financial infrastructure. That shift changes everything.

Revenue becomes more aligned with your customer’s success. As they grow, you grow. As they process more transactions, your monetization expands naturally. Just as importantly, your product becomes significantly harder to replace. Financial workflows are deeply embedded, and once they’re integrated into daily operations, switching costs increase dramatically. This is why so many of the most successful vertical SaaS companies today are also, in many ways, financial platforms.

Does AI replace embedded finance, or amplify it?

There’s a tendency to think of AI as a replacement for traditional software value. In reality, it’s more of an accelerant. AI is transforming how work gets done inside software. It can automate scheduling, follow up with leads, generate invoices, and even assist in closing sales. But all of those workflows ultimately lead to a single outcome: a transaction. And transactions require infrastructure.

As AI increases the speed and volume of business activity, the importance of seamlessly handling payments, payouts, and financial operations only grows. You don’t just need to enable transactions. You need to manage them intelligently, reconcile them in real time, and provide visibility into what’s happening across the business.

In that sense, AI drives the workflow, but financial technology completes it. We go deeper on this in how AI is transforming embedded payments.

What does the modern multi-product SaaS platform look like?

What’s emerging is a new standard for vertical software companies. The most resilient platforms are no longer built around a single product or revenue stream. They combine multiple layers of value:

This combination creates a powerful dynamic. AI increases efficiency and drives more activity within the platform. Financial infrastructure monetizes that activity. And the core software anchors everything in a single, cohesive experience. The result is a more diversified business model, stronger customer alignment, and a much more defensible position in the market.

Why is payment infrastructure the unlock?

Despite the clear benefits, building financial technology in-house is not trivial. It requires navigating regulatory requirements, managing risk, supporting multiple payment methods, and building the operational backbone to handle it all. That’s where infrastructure providers have become critical to the ecosystem.

Companies like Payabli are designed to abstract away that complexity. By offering capabilities like Pay In, Pay Out, and Pay Ops in a unified platform, they allow software companies to embed financial functionality without having to become full-fledged payments companies themselves.

This isn’t just about faster time to market, though that matters. It’s about enabling software companies to deliver a seamless, end-to-end experience for their customers, from the moment work is created to the moment money moves and is reconciled. And the opportunity sits squarely with this layer: Bain estimates revenue for software platforms and the infrastructure powering embedded finance has roughly doubled, from about $22 billion in 2021 toward $51 billion.

What does it mean to become an economic platform?

The broader shift happening right now is not just technological, it’s structural. Vertical SaaS companies are evolving from software vendors into economic platforms. They’re not just enabling workflows; they’re participating directly in the financial lifecycle of their customers’ businesses. That shift fundamentally changes how value is created and captured.

In a world where AI continues to compress the advantage of pure software features, the companies that win will be the ones that go deeper, those that own not just the workflow, but the outcomes tied to it.

AI will reshape software in profound ways. It will make products smarter, faster, and more capable than ever before. But it won’t change the fundamental reality of how businesses operate. Companies still need to get paid. They still need to move money. They still need clarity and control over their financial operations. The opportunity, and increasingly the requirement, is to bring all of that into a single, cohesive platform.

Because in the next era of software, it won’t be enough to simply power the workflow. You have to power the business behind it.

How does Payabli complete the stack?

Payabli provides that layer for vertical software companies. A single API unifies payment acceptance, accounts payable, and payment operations, so a platform can embed and monetize payments without the cost or complexity of becoming a full payments company. Platforms that have made the move see it in their numbers, from Builder Prime’s 1,000% increase in payment volume to Sunbound moving payor adoption from 50% to 90% in under a month. 

If embedded finance is the layer you’re ready to own, book a demo to see what it looks like for your vertical.

And stay tuned for my next article in the series: why the cost-reduction story is only half of it, and how AI is becoming one of the most powerful revenue levers a platform can pull.

By Clayton Smith | Head of Operations at Payabli

I’ll be upfront. I didn’t come up through the payments industry. My background is operations and strategic leadership – the discipline of taking something that works inconsistently and making it work every time, at scale. 

When I joined Payabli nearly four years ago, the company was a small group of scrappy entrepreneurs and a few early adopter partners that believed in the future of embedded payments. Today we’re moving hundreds of billions of dollars across over 100 vertical software platforms serving industries from property management to field services to legal.

