Chapter 2
Build for scale before you need it
Chapter 2
Build for scale before you need it
Chapter 2
Build for scale before you need it
Chapter 2
Build for scale before you need it
“If you just approach payments generically — ‘our competitors are doing it, so we need to do it’ — you’re not really adding value. Think about what workflows your customers are doing and how payments can improve their experience.”
Ash Forsythe
General Manager, Payments & Patient Collaboration, ModMed
Many vertical software companies come to embedded payments the same way: a competitor launches it, so they do too. That's a product decision, not a commercial one. And it's where commercial readiness problems can start.
Building that depth of understanding across leadership and the broader team takes deliberate investment. The platforms that get it right treat payments expertise as a core competency, not a vendor relationship.
But you don't have to build that expertise alone. Your payments technology partner is a critical resource for translating complexity into business strategy. The earlier you engage them, the better.
“If you just approach payments generically — ‘our competitors are doing it, so we need to do it’ — you’re not really adding value. Think about what workflows your customers are doing and how payments can improve their experience.”
Ash Forsythe
General Manager, Payments & Patient Collaboration, ModMed
Many vertical software companies come to embedded payments the same way: a competitor launches it, so they do too. That's a product decision, not a commercial one. And it's where commercial readiness problems can start.
Building that depth of understanding across leadership and the broader team takes deliberate investment. The platforms that get it right treat payments expertise as a core competency, not a vendor relationship.
But you don't have to build that expertise alone. Your payments technology partner is a critical resource for translating complexity into business strategy. The earlier you engage them, the better.
“If you just approach payments generically — ‘our competitors are doing it, so we need to do it’ — you’re not really adding value. Think about what workflows your customers are doing and how payments can improve their experience.”
Ash Forsythe
General Manager, Payments & Patient Collaboration, ModMed
Many vertical software companies come to embedded payments the same way: a competitor launches it, so they do too. That's a product decision, not a commercial one. And it's where commercial readiness problems can start.
Building that depth of understanding across leadership and the broader team takes deliberate investment. The platforms that get it right treat payments expertise as a core competency, not a vendor relationship.
But you don't have to build that expertise alone. Your payments technology partner is a critical resource for translating complexity into business strategy. The earlier you engage them, the better.
“If you just approach payments generically — ‘our competitors are doing it, so we need to do it’ — you’re not really adding value. Think about what workflows your customers are doing and how payments can improve their experience.”
Ash Forsythe
General Manager, Payments & Patient Collaboration, ModMed
Many vertical software companies come to embedded payments the same way: a competitor launches it, so they do too. That's a product decision, not a commercial one. And it's where commercial readiness problems can start.
Building that depth of understanding across leadership and the broader team takes deliberate investment. The platforms that get it right treat payments expertise as a core competency, not a vendor relationship.
But you don't have to build that expertise alone. Your payments technology partner is a critical resource for translating complexity into business strategy. The earlier you engage them, the better.
40%
Up to 40% of new SMBs that sign up never fully activate embedded payments
Source: Adyen customer data
Adoption is the real challenge
40%
Up to 40% of new SMBs that sign up never fully activate embedded payments
Source: Adyen customer data
Adoption is the real challenge
40%
Up to 40% of new SMBs that sign up never fully activate embedded payments
Source: Adyen customer data
Adoption is the real challenge
40%
Up to 40% of new SMBs that sign up never fully activate embedded payments
Source: Adyen customer data
Adoption is the real challenge
2.1
Make payments everyone’s business
Payments touch more of the business than most platforms expect: pricing, credit risk, compliance, reconciliation, customer support, and multi-site reporting all have a payments dimension. Rather than a single team's responsibility, it requires repeatable workflows and cross-functional coordination.
Four functions make that coordination possible: leadership, sales, marketing, and operations. Building payments knowledge deliberately across all four is what separates platforms that launch embedded payments from platforms that scale it.
2.1
Make payments everyone’s business
Payments touch more of the business than most platforms expect: pricing, credit risk, compliance, reconciliation, customer support, and multi-site reporting all have a payments dimension. Rather than a single team's responsibility, it requires repeatable workflows and cross-functional coordination.
