Perspectives on Embedded Payments for Vertical SaaS: An Interview with Finix

Finix?is a payment infrastructure platform that gives businesses an alternate way to own, manage, and monetize their entire payments experience without the headaches or expenses associated with building an in-house system from scratch.

We spoke with Finix leadership about the benefits of white label payfacs, comparisons of different fintech products, and the engineering requirements for implementing a white label payments product.

Why are white-label payments solutions preferable to alternatives?

Finix: White-labeled payment solutions like Finix allow SaaS companies to underwrite and manage merchants directly. Owning the relationship improves the merchant product experience, decreases merchant confusion, and preserves your brand in the minds of your customers. With managed solutions (e.g., Stripe Connect Standard), you give up control over the merchant experience since they have to go through the underwriting process outside of your platform.

Can you describe the engineering process required to implement an API-enabled white-label payments solution?

There are generally four main steps in the integration process for platform payments:

1. Gateway integration: This allows you to securely capture and transmit payment card information from a mobile app, website, or point-of-sale device.
2. Merchant onboarding: This allows you to safely accept sensitive information (e.g. name, address, tax ID number) needed to underwrite and onboard a merchant. Again, this can be captured from a mobile app or website.
3. Merchant management: This allows you to establish rules for each merchant (or a group of merchants), such as the fees they will pay to you as a platform for each transaction.
4. Creating a sale: This allows you to actually pull money from a buyer’s card and designate those funds to a merchant (while taking your cut).

Whether you are already processing a million transactions, or yet to process your first, Finix provides the technical infrastructure you need to make adding payments as seamless as possible. Customers who need additional technical support can also leverage Finix’s unique ‘Dev Partner Program’ to tap into our certified dev partners who can help expedite any integration or technical steps to help customers get to revenue.

How does a payments solution compare to alternative fintech products for SaaS companies?

Starting with payments is often the logical choice as it provides insights into a business’s finances, including cash flow from credit card sales — all of which are prerequisites to other financial services such as lending. We expect that most companies will, over time, consider adding more than one embedded fintech product, but the sequence will depend largely on your vertical and your customers’ needs. For example, businesses that require a lot of working capital may decide to add lending to their payments offering, whereas if your customers need the ability to manage stored wallets or facilitate faster access to earned wages, issuing a card might make more sense.

What kind of compliance burden is there for companies that build an embedded payments product?

Being in the money movement space means navigating compliance requirements as part of ensuring good behavior and best practices by all stakeholders. The reason many companies choose to work with Finix is that we abstract away most of the compliance burden from our customers, allowing them to focus on their core business and what they do best.

To learn more about how payments and other embedded fintech products enable vertical SaaS, check out our new?Fintech Playbook?released this week.