I’ve had a front-row seat to what separates embedded payments programs that scale from ones that stall. It almost always comes down to four things:

• How you implement
• How you onboard
• How you scale
• What you do after go-live

Here’s what I’ve learned about each.

Integration: Implementing for the Long Haul

The first place a payments partnership is won or lost isn’t at the signing table. It’s in the integration.

Every week a partner spends in an integration cycle is a week their merchants are still on a legacy processor, not processing on your platform, and not generating revenue for anyone. Delayed launches don’t just push timelines. They erode confidence. Merchants who expected to go live in October and are still waiting in December start questioning whether they made the right call. Some of them churn before they ever process a single transaction.

The root cause is almost never a bad API. It’s an incomplete product:

• Documentation that doesn’t match live behavior
• Sandbox environments that don’t reflect production edge cases
• A support model that treats integration questions like tickets in a queue instead of blockers with real business impact

At Payabli, our solutions engineering function exists to close that gap before it opens. We scope integrations before a line of code is written, and we ask harder questions upfront:

• What does your merchant population look like at scale?
• What billing models do you need to support?
• What does your support team need to handle merchant issues without escalating to us?

Those answers define the integration. Skip them, and you ship something that works in a sandbox and breaks in production. Speed without completeness isn’t a win – it’s a delayed problem. At Payabli, we don’t trade one for the other.

Merchant Onboarding: From Application to Activation

Once the integration is live, the clock starts again – this time on every merchant waiting to go live.

Merchant onboarding is not just a compliance function. It’s a revenue acceleration function. Every merchant sitting in a pending queue is lost volume. Every onboarding flow that requires manual and time-consuming steps to complete is a merchant who might not finish. Configuration matters here just as much as speed: the right MCC codes, the right processing limits, the right fee structure tied to the partner’s program – these aren’t back-office details, they’re the foundation of a strong merchant relationship.

Underwriting plays a central role that often gets undersold. The goal isn’t just to approve merchants – it’s to approve the right merchants quickly and catch the wrong ones cleanly. A well-structured underwriting policy can clear the majority of merchants automatically, based on defined risk thresholds and data signals, without human intervention. That’s not cutting corners. That’s building a system that scales without adding headcount every time a partner adds merchants.

The outcome of a well-run onboarding process is a merchant who is approved, configured, and activated – processing their first transaction within days of applying, not weeks. Activation rate is the metric we obsess over because it’s often the first signal of whether a payments program is actually working.

Scaling Merchant Migrations: The Bulk Boarding Advantage

Bulk boarding is what happens when a platform has a mature merchant base and needs to move fast. It’s not a variation of standard onboarding – it’s a different operational model entirely, and one of the most powerful capabilities in embedded payments when it runs right.

It’s built for platforms migrating off legacy processors, launching payments to an existing customer base, or absorbing merchants from an acquisition. The merchant list already exists. The business relationship is established. What’s needed is a fast, clean path from data submission to live processing – at volume.

The difference between bulk boarding done well and done poorly is almost entirely operational.

Done poorly: a partner submits a merchant file, gets a spreadsheet back days later with 40% flagged for manual review and no explanation, and starts fielding support calls they can’t answer.

Done well: a clean intake template, automated validation, an intelligent underwriting layer that approves the majority instantly, and real-time visibility into every merchant’s status. 

For Payabli, bulk boarding is a genuine competitive differentiator. It’s what lets a partner with 2,000 merchants convert their entire base in weeks instead of quarters. Whether it’s 30 new customers or 30,000+ migrating at once – I’ve seen it, and we’ve executed.

Post-Live Enablement: The Metrics That Matter

Most implementation conversations end at go-live. Ours don’t.

Getting merchants live is the prerequisite. The actual value of an embedded payments program is built in the months after launch – and it’s measurable:

• Activation rate tells you if merchants are crossing the threshold from approved to processing.
• Ninety-day volume tells you if they’re ramping or stalling.
• Feature adoption – ACH, recurring billing, payouts – tells you how deeply payments are embedded in the merchant’s workflow.

Merchants who use two or more payment rails have materially higher retention than those who only accept card. That’s not an accident – it’s a function of how integrated payments become in their day-to-day operations. Chargeback rate and dispute patterns are merchant experience signals, not just risk metrics. When dispute rates spike for a cohort, there’s usually friction in the payment flow that nobody’s reported yet. Finding that early keeps merchants on the platform – and keeps partners from getting uncomfortable calls.

