A SaaS company without integrated payments gives up transaction revenue on every invoice its customers collect, and it makes its own product easier to replace. Boston Consulting Group reported in September 2025 that more than half of relevant independent software vendors in North America offer embedded payments. In many software categories, a vendor that still sends customers to a separate terminal or portal is now the exception.
Revenue Beyond the Subscription Fee
A subscription price changes only when a vendor raises it or sells another seat. Payment revenue grows with the customer’s own sales, so a gym management product earns more from a gym’s membership billing as that gym adds members, with no new contract and no additional sales call.
Andreessen Horowitz estimated in August 2020 that SaaS companies adding financial services could increase revenue per customer by 2 to 5 times. Its illustration was a vertical software customer spending $200 per month on traditional software and a further $800 per month on financial services such as payments and payroll, with that second amount going to other vendors. The figures are hypothetical, so a real customer base will produce a different ratio.
Boston Consulting Group measured the market from a different angle. Software providers offering integrated payments accounted for 36% of small and midsize business acquiring revenues in 2024, and the firm expects that share to reach 45% by 2028. Acquiring revenue is the income earned from processing card payments on behalf of merchants. A vendor without payments collects none of it.
Retention Effects of Payment Integration
Payments change how often a customer opens the product. A scheduling tool used once a week becomes a daily tool when it also collects deposits and issues refunds. Each completed transaction adds records that a competing product would have to migrate. Boston Consulting Group reported that the attrition rate among customers using embedded payments was 2.5 times lower than among customers who were not.
Adoption of vertical software among small and midsize businesses in the United States reached 59% in 2024, up from 50% 2 years earlier, according to the same research. More owners now manage daily operations from a single application, and a product that includes billing inside that application removes a second login from the owner’s day.
The same owner is also less likely to cancel a tool that contains customer payment history.
Build and Partner Decisions
Most software teams do not have the staff to operate as a regulated payments company. Boston Consulting Group notes that compliance and identity checks are not a core capability of many SaaS providers, especially smaller ones. A company evaluating payments for software platforms should ask how much of the onboarding, compliance, and settlement work the provider will take on and how much remains with its own team.
In a partner model, the vendor owns the product screens and customer support while the partner is responsible for licensing, risk operations, and the movement of funds. In a payment facilitator model, the vendor keeps a larger share of each transaction and takes on more liability for merchant losses. Decide this at the start of the project, because moving between those models later can require merchants to complete onboarding again.
Implementation Sequence
A first release can be limited to card acceptance for the most common transaction type, with bank transfers and payouts added as volume grows. Boston Consulting Group reported that only a single-digit percentage of merchants consistently use software finance products such as cash advances, so lending and deposit accounts can wait until payments are working.
Existing customers are the first audience for the launch. A vendor can estimate the opportunity by multiplying customers’ annual card volume by the net share it expects to keep, then comparing the result with the cost of implementation and support.
Pricing Models for Payment Features
Vendors generally choose among 3 pricing approaches. Interchange-plus pricing passes the card network’s cost through to the merchant and adds a fixed markup, and larger customers often request it because they audit their statements. Flat-rate pricing charges a single percentage on every transaction, which is simpler to explain and gives the vendor a wider margin on low-cost cards. A third approach offers a reduced subscription price to customers who agree to use the built-in payments, and vendors use it when they want most of their base on the product within a short period.
Pricing should be published where a customer can compare it with a current statement from another provider. An unexplained fee on a merchant’s first statement produces a support ticket and, in some cases, a cancellation. Review the fee schedule as closely as the product launch itself.
Regulatory and Risk Obligations
Moving funds for merchants brings obligations that a pure subscription company never faces. Merchant screening exists in large part to prevent money laundering, the practice of making criminal proceeds usable as if they were earned legally, and a vendor that boards merchants without adequate checks exposes both itself and its banking partners to penalties.
Card data adds a second set of requirements. Vendors can reduce that burden by using hosted payment fields, which keep card numbers off their own servers, and by confirming which security responsibilities the contract assigns to each party.
Boston Consulting Group found that the multiple on a dollar of embedded finance earnings is lower than the multiple on a dollar of SaaS earnings, citing credit exposure and regulatory burden among the reasons. Finance teams should therefore report gross margin on payment revenue separately from subscription revenue, since gross margin is what remains of sales after the direct costs of delivering them.
Reconciliation Inside the Product
Reconciliation is the matching of payments received against invoices issued, and it is a manual job when the 2 records are kept in separate systems. An office manager exporting a processor report and comparing it to a spreadsheet is doing work the software could do automatically.
When payments settle inside the system that issued the invoice, the owner can see which invoices are paid on the day the funds arrive. That visibility improves cash flow management because a late invoice is identified while there is still time to follow up on it.
Cost of Delay
A SaaS vendor that postpones payments loses in 2 places. Transaction revenue continues to go to whichever processor each customer selected, and those customers remain easier for a competitor to win because their billing history is kept outside the product. Both losses grow as integrated providers move toward a projected 45% of small and midsize business acquiring revenues by 2028. Rivals that offer payments can contact every account on the vendor’s list, and the losses show up later in the vendor’s churn rate.
