BaaS shifting toward vertical software

This split shows that BaaS was already shifting from pure fintech apps toward software companies that control a real workflow and can attach financial products to it. A fintech starts with money and looks for users. A vertical software company starts with users doing a job, like booking appointments, running payroll, or collecting payments, then adds cards, accounts, or lending exactly where the money problem appears. That makes adoption more natural and the product harder to rip out.

• The Squire example shows why vertical software mattered. Squire already ran barbershop scheduling and payments, so it could spot a specific cash flow gap for barbers and use Bond to launch instant payout via the Squire Card, instead of offering a generic bank account.
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• The customer mix also maps to two different BaaS economics. Fintech customers often chase interchange directly, which can create breakout volume but also concentration risk and pressure to give big customers better pricing. Embedded finance and vertical software customers usually grow more steadily and are less likely to build the stack themselves.
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• By 2024, Bond was leaning further into vertical SaaS. Roy Ng said the business had been about 50/50 in 2021, but later doubled down on vertical SaaS because larger software platforms had clearer demand, clearer ROI, and stronger reasons to embed finance as an add on to an existing core product.
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This points to where embedded finance keeps going. The winners are likely to be software platforms that already own day to day workflows in a niche and can layer in money movement, cards, and lending as a second monetization stream and a retention tool. BaaS providers increasingly orient around those platforms, not around another stand alone fintech app.