At Payabli, we help our partners track all of this – not as a reporting exercise, but because these metrics are the early warning system for churn and the playbook for growth. Vertical SaaS platforms who know their activation rate, 90-day volume, and product adoption curve can have confident conversations with their own leadership. Platforms who don’t are flying blind.

The Takeaway 

Implementation is the moment of truth in any payments partnership. The platforms that win in embedded payments are the ones that treat implementation as a competitive advantage, not a line item.

If you’re reading this and thinking “I wish our current payments provider talked like this” – let’s have a conversation. That’s exactly where we should start.

Key takeaways

• Financial infrastructure is how vertical SaaS platforms monetize the transaction volume already flowing through their product by owning payment acceptance, accounts payable, and the operations that connect them. 
• Most SaaS platforms only earn from the money their merchants collect. Financial infrastructure opens a second revenue channel for the money merchants send, through the same integration. 
• Fintech-led vertical SaaS companies hold the strongest retention profile of any category, with 96% gross retention versus roughly 90% for other product types.
• The right financial infrastructure strategy starts with auditing, where money already moves through your product, not with picking a vendor.

Subscription revenue only grows when you add new customers. Financial infrastructure revenue grows every time your existing merchants process a transaction. Median SaaS growth rates have settled at 26%, down from 30% two years ago, and net revenue retention across the industry has compressed to 101%. The SaaS platforms pulling ahead are not adding features. They are building a financial layer that earns on every transaction their merchants process.

This blog covers what financial infrastructure means for a SaaS platform, how it generates revenue, and how to build a strategy around it.

What is financial infrastructure for a SaaS platform?

Financial infrastructure is what lets your SaaS platform accept, send, and earn from your merchants’ money. It covers three functions: payment acceptance (Pay In) from your merchants’ customers, accounts payable (Pay Out) to their vendors and partners, and the operational layer (Pay Ops) connecting both, including onboarding, underwriting, risk, billing, and reconciliation. 

Financial infrastructure vs. payment processors

A payment processor handles one job: moving money from point A to point B. Your SaaS platform sends a transaction, the processor routes it, and a third party collects the margin.

With financial infrastructure, the economics start to shift. Your platform sets merchant pricing, the infrastructure partner processes through a unified API, and you keep the spread between the two. You also own the transaction data, which means you can optimize pricing by segment and track adoption across your merchant base.

What makes financial infrastructure a revenue layer for SaaS?

Subscription revenue grows when you add customers, while payment revenue through financial infrastructure grows when your existing customers grow, with no upsell and no new contract.

That compounding dynamic is why fintech-led vertical SaaS companies hold the strongest retention profile of any category, with 96% gross retention versus roughly 90% for other product types, according to the benchmark report by Tidemark. The more financial workflows a merchant runs through your SaaS platform, the better their experience, the more revenue you earn, and the harder your product is to replace.

How does financial infrastructure actually generate revenue?

SaaS platforms generate revenue from financial infrastructure on two sides: the money their merchants collect and the money their merchants send. Most platforms only monetize the first.

Transaction spread explained: where SaaS payment margin comes from

Every payment your merchants process through your SaaS platform has an underlying cost. Your platform charges your merchants a rate above that cost. The difference is your margin.

That margin exists on both sides. On the Pay In side, you collect margin on every transaction your merchants collect. On the Pay Out side, when merchants pay vendors through your platform, you earn on each outbound payment too.

In practice, the key variable in SaaS payment margin is not the rate. It is volume. A SaaS platform with 200 merchants processing $300,000 each annually sits on $60 million in volume. That is revenue your subscription model cannot produce without adding new customers.

Which vertical SaaS industries earn the most from embedded payments?

In vertical SaaS, the highest-value financial infrastructure opportunities sit in industries where merchants cannot operate without processing payments through the platform. Here are some of the verticals where SaaS platforms generate revenue on both sides:

How do you build a financial infrastructure strategy for SaaS?

Most SaaS platforms pick a vendor before they know what they are monetizing. The sequence below starts with scope, not technology.

Step 1: Audit where money already moves through your product

Before evaluating vendors, define the scope of your financial infrastructure. Map where merchants collect money, where they send it, and where they leave your product to do either. That map determines whether you start with acceptance only or launch with acceptance and accounts payable together.

