Payments Acceptance as Embedded Fintech Wedge
Matt Brown, partner at Matrix Partners, on emerging trends in fintech and AI
Payments acceptance is the easiest embedded fintech wedge because it turns a software company into the merchant’s cash register on day one. A vertical SaaS platform already handles booking, invoicing, or checkout, so adding card acceptance lets it monetize every transaction immediately, without waiting for users to adopt a new spend card. That makes revenue faster, broader, and more natural than interchange for most SMB software companies.
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The product motion is simple. The software company plugs payments into the workflow the merchant already uses, like invoices, deposits, or point of sale, then keeps the spread between the retail processing rate charged to the merchant and the lower wholesale rate it gets from Stripe, Finix, or another processor.
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Acceptance works better than issuing as an early monetization path because almost every small business needs to get paid, while far fewer have enough card spend to justify a card program. That is why payments usually comes first, then lending, banking, or cards once the platform is already sitting in the flow of funds.
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The best comparables show how large this can get. Toast was cited as getting almost 80% of revenue from payments, ServiceTitan’s fastest growing revenue came from card payments inside its field app, and HoneyBook has expanded from workflow software into embedded finance after building payments into its core user flow.
From here, more vertical software companies will use acceptance as the first financial product, then stack lending and banking on top once they control checkout and payouts. The winners will be the platforms that own the daily workflow and can make getting paid feel automatic, because that creates both immediate take rate revenue and a base for higher margin financial products later.