Four functions make that coordination possible: leadership, sales, marketing, and operations. Building payments knowledge deliberately across all four is what separates platforms that launch embedded payments from platforms that scale it.
2.1
Make payments everyone’s business
Payments touch more of the business than most platforms expect: pricing, credit risk, compliance, reconciliation, customer support, and multi-site reporting all have a payments dimension. Rather than a single team's responsibility, it requires repeatable workflows and cross-functional coordination.
Four functions make that coordination possible: leadership, sales, marketing, and operations. Building payments knowledge deliberately across all four is what separates platforms that launch embedded payments from platforms that scale it.
2.1
Make payments everyone’s business
Payments touch more of the business than most platforms expect: pricing, credit risk, compliance, reconciliation, customer support, and multi-site reporting all have a payments dimension. Rather than a single team's responsibility, it requires repeatable workflows and cross-functional coordination.
Four functions make that coordination possible: leadership, sales, marketing, and operations. Building payments knowledge deliberately across all four is what separates platforms that launch embedded payments from platforms that scale it.
Assign clear ownership across every payments function
Assign clear ownership across every payments function
action step
Leadership
Accountable for success
Hire a consultant or fractional head of payments
Best for early-stage. An experienced operator surfaces nonobvious SMB pain points and drives product-market fit.
Or hire a full-time head of payments
The right move for long-term growth.
Leadership
Accountable for success
Hire a consultant or fractional head of payments
Best for early-stage. An experienced operator surfaces nonobvious SMB pain points and drives product-market fit.
Or hire a full-time head of payments
The right move for long-term growth.
Leadership
Accountable for success
Hire a consultant or fractional head of payments
Best for early-stage. An experienced operator surfaces nonobvious SMB pain points and drives product-market fit.
Or hire a full-time head of payments
The right move for long-term growth.
Sales
Accountable for growth
Build a payments overlay team
General sales sells the full solution with payments as default; specialists handle complex questions and upsell existing customers. Once proven, the overlay team reintegrates into the broader org.
Or pursue a product-led growth model
A dedicated payments product manager or growth specialist builds the funnel without a dedicated sales layer.
Sales
Accountable for growth
Build a payments overlay team
General sales sells the full solution with payments as default; specialists handle complex questions and upsell existing customers. Once proven, the overlay team reintegrates into the broader org.
Or pursue a product-led growth model
A dedicated payments product manager or growth specialist builds the funnel without a dedicated sales layer.
Sales
Accountable for growth
Build a payments overlay team
General sales sells the full solution with payments as default; specialists handle complex questions and upsell existing customers. Once proven, the overlay team reintegrates into the broader org.
Or pursue a product-led growth model
A dedicated payments product manager or growth specialist builds the funnel without a dedicated sales layer.
Marketing
Accountable for awareness
Owns vertical-specific campaigns and content
so the value case is made long before sales conversations start.
Manages the proof points
case studies, ROI calculators, one pagers, etc. that support the full funnel.
Marketing
Accountable for awareness
Owns vertical-specific campaigns and content
so the value case is made long before sales conversations start.
Manages the proof points
case studies, ROI calculators, one pagers, etc. that support the full funnel.
Marketing
Accountable for awareness
Owns vertical-specific campaigns and content
so the value case is made long before sales conversations start.
Manages the proof points
case studies, ROI calculators, one pagers, etc. that support the full funnel.
Operations
Accountable for retention
Customer success managers
Own the relationship between activation and long-term payments adoption, converting early users into committed customers.
Customer support roles
Equipped to resolve the majority of payments-related inquiries directly, without escalation.
Operations
Accountable for retention
Customer success managers
Own the relationship between activation and long-term payments adoption, converting early users into committed customers.
Customer support roles
Equipped to resolve the majority of payments-related inquiries directly, without escalation.
Operations
Accountable for retention
Customer success managers
Own the relationship between activation and long-term payments adoption, converting early users into committed customers.
Customer support roles
Equipped to resolve the majority of payments-related inquiries directly, without escalation.
Getting this right has a direct line to revenue.
Getting this right has a direct line to revenue.
Platforms that invest in payments expertise across these functions reduce churn and build customer relationships that grow.
