Embedded Payments
Why Most Vertical SaaS Companies Get Embedded Payments Wrong (And How to Get It Right)
Alejandro Serrat
Jan 13, 2026
Most vertical SaaS companies get embedded payments wrong. They either underestimate the complexity and launch products that fail to gain traction, or they overestimate the difficulty and miss out on their single biggest revenue opportunity.
Our CEO Alex Schoonkind sat down with Lars Markull on the Embedded Finance Review Podcast to discuss what it actually takes to get it right, from timing and pricing to operational realities and customer adoption.
The Embedded Payments Paradox
Most founders fall into one of two traps. Some believe launching a generic payments offering will instantly drive adoption across their customer base, underestimating the operational complexity involved. Others worry that offering payments will make them "look like a bank" and avoid it altogether, leaving significant revenue on the table.
The reality? Both approaches miss the mark.
Before diving into embedded payments, Alex recommends asking yourself one critical question: "Do you see a future of yourself as a financial services company?"
If you can't answer with a clear yes, you're probably not ready. Payments isn't just a feature you bolt on it's an operational product that requires commitment from leadership, resources, and a fundamental shift in how you think about your platform.
Getting the Timing Right
So when is the right moment to make the move?
Alex's rule of thumb: wait until you can monetize between €20-50 million in yearly transaction volume. At a typical 1% revenue share, this generates material revenue that justifies the engineering effort, support overhead, and operational investment.
But volume alone doesn't tell the whole story. You need to be what Alex calls "the platform of record" the software your customers absolutely cannot run their business without. If your platform goes down and their operations stop, you're ready. If you're a nice-to-have tool sitting on top of their core system, embedded payments probably won't achieve meaningful adoption.
Think about it: If you build restaurant management software that handles reservations, inventory, and staff scheduling, you're the platform of record. If you built an AI communication tool for medical practices, you're likely not yet.
Addressing the Support Question
One of the biggest hesitations we hear: "Won't we be overwhelmed with support tickets?"
If you're getting lots of questions, you're also processing significant volume, which means you have the revenue to hire support staff. The operational overhead is real but manageable, and the revenue from successful payment integration more than justifies the investment.
The key is building the right user experience from day one. Seamless onboarding, intuitive KYC flows tailored to your specific customer base, and clear communication about how payments work within your platform all reduce friction and support burden.
Why Flexible Pricing Isn't Optional
Generic payment providers built their infrastructure for direct merchant companies like Netflix or Uber, processing millions in transactions. When vertical SaaS platforms try to use these solutions, they run into rigid pricing models that don't fit their business reality.
Your customers might process €5 transactions alongside €5,000 invoices. You might want to bundle SaaS subscription fees with payment processing costs. You need pricing structures that align with your specific industry economics not one-size-fits-all interchange-plus models designed for e-commerce.
This is where specialised embedded payment infrastructure makes the difference. Built specifically for platforms, not merchants.
The European Opportunity
Here's a striking data point: while 60-70% of US vertical SaaS companies have embedded payments, Europe sits at around 20% adoption.
Why the gap? Europe's complexity multiple currencies, languages, payment methods, and regulatory frameworks makes it harder to launch generic solutions. But this complexity also creates opportunity for platforms that get it right, working with payment partners who understand the nuances of local markets.
What's Next?
Within 10 years, generic payment providers serving SMBs directly will largely disappear. Instead, most small businesses will run on vertical SaaS platforms that provide embedded financial services, payments, capital, issuing, as part of the core product experience.
The question isn't whether embedded payments will become standard in vertical SaaS. It's whether your platform will lead the transition or play catch-up.
Want to hear the full conversation? Alex and Lars dive deeper into KYC challenges, the evolution from SaaS-led to payments-led revenue models, and why industries like healthtech and proptech are missing massive opportunities. Listen to the complete podcast on Embedded Finance Review or Spotify.
Most vertical SaaS companies get embedded payments wrong. They either underestimate the complexity and launch products that fail to gain traction, or they overestimate the difficulty and miss out on their single biggest revenue opportunity.
Our CEO Alex Schoonkind sat down with Lars Markull on the Embedded Finance Review Podcast to discuss what it actually takes to get it right, from timing and pricing to operational realities and customer adoption.
The Embedded Payments Paradox
Most founders fall into one of two traps. Some believe launching a generic payments offering will instantly drive adoption across their customer base, underestimating the operational complexity involved. Others worry that offering payments will make them "look like a bank" and avoid it altogether, leaving significant revenue on the table.
The reality? Both approaches miss the mark.
Before diving into embedded payments, Alex recommends asking yourself one critical question: "Do you see a future of yourself as a financial services company?"
If you can't answer with a clear yes, you're probably not ready. Payments isn't just a feature you bolt on it's an operational product that requires commitment from leadership, resources, and a fundamental shift in how you think about your platform.
Getting the Timing Right
So when is the right moment to make the move?
Alex's rule of thumb: wait until you can monetize between €20-50 million in yearly transaction volume. At a typical 1% revenue share, this generates material revenue that justifies the engineering effort, support overhead, and operational investment.
But volume alone doesn't tell the whole story. You need to be what Alex calls "the platform of record" the software your customers absolutely cannot run their business without. If your platform goes down and their operations stop, you're ready. If you're a nice-to-have tool sitting on top of their core system, embedded payments probably won't achieve meaningful adoption.
Think about it: If you build restaurant management software that handles reservations, inventory, and staff scheduling, you're the platform of record. If you built an AI communication tool for medical practices, you're likely not yet.
Addressing the Support Question
One of the biggest hesitations we hear: "Won't we be overwhelmed with support tickets?"
If you're getting lots of questions, you're also processing significant volume, which means you have the revenue to hire support staff. The operational overhead is real but manageable, and the revenue from successful payment integration more than justifies the investment.
The key is building the right user experience from day one. Seamless onboarding, intuitive KYC flows tailored to your specific customer base, and clear communication about how payments work within your platform all reduce friction and support burden.
Why Flexible Pricing Isn't Optional
Generic payment providers built their infrastructure for direct merchant companies like Netflix or Uber, processing millions in transactions. When vertical SaaS platforms try to use these solutions, they run into rigid pricing models that don't fit their business reality.
Your customers might process €5 transactions alongside €5,000 invoices. You might want to bundle SaaS subscription fees with payment processing costs. You need pricing structures that align with your specific industry economics not one-size-fits-all interchange-plus models designed for e-commerce.
This is where specialised embedded payment infrastructure makes the difference. Built specifically for platforms, not merchants.
The European Opportunity
Here's a striking data point: while 60-70% of US vertical SaaS companies have embedded payments, Europe sits at around 20% adoption.
Why the gap? Europe's complexity multiple currencies, languages, payment methods, and regulatory frameworks makes it harder to launch generic solutions. But this complexity also creates opportunity for platforms that get it right, working with payment partners who understand the nuances of local markets.
What's Next?
Within 10 years, generic payment providers serving SMBs directly will largely disappear. Instead, most small businesses will run on vertical SaaS platforms that provide embedded financial services, payments, capital, issuing, as part of the core product experience.
The question isn't whether embedded payments will become standard in vertical SaaS. It's whether your platform will lead the transition or play catch-up.
Want to hear the full conversation? Alex and Lars dive deeper into KYC challenges, the evolution from SaaS-led to payments-led revenue models, and why industries like healthtech and proptech are missing massive opportunities. Listen to the complete podcast on Embedded Finance Review or Spotify.