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SaaS platforms are seeing increased competition within their specific industries, and need to stay one step ahead of their small to medium-sized business users’ needs to continue winning their loyalty and business. And while planning product roadmaps around what those users are asking for is important, there are often larger opportunities beyond what the SMB is directly asking for.
Over time, SMBs have come to rely on their SaaS platform to manage their daily operations,” says Mehreen Iqbal, GTM lead for embedded financial products at Adyenat Adyen. “We’re continuing to see platforms build on the trusted partnership they have with their SMB users by offering features that address the financial pain points they encounter day to day.
Embedded finance functionalities are one example. Adding financial services — such as business bank accounts, debit or credit cards, or access to lending — enables SaaS platforms to give their SMB users new options for effectively and efficiently managing financial aspects of their businesses.
Adding financial services helps SaaS platforms become one-stop hubs for their SMB users — saving those users valuable time by enabling them to both run their daily operations and manage their business finances using a single solution. Speed, simplicity and control are key to meeting the needs of SMB users.
“We view embedded financial products as long term growth accelerators. If we’re not doing them today, it’s going to be a problem three, four, or five years down the road,” said Christian Fadel, CFO of AffiniPay.
By offering financial services tools and features, SaaS platforms can become stickier and more indispensable — and unlock new sources of revenue. Market leaders like Toast, Lightspeed, Shopify and Bill all earn more than half their revenue from embedded financial services today.
But driving user adoption of embedded financial products requires a well-planned roadmap. As SaaS platforms look to incorporate financial services tools and features into their offerings, they can benefit from taking the following five steps.
1. Understand customer needs
Before embedding payments or other financial services, SaaS platforms need to understand where their customers need help, even if users aren’t proactively asking their platform for specific solutions. Conducting customer interviews and understanding where they currently have challenges with their financial service provider is essential to understanding SMB users’ pain points and developing customer-centric product roadmaps that address those challenges.
Among attorneys, for example, “you hear about things like their clients having trouble paying for legal services — and that they could get more clients if there were financing options available to clients,” said Fadel, whose company, AffiniPay, has implemented a Pay Later product into its LawPay solution. “Our market research was really about uncovering pain points, like finding out where they have trouble acquiring new clients.”
2. Build a business case
As SaaS platforms consider embedded financial services, they need to make pricing and product development decisions with long-term growth in mind.
This includes making a financial model and understanding the additional revenue streams new financial products unlock, the additional users they can attract to the platform and the increased usage and stickiness that comes with embedding more products into a platform’s ecosystem. SaaS platforms will also need to decide how to package (and price) payments alongside their existing software offering, considering separate, freemium, or all-in-one models. Finally, SaaS platforms may need to invest in support or operations to safely handle a sensitive part of their users’ business.
3. Start with payments
Embedded payments is the foundation for embedding all other financial services. When SaaS platforms embed payments, they develop the ability to help their SMBs with their most critical priority — making money.
Embedded payments and enabling their user’s revenue paves the way for SaaS platforms to offer other financial services to their users. With access to their users’ daily transactions and sales trends, for example, a SaaS platform can offer embedded financial products that are tailored to those users’ money flows — creating extra benefits for them to stay on the platform.
4. Focus on education
Increased usage and stickiness don’t happen on their own, however. SaaS platforms should invest in educating both internal teams and SMB users on the benefits of adopting embedded finance products.
When planning their embedded finance roadmaps, SaaS platforms should account for all of the resources and team members they’ll need to successfully introduce each new feature. Necessary team members include go-to-market leaders, commercial teams (in areas like sales, account management and customer success), marketing, product and customer support.
5. Work with the right partner
When deciding how to embed financial products into their offerings, SaaS platforms have options — such as working directly with a financial institution, working with a technology solution that partners with a financial institution or working with a full-stack solution with its own banking license.
Adyen’s financial technology platform, for example, is a full-stack banking-as-a-service (BaaS) solution that equips SaaS platforms with reliable and flexible end-to-end embedded finance infrastructure. As a full-stack BaaS solution with its own banking license, Adyen can innovate and customize tools and features for SaaS platforms quickly, without the hindrance of third parties. Saas platforms benefit from this speed and control to deliver the best products and experience to their users.
Ultimately, embedded financial products from SaaS platforms can help SMBs improve how their businesses operate. Offering embedded payments and embedded financial products helps SaaS platforms stay ahead of their SMB users’ needs and play a long-term role in their growth.
To learn more about Adyen’s complete suite of financial products and services for SaaS platforms, go to adyen.com.
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