2.2
Treat onboarding like a revenue function
Onboarding for embedded payments isn't the same as onboarding for software. A new customer signing up for your platform might be comfortable with your core product in a matter of days, but payments introduces a different kind of complexity. KYC requirements, terminal configuration, compliance steps, and payment method setup all create friction points that standard software onboarding isn't built to address.
That friction has consequences. Customers who don't activate payments in the early stages rarely come back to it. The window between signup and first transaction is short, and what happens in that window determines whether embedded payments become a core part of how they run their business or a feature they never use.
The upside of getting this right is significant. When customers activate billing as part of onboarding, our research shows retention nearly doubles compared to those on software alone. It makes onboarding a revenue function, not just an operational one.
2.2
Treat onboarding like a revenue function
Onboarding for embedded payments isn't the same as onboarding for software. A new customer signing up for your platform might be comfortable with your core product in a matter of days, but payments introduces a different kind of complexity. KYC requirements, terminal configuration, compliance steps, and payment method setup all create friction points that standard software onboarding isn't built to address.
That friction has consequences. Customers who don't activate payments in the early stages rarely come back to it. The window between signup and first transaction is short, and what happens in that window determines whether embedded payments become a core part of how they run their business or a feature they never use.
The upside of getting this right is significant. When customers activate billing as part of onboarding, our research shows retention nearly doubles compared to those on software alone. It makes onboarding a revenue function, not just an operational one.
2.2
Treat onboarding like a revenue function
Onboarding for embedded payments isn't the same as onboarding for software. A new customer signing up for your platform might be comfortable with your core product in a matter of days, but payments introduces a different kind of complexity. KYC requirements, terminal configuration, compliance steps, and payment method setup all create friction points that standard software onboarding isn't built to address.
That friction has consequences. Customers who don't activate payments in the early stages rarely come back to it. The window between signup and first transaction is short, and what happens in that window determines whether embedded payments become a core part of how they run their business or a feature they never use.
The upside of getting this right is significant. When customers activate billing as part of onboarding, our research shows retention nearly doubles compared to those on software alone. It makes onboarding a revenue function, not just an operational one.
2.2
Treat onboarding like a revenue function
Onboarding for embedded payments isn't the same as onboarding for software. A new customer signing up for your platform might be comfortable with your core product in a matter of days, but payments introduces a different kind of complexity. KYC requirements, terminal configuration, compliance steps, and payment method setup all create friction points that standard software onboarding isn't built to address.
That friction has consequences. Customers who don't activate payments in the early stages rarely come back to it. The window between signup and first transaction is short, and what happens in that window determines whether embedded payments become a core part of how they run their business or a feature they never use.
The upside of getting this right is significant. When customers activate billing as part of onboarding, our research shows retention nearly doubles compared to those on software alone. It makes onboarding a revenue function, not just an operational one.
Close the gap between signup and first transaction
Close the gap between signup and first transaction
action step
Tailor the process
Different customer segments have different activation needs. A one-size-fits-all onboarding flow creates friction where none needs to exist.
SMBs using terminals rarely need employee training on online payment flows, and vice versa.
Educate on KYC
KYC is where onboarding often stalls. Customers who understand what to expect move through it faster and with less support overhead.
Walk customers through KYC requirements before submission. It reduces delays and drop-off.
Set clear goals
Activation looks different by vertical. Define it upfront so everyone knows what success looks like.
First transaction or first 50, SMBs and internal teams know their goal before onboarding starts.
Incentivise adoption
Activation takes time. The right incentive can be the difference between a customer who tries payments and one who commits to it.
Consider free processing periods for new activations, or usage-based fee structures that reward early engagement.
Invest in ops and risk
Onboarding challenges vary significantly by customer segment. Early intervention catches issues before they become churn.
Onboarding calls and webinars help identify friction quickly, improve the experience, and flag bad actors.
Tailor the process
Different customer segments have different activation needs. A one-size-fits-all onboarding flow creates friction where none needs to exist.
SMBs using terminals rarely need employee training on online payment flows, and vice versa.
Educate on KYC
KYC is where onboarding often stalls. Customers who understand what to expect move through it faster and with less support overhead.
Walk customers through KYC requirements before submission. It reduces delays and drop-off.