Step 2: Choose your integration model

There are three primary paths. A hosted solution gets you live in one to two weeks with minimal engineering lift — Payabli manages underwriting, risk, and support while you start generating revenue immediately. Embedded components go deeper, embedding payments natively into your platform in four to six weeks, with the flexibility to take on more operational ownership at your own pace. An API build gives you full control over every touchpoint — custom underwriting, risk, pricing, and merchant lifecycle management — for platforms ready to operate like a full-stack payments business.

What makes Payabli different is that you’re not locked into one path. You can start hosted, layer in embedded components, and graduate to API when you’re ready — without ever needing to re-platform.

Step 3: Set pricing and revenue share that scales with your merchants

Your pricing model shapes your margin at every scale. Payabli gives you full visibility into your cost structure so you can build pricing around your vertical, not a generic blended rate, and set different rates for different merchant segments. Whether you’re running flat rate, tiered pricing, or interchange plus, the right infrastructure gives you the pricing tools and cost transparency to make this practical from day one.

Step 4: Make payments the default

None of this matters if your merchants don’t actually activate. Payments should show up where the work happens, inside the invoice, inside the vendor payout, not behind a settings tab. Set enrollment as the default during onboarding and track merchant activation rate from day one. Activation rate is the percentage of your merchants actively processing through your platform. It belongs next to retention and NRR on your dashboard.

How do you evaluate a financial infrastructure partner for SaaS? 

You have the strategy. Now you need a partner who can execute it. Get this wrong, and you rebuild. 

How can Payabli help build your SaaS financial infrastructure?

Payabli was built to help vertical SaaS platforms do exactly what this blog describes. Payment acceptance, accounts payable, and payment operations run through a single API, so you do not stitch together three vendors to cover what should be one infrastructure layer.

Beyond the integration, Payabli gives you full visibility into your cost structure, segment-level pricing controls, and interchange optimization guidance so your platform is built to capture margin from day one. Every partner gets a dedicated payments team that knows their vertical and helps shape a go-to-market strategy around payments — not a generic onboarding checklist. The conversation starts with where you are and where you want to go, not with a product pitch.

Request a demo, and we will map the financial infrastructure opportunity for your platform.

Brad Weekes, Managing Director at Software Equity Group, brings a deeply informed perspective on how fintech is reshaping vertical SaaS business models and valuations.

Drawn to the intersection of technology, strategy, and finance, Brad has tracked the rise of integrated payments for over a decade. He spent his early years analyzing public markets while building a deep, hands-on understanding of software. He helped acquire companies, scale operations, and ultimately navigate the full lifecycle—from growth to acquisition and IPO.

Today at Software Equity Group, Brad advises B2B SaaS and embedded payments companies, typically in the $5M to $50M ARR range, on majority transactions and exit strategy. 

The Shift from SaaS to Embedded Fintech

Back in 2018, Brad recalls working with a higher education software company.  The company’s core offering allowed people to register for classes online.  However, in the registration workflow, when payment was due for the class, the company handed the course registrant off to another provider to accept the payment. It was a classic scenario at the time, and one that sparked a conversation during the valuation process and with buyer conversations about how payments could be embedded in the workflow.  The acquiring company spent a lot of time on payments, far more than there was any revenue to show for it. 

Eight to ten years ago, vertical SaaS companies were starting to think about integrating payments as part of their offering and acquiring companies were intrigued.  Today, payments are no longer optional.  They are a primary driver of value. 

Knowing embedded payments should be core to your product and its future is one thing, but actually executing on an embedded payments strategy (or additional fintech offerings) requires planning and execution.  

From a product perspective, Brad notes it’s never too early to add payments.  In fact, if you start too late, you won’t have the adoption rates or revenue proof points needed.  

“You need traction—not a story.”

When it comes to customer adoption, that’s where timing really matters.  Brad stresses that traction matters more than vision.  He warns that buyers will discount “story-only” opportunities.

Beyond payments, fintech offerings like lending (marketplace-driven) and insurance (growing quickly) are emerging as additional value drivers.  But, payments still remain the most proven and scalable entry point.

If you’re a vertical SaaS founder starting or evolving your payments and embedded fintech offerings, Brad suggests you keep a few payment-specific KPIs in mind. 

