Small business owners work hard to serve their customers and keep their business alive, but they require support to streamline operations and improve efficiency. Vertically specialized SaaS platforms have risen to fill this need, automating and centralizing the different tools to run basic business operations, from managing inventory to table reservations. And SMBs have embraced these solutions: Adyen and BCG’s new Embedded Finance Report finds that up to 80% of SMBs use a SaaS platform to help run their business. 

Against this backdrop of higher market maturation, SaaS platforms are facing intensified competitive pressure and looking to differentiate on offering as much as price. Savvy platforms increasingly seek growth not through user acquisition alone, but through service expansion and lifting average revenue per user. Four embedded financial products drive significant revenue potential for SaaS platforms in the SMB space: Payments, Capital, Accounts, and Issuing.

With the highest adoption, payments is now the cornerstone for embedding broader financial products. According to Adyen and BCG’s research, approximately half of platforms use semi-integrated payment models, which cause operational inefficiencies and missed revenue. Shifting to a fully embedded payment experience, with features like automated reconciliation and centralized support, unlocks a new level of convenience for SMBs, and 97% of SMBs experience higher satisfaction with embedded payments. 

“The brands that are succeeding today see finance as a strategic enabler of their business, rather than taking the traditional view, which is to view payments as mere necessity,” explained Adyen co-CEO Ingo Uytdehaage. “If you improve customer journeys, you can ultimately increase revenue, and your payment solution plays a key role in helping you do that.”

Uytdehaage recently contributed to a keynote panel at Money20/20, entitled “Innovation at Speed: The Future of Embedded Finance and Payments,” which explored the growing role for embedded finance in today’s business ecosystem. Read on to learn the key takeaways from the discussion — including how embedded payments mutually benefit platforms and their customers, and how platforms can leverage embedded finance to capture new revenue streams. 

Embedded payments: A win-win-win for customers, businesses and platforms

Embedded payments refers to payment solutions that are built natively into a SaaS platform’s product. With embedded payments, the platform can make payments part of their product offering. Rather than receiving a set kickback fee from a payments provider, the platform can decide how to price per payment and additional features. Moreover, embedded payments can increase the platform’s customer lifetime value by attracting and retaining users with a stickier customer experience. 

And although payments still hold considerable untapped potential, an equally large opportunity lies in other financial product categories, where adoption is rapidly accelerating. Broadly, embedded finance offers significant benefits for the platforms that offer it, including:

Additional revenue opportunities

Embedded finance can open up additional revenue streams for the platform, helping to fuel growth. The total addressable market for embedded finance in 2024 was $185 billion, according to research conducted by Adyen and BCG — and 80% of the market remains untapped. 

With a provider like Adyen, SaaS platforms can white label the full suite of embedded financial products, including payments, cash out, accounts, issuing, and capital. The entire offering is completely within the SaaS platform’s experience, but Adyen provides the backend financial technology. And the more products the SaaS platform embeds, the more monetization opportunities for the platform. 

By providing a broad product suite ranging from payments to capital, accounts, and cards, platforms meet SMB demand and reinforce revenue growth through a self-sustaining cycle of monetizing the same dollar multiple times.

A competitive edge for attracting and retaining businesses

Embedded financial services are quickly becoming a major advantage for platforms, with four in 10 small business owners saying they are interested in embedded finance payments from their platforms. And as more platforms turn to embedded finance, SMB users get more comfortable using non-traditional banking options. 

Embedded finance also enables platforms to gather richer customer insights, which they can then use to deepen customer relationships, said Uytdehaage. “You can identify the preferences of your most valuable customers, which creates opportunities to provide tailored services at the lowest cost.”

A better customer experience

Ultimately, embedded finance allows SaaS platforms — and their SMB customers — to enhance the customer experience. Platform users gain easy and convenient access to financial solutions that meet their needs, eliminating the need to try and integrate an external payment solution into their platform of choice. And consumers gain the ability to complete purchases through a native portal, allowing for fast, easy and seamless checkout. 

“At the end of the day, embedded payments are about improving the customer journey,” Uytdehaage explained. “If you can improve the workflow for your customers — and help them enhance the experience for their customers — that will ultimately increase revenue.”

Success with embedded payments requires finding the right provider

Of course, your embedded finance offering is only as strong as the solution offered by your provider. And Uytdehaage recommended that platforms assess potential embedded finance providers across four key metrics — reliability, scalability, compliance and innovation — to find the right fit. 

Reliability comes in the form of a track record of excellence. The ideal embedded finance provider should have a deep understanding of customers’ evolving expectations, so platforms can offer their clients innovative solutions that remain ahead of customer trends.  

The optimal partner should also offer flexible solutions that can scale globally, so platforms can reach clients worldwide — and support business’ own global expansions. “The combination of the right technology and the right combination of licenses in multiple geographies will help you and your clients scale,” Uytdehaage said. 

Of course, customer safety and compliance are key. And partnering with a financial services partner allows platforms to provide compliant financial products without the need to develop — and maintain — their financial offerings in-house. 

Finally, platforms should seek out a provider that values innovation to support long-term success, Uytdehaage advised. “You want a partner that is continually looking toward the future and investing in innovation to meet the needs of your clients tomorrow, not just today.”

Adyen for Platforms allows SaaS platforms to unlock new revenue streams with embedded payment processing solutions as well as financial products including card issuing, business accounts and business financing. Visit us online to learn more.