Set clear goals
Activation looks different by vertical. Define it upfront so everyone knows what success looks like.
First transaction or first 50, SMBs and internal teams know their goal before onboarding starts.
Incentivise adoption
Activation takes time. The right incentive can be the difference between a customer who tries payments and one who commits to it.
Consider free processing periods for new activations, or usage-based fee structures that reward early engagement.
Invest in ops and risk
Onboarding challenges vary significantly by customer segment. Early intervention catches issues before they become churn.
Onboarding calls and webinars help identify friction quickly, improve the experience, and flag bad actors.
Tailor the process
Different customer segments have different activation needs. A one-size-fits-all onboarding flow creates friction where none needs to exist.
SMBs using terminals rarely need employee training on online payment flows, and vice versa.
Educate on KYC
KYC is where onboarding often stalls. Customers who understand what to expect move through it faster and with less support overhead.
Walk customers through KYC requirements before submission. It reduces delays and drop-off.
Set clear goals
Activation looks different by vertical. Define it upfront so everyone knows what success looks like.
First transaction or first 50, SMBs and internal teams know their goal before onboarding starts.
Incentivise adoption
Activation takes time. The right incentive can be the difference between a customer who tries payments and one who commits to it.
Consider free processing periods for new activations, or usage-based fee structures that reward early engagement.
Invest in ops and risk
Onboarding challenges vary significantly by customer segment. Early intervention catches issues before they become churn.
Onboarding calls and webinars help identify friction quickly, improve the experience, and flag bad actors.
Tailor the process
Different customer segments have different activation needs. A one-size-fits-all onboarding flow creates friction where none needs to exist.
SMBs using terminals rarely need employee training on online payment flows, and vice versa.
Educate on KYC
KYC is where onboarding often stalls. Customers who understand what to expect move through it faster and with less support overhead.
Walk customers through KYC requirements before submission. It reduces delays and drop-off.
Set clear goals
Activation looks different by vertical. Define it upfront so everyone knows what success looks like.
First transaction or first 50, SMBs and internal teams know their goal before onboarding starts.
Incentivize adoption
Activation takes time. The right incentive can be the difference between a customer who tries payments and one who commits to it.
Consider free processing periods for new activations, or usage-based fee structures that reward early engagement.
Invest in ops and risk
Onboarding challenges vary significantly by customer segment. Early intervention catches issues before they become churn.
Onboarding calls and webinars help identify friction quickly, improve the experience, and flag bad actors.
“Our pricing model is designed to align with restaurant success: a base SaaS fee plus a payments component that grows with their business. The more solutions they adopt, the more competitive their overall bundle becomes. It’s not just about cost, it’s about making sure every restaurant that uses Toast is better off than they would be without it.”
Michel Rbeiz
General Manager, FinTech, Toast
“Our pricing model is designed to align with restaurant success: a base SaaS fee plus a payments component that grows with their business. The more solutions they adopt, the more competitive their overall bundle becomes. It’s not just about cost, it’s about making sure every restaurant that uses Toast is better off than they would be without it.”
Michel Rbeiz
General Manager, FinTech, Toast
“Our pricing model is designed to align with restaurant success: a base SaaS fee plus a payments component that grows with their business. The more solutions they adopt, the more competitive their overall bundle becomes. It’s not just about cost, it’s about making sure every restaurant that uses Toast is better off than they would be without it.”
Michel Rbeiz
General Manager, FinTech, Toast
“Our pricing model is designed to align with restaurant success: a base SaaS fee plus a payments component that grows with their business. The more solutions they adopt, the more competitive their overall bundle becomes. It’s not just about cost, it’s about making sure every restaurant that uses Toast is better off than they would be without it.”
Michel Rbeiz
General Manager, FinTech, Toast
2.3
Margin is a lever, not a fixed rate
Growing payment volume is only half the equation. The other half is margin—and most platforms leave significant profitability on the table by treating take rate as a fixed variable rather than an active lever.
Smart payment routing is one of the most direct tools available. Directing high-value transactions to lower-cost methods like US debit reduces scheme and interchange fees without changing the customer experience. The same logic applies to payment methods, card schemes, and acquiring strategy. Each is a decision point with a measurable impact on margin.