Payments-Specific Metrics:

• Payment penetration (critical)
• Total payment volume (TPV)
• Net take rate trends
• Cohort adoption over time

Common Mistakes Founders Make 

When embedding payments into your product to boost valuation and increase exit opportunities, there are a few simple mistakes you can easily avoid.  

Brad has seen founders say, ‘‘we’ll just plug in payments here,” but he cautions it’s not that easy. There’s a lot underneath the hood. Here’s Brad’s quick guide to common payments mistakes and how to avoid them.

Underestimating Complexity

Risk: Payments ≠ simple plug-in

Opportunity: Think through operational, compliance, and go-to-market challenges

Low Penetration Across Customer Base

Risk: Starting too late to gain traction and build strong adoption rates.  Reduces credibility. Opportunity: Embed payments early. Draft and execute an adoption playbook.

Treating Payments as a Bolt-On

Risk: Lack of deep workflow integration

Opportunity: Make payments a critical part of the workflow. The stickier payments are, the harder they are to rip and replace. 

Why Embedded Payments Increase Company Value

Seeing how embedded payments drive immediate revenue, increase retention, and expand gross profit, it’s no surprise they are a primary driver of value.  As Brad notes, embedding payments is effectively “found money” from your existing customer base. 

“These SaaS companies find a new revenue stream with payments—often overnight. If they have an existing install base, they flip the switch on payments and NRR goes through the roof, and their gross profit grows dramatically.”

Embedded payments also help deepen product integration and customer retention.  Your solution shifts from being a tool to a mission critical system thanks to tightly integrated workflows.  

You also unlock new ways to monetize customer activity.  The typical SaaS model is usage-based – depending on growth of seats.  With embedded payments, you’re opening up possibilities of usage-based and outcome-based pricing.  

“Now you have not only the software platform, but payments—which is a critical part of the workflow. Ripping that out becomes much more difficult.”

To ensure you maximize your valuation, Brad suggests you keep a few of these key metrics strategic buyers will scrutinize in mind.  

Financial Metrics 

• Gross revenue vs. net revenue
• Gross margin of payments stream
• Cost structure (processing, interchange, etc.)

SaaS + Payments Combined Metrics

• Net Revenue Retention (NRR)
• Gross Revenue Retention (GRR)
• Rule of 40
• Gross margin profile

As you build out your embedded payments offering and your overarching pricing models, Brad does caution not to get too creative.  He’s seen a few founders over-optimize pricing models (i.e. “free SaaS, monetize only payments’) to the point that it creates a lack of revenue stability and buyer skepticism. 

“When you get too creative, you add noise. Buyers start asking, ‘why are you doing this?’ It just creates more questions than value.”

SaaS companies are facing a lot of pressure today as AI takes over that pricing models should be more outcome-based. There’s two sides to that coin because while buyers and investors might find the increased gross profit margin attractive, it’s likely that if you view that revenue stream like an annuity it’s not considered as valuable as contracted SaaS. 

When we get a payments company with transaction or usage based activity, we try as much as we can to make it look like contracted recurring revenue. We want this payments revenue stream to look exactly like this recurring SaaS stream. Brad often argues embedded payments revenue is better because the NRR goes through the roof compared to contracted SaaS, which is limited by price increases that are CPI basis.

Tracking these metrics isn’t just good hygiene — it’s how you build a credible exit narrative. To make it easier, we put together a Payments Cohort Analysis Template you can use to track payment penetration rates, TPV trends, net take rate, and cohort adoption over time. It’s built around the exact data points acquirers will ask for.

Download the Payments Cohort Analysis Template →

Key Takeaways for Vertical SaaS Founders

• Payments can materially increase enterprise value
• Traction > vision when it comes to valuation
• Multiples can vary dramatically — working with an investment banker who understands embedded payments and can shape the narrative around your payments business may significantly improve your outcome

The best model combines:

• SaaS stability
• Payments upside
• Deep integration beats surface-level add-ons
• Start early — but execute thoughtfully

Ready to Build Payments Into Your Platform?

Brad’s advice is clear: the window to get ahead of this is now. Payments aren’t a feature you add when you’re ready to sell — they’re the infrastructure that makes your platform worth buying.

If you’re a vertical SaaS company looking to embed payments the right way — with the workflow integration, compliance backbone, and financial infrastructure that actually moves the needle on valuation — that’s exactly what Payabli is built for.

Book a demo with the Payabli team →