What Comes After Payments? The Next Phase of Embedded Finance: A Q&A

Payments used to be a box for software companies to check: pick a processor, integrate, and move on. But that mindset is fading fast. Today, vertical SaaS (software as a service) platforms are treating payments — and the financial products that follow — as a genuine line of business, one that drives new revenue, deepens customer relationships, and makes their software more valuable to users. 

But knowing the opportunity exists and actually capturing it are two different things.  

How does a software company decide which embedded finance model fits? What makes customers actually adopt a payment product? And where does the opportunity go after payments? 

To answer those questions, I sat down with Greg Myers, host of the Leaders in Payments podcast, to talk about how software companies can turn payments into a successful business.  

Read a highlight of our conversation below, or listen to the full podcast. 

What embedded finance means for vertical SaaS

Greg Myers: Vertical software companies are starting to look beyond their core platforms to explore how payments and other financial products can create new revenue, strengthen customer relationships, and deliver a smoother experience.  

When you hear the term “embedded finance” today, what does it mean to you, specifically from the perspective of vertical SaaS companies? 

John Badovinac: Embedded finance is the next evolution of the questions being asked by really smart developers.  

What I mean by that is, many of the SaaS partners I speak with grew up in the specific vertical they serve. At some point, they started asking questions about that business — not just their payment-related needs — but the overall needs of that business. And the better those questions were, the better they could develop a product to meet those needs more comprehensively. 

And so, the next evolution beyond payments is broader embedded finance. That means that once we’ve established payments and understand a platform’s typical spend and transaction volume, we can identify additional financial services like working capital and embed them in a way that fits naturally within the software merchants already use every day. 

Myers: Payments, as you know, have been historically viewed by software companies as an integration or a feature. Today, that’s changing. So, why do you think that more vertical SaaS companies are starting to view payments as an actual line of business? 

Badovinac: I think it’s primarily because they want to own more of the experiences that are important to them. When they think more deeply about how they differentiate themselves and the solutions they provide for their users, they have to own more of the overall experience to set themselves apart from competitors. 

At Flute, we help them think through not just connecting features and executing an integration, but how to build a payment business.  

That starts with a consultancy that models different pricing options and helps them build an authentic in-app experience that makes it really easy for their customers to participate. We also help them understand how to incorporate payments into the right place within their user journey.  

Every integration differs by vertical. Some SaaS customers need scheduling and in-app payments, while others need invoicing, text to pay, or contactless options like Apple Pay. So instead of just embedding a checklist of payment features, we help identify the right payment feature for their use cases and thoughtfully surface it at the right time within their native UI. 

How to know when a platform is ready to own payments

Myers: When you sit down with these vertical SaaS companies, what tells you whether they’re truly ready to own more of the payment experience? 

Badovinac: The key thing I look for when I talk to a software provider for the first time is their value proposition. What’s their unique right to win? What is going to deliver the value they’re solving within the problem sets they’ve identified? 

Secondly, do they have a sales playbook that really works? Or are they relying on their founders and their personalities to drive sales? 

Finally, is their operations playbook up to snuff? I always ask about their CRM (customer relationship management) tools and how they’ll support everything once payments are embedded. 

Those are prerequisites to knowing they’re ready to scale. When a platform has those three things — a repeatable sales playbook, a tight CRM, and a solid support structure — then we can pair that with a unique value proposition and really start to dig in. 

Myers: There are several different models a software company can use to embed payments and other financial services. There’s the simple referral model, the PayFac (payment facilitator) model, and a fully integrated approach. In your opinion, how should a SaaS company think through which model is right for them? 

Badovinac: That’s a great question. I would start by asking what experience they want to deliver to their customers, and how that applies to their overall value proposition. I always recommend that they own whatever is most important to them and then find a partner or outsource the rest. 

So, if they need to be set up fast, then onboarding with minimal friction and as few questions as possible is most important. But if they want a more personalized journey that’s not as time-sensitive, they can onboard at a more leisurely pace and explore more advanced features. 

Whatever sets a SaaS company apart, and what differentiates them the most, will ultimately drive what they need to fully own and optimize versus what can be outsourced to someone else. 

What drives real payment adoption

Myers: A software company can build a great payments product, but that doesn’t necessarily mean that their customers are going to use it. So what are the companies achieving strong payment adoption doing differently? 

Badovinac: I think the best answer to that is to make the payment experience natural and genuine within the platform’s workflows. 

I’ll give you an example: I spoke with one platform that made it possible for a medical practitioner to look at their schedule of completed appointments and then send bills, like text reminders or digital payment links, directly from their calendar. 

That’s a nice way to align functional software features with a collections- or payment-related opportunity. It’s about working payments into the most contextually appropriate setting and then making it easy for that customer to use. 

Embedded finance opportunities beyond payments

Myers: We’ve been talking about payments, but there are opportunities for other financial products like working capital, lending, payroll, accounting, and banking products. In your opinion, what’s the next phase for embedded finance beyond payments? 

Badovinac: That opportunity starts with payments, where platforms can start to generate data and create workflows that are easy for their users to engage with. From there, working capital and instant payouts are natural extensions, since they rely on the data generated from payments. 

From there, the next frontier is asking the right questions about the next phase of that business need: How can I access my funds faster, and how can I control where they’re used? To me, that means card issuance with spend controls. Working capital and instant payouts can be deployed directly to company expense cards that can only be used where intended, up to defined limits, with enhanced reporting and reconciliation 

So, thoughtful applications of technology and rules-based governance could go alongside issued cards as a logical next step.  

Building a payments business, not just an integration

Myers: You’ve been working with software companies for a long time. What are some of the biggest mistakes you still see companies making when they’re starting to embed payments? 

Badovinac: The first was assuming that because our partners were software experts, they’d also be payments experts. Payments pricing and statement analysis can get complicated quickly, and I learned that we needed to provide more guidance rather than asking partners to make all of those decisions on their own.  

Now, we consult with them upfront on profitability levers and go-to-market pricing, build pricing templates directly into automated enrollment, and even assign a relationship manager who can take applications, train their team, and help them gradually own more of the onboarding experience. 

The second mistake I see is thinking that integration is the end of the journey. It’s not — it’s just the starting point. 

The most important thing is whether they have natural adoption and whether they’re getting traction from the payment interfaces they’ve embedded into their native SaaS UI. If they’re not, then they need to tweak something. So, some education needs to happen as well.  

To me, the ultimate measure of success is when they start to gain traction on their own without a lot of effort from their end customers.  

Myers: When a vertical SaaS company is evaluating embedded payment partners, what is it about Flute’s approach or capabilities that truly makes you unique? 

Badovinac: That’s a great question. First and foremost, we can get SaaS platforms live in days. We use agentic development to dramatically reduce the time, cost, and engineering effort required to integrate, which lowers the risk and expense of getting started.  

Another benefit is the consultancy we provide. We help them build a pricing policy that makes sense, then embed it into templates within their UI using an onboarding API — and integrate webhooks natively so onboarding and enrollment data flow into their UI in real time. 

We also have a dedicated engineering team, which means we’re uniquely equipped to collaborate and build out additional functionality based on the frontline demands and insights our customers have. 

Myers: What’s one thing you want vertical SaaS leaders to understand about building a payments business inside their software? 

Badovinac: The biggest thing I’d tell them is that you’re not just integrating payments — you’re building a payments business. The integration is actually the easy part. You have to think about the economics, where payments belong in the user journey, how you’re going to drive adoption, and how you’ll support it as you scale. The right partner should help you with all of that, not just hand you APIs. 

Listen to the full conversation here.  

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