Profitability at scale also requires managing the cost of serving SMBs. High acquisition and support costs can erode margin on otherwise healthy payment volume. Platforms that grow sustainably are deliberate about which customers they prioritise, and invest in self-serve resources that reduce support overhead as volume grows.
2.3
Margin is a lever, not a fixed rate
Growing payment volume is only half the equation. The other half is margin—and most platforms leave significant profitability on the table by treating take rate as a fixed variable rather than an active lever.
Smart payment routing is one of the most direct tools available. Directing high-value transactions to lower-cost methods like US debit reduces scheme and interchange fees without changing the customer experience. The same logic applies to payment methods, card schemes, and acquiring strategy. Each is a decision point with a measurable impact on margin.
Profitability at scale also requires managing the cost of serving SMBs. High acquisition and support costs can erode margin on otherwise healthy payment volume. Platforms that grow sustainably are deliberate about which customers they prioritise, and invest in self-serve resources that reduce support overhead as volume grows.
2.3
Margin is a lever, not a fixed rate
Growing payment volume is only half the equation. The other half is margin—and most platforms leave significant profitability on the table by treating take rate as a fixed variable rather than an active lever.
Smart payment routing is one of the most direct tools available. Directing high-value transactions to lower-cost methods like US debit reduces scheme and interchange fees without changing the customer experience. The same logic applies to payment methods, card schemes, and acquiring strategy. Each is a decision point with a measurable impact on margin.
Profitability at scale also requires managing the cost of serving SMBs. High acquisition and support costs can erode margin on otherwise healthy payment volume. Platforms that grow sustainably are deliberate about which customers they prioritise, and invest in self-serve resources that reduce support overhead as volume grows.
2.3
Margin is a lever, not a fixed rate
Growing payment volume is only half the equation. The other half is margin—and most platforms leave significant profitability on the table by treating take rate as a fixed variable rather than an active lever.
Smart payment routing is one of the most direct tools available. Directing high-value transactions to lower-cost methods like US debit reduces scheme and interchange fees without changing the customer experience. The same logic applies to payment methods, card schemes, and acquiring strategy. Each is a decision point with a measurable impact on margin.
Profitability at scale also requires managing the cost of serving SMBs. High acquisition and support costs can erode margin on otherwise healthy payment volume. Platforms that grow sustainably are deliberate about which customers they prioritise, and invest in self-serve resources that reduce support overhead as volume grows.
Know your four margin levers
Know your four margin levers
action step
Take rate
How to reduce interchange and scheme fees through local acquiring, payment routing, payment method mix, and card scheme strategy
Improved margins
Take rate
How to reduce interchange and scheme fees through local acquiring, payment routing, payment method mix, and card scheme strategy
Improved margins
Take rate
How to reduce interchange and scheme fees through local acquiring, payment routing, payment method mix, and card scheme strategy
Improved margins
Conversions and fraud
How to balance risk and revenue through network tokens, chargeback management, and false positive decline recovery
Higher authorisation rates and lower fraud costs
Conversions and fraud
How to balance risk and revenue through network tokens, chargeback management, and false positive decline recovery
Higher authorisation rates and lower fraud costs
Conversions and fraud
How to balance risk and revenue through network tokens, chargeback management, and false positive decline recovery
Higher authorisation rates and lower fraud costs
Cost to serve
How to scale SMB acquisition and support through segment prioritisation, self-serve resources, automated onboarding workflows, and support tiers
Lower acquisition and support costs
Cost to serve
How to scale SMB acquisition and support through segment prioritisation, self-serve resources, automated onboarding workflows, and support tiers
Lower acquisition and support costs
Cost to serve
How to scale SMB acquisition and support through segment prioritisation, self-serve resources, automated onboarding workflows, and support tiers
Lower acquisition and support costs
Operational efficiency
How to reduce complexity through automated reconciliation, technology integration, and developer documentation
Reduced operational overhead
Operational efficiency
How to reduce complexity through automated reconciliation, technology integration, and developer documentation
Reduced operational overhead
Operational efficiency
How to reduce complexity through automated reconciliation, technology integration, and developer documentation
Reduced operational overhead