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Why Every SaaS Business Will Become a Fintech Company (Whether They Like It or Not)

Author

Chintankumar Maisuria
March 24, 2025

Read time: 3 minutes.

Welcome to the 104th edition of The Growth Elements Newsletter. Every Monday and sometimes on Thursday, I write an essay on growth metrics & experiments and business case studies.

Today’s piece is for 7,000+ founders, operators, and leaders from businesses such as Shopify, Google, Razorpay, Hubspot, Browserstack, Zoho, Freshworks, Darwinbox, Servcorp, Zomato, Postman and Swiggy.

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The next evolution of SaaS is not more features, better UI, or improved automation. It’s financial services.

SaaS companies increasingly embed payments, lending, banking, and financial infrastructure into their products. What started as simple payment integrations has evolved into full-fledged fintech ecosystems.

Why? Because owning financial transactions drives higher margins, deeper customer lock-in, and new revenue streams.

SaaS companies will not just sell software; they will monetize financial flows.

How SaaS Companies Are Becoming Fintech Players

[1] Embedded Payments: The Gateway to Fintech Revenue

The fastest way for a SaaS company to enter fintech is by owning payments.

  • Instead of relying on Stripe or PayPal, SaaS companies have become payment processors (e.g. Shopify Payments and Toast Payments).

  • SaaS businesses charge transaction fees instead of just a flat monthly fee.

  • This shifts revenue from subscription-based to transaction-based models, increasing LTV.

Company

SaaS Model

Fintech Expansion

Shopify

E-commerce platform

Shopify Payments, Shopify Capital

Toast

Restaurant SaaS

Toast Payments, Lending

Mindbody

Fitness & wellness SaaS

Integrated POS, financial tools

Key Insight: SaaS businesses that control payment infrastructure increase retention, margins, and revenue per customer.

[2] Lending & Credit: Monetizing Cash Flow Gaps

The next layer after payments is lending.

  • SaaS platforms have customer transaction data, allowing them to predict creditworthiness better than banks.

  • SaaS companies can directly offer working capital loans and revenue-based financing on their platforms.

  • Shopify Capital, Square Capital, and Stripe Capital are already issuing billions in loans.

Why This Works

SaaS companies own transaction data → better credit models

Loans drive customer retention → deeper integration into the business

High-margin revenue → fintech margins often exceed SaaS margins

Key Insight: Lending is not just a service, it is a retention tool that keeps businesses within the SaaS ecosystem.

[3] Banking as a Feature: The Rise of Vertical Fintech

Instead of just offering software, leading SaaS companies are adding banking services.

  • Payroll SaaS → Becomes a neobank (ex: Gusto offering Gusto Wallet)

  • Freelancer SaaS → Offers business accounts (ex: Fiverr offering Fiverr Business Accounts)

  • HR SaaS → Provides salary advances (ex: Rippling integrating employee financial tools)

Company

Fintech Expansion

Gusto

Gusto Wallet for payroll & banking

Fiverr

Business bank accounts for freelancers

Rippling

Payroll + embedded financial services

Key Insight: The line between SaaS and fintech is disappearing. If you serve a niche market, you will need to offer financial services.

The Economics: Why Fintech Margins Are Better Than SaaS

SaaS is high-margin, but fintech is even better.

Revenue Type

Margins

SaaS Subscriptions

70-80%

Payments Revenue

80-90%

Lending & Credit

60-80% (but high volume)

  • Subscription SaaS revenue is predictable but capped.

  • Fintech revenue scales with transaction volume, making it uncapped.

  • Blended models (SaaS + fintech) drive both predictable ARR and transaction-based revenue.

Key Insight: SaaS companies that expand into fintech diversify revenue streams and increase profitability.

The Future: Every SaaS Company Will Monetize Financial Transactions

In my opinion, the majority of SaaS companies will either:

  1. Integrate fintech into their core offering (embedded finance, payments, lending, banking-as-a-service) or

  2. Be outcompeted by a SaaS company that does.

What SaaS Founders Should Do Now:

  • Analyze your customers’ financial pain points: where are they struggling with payments, cash flow, or credit?

  • Explore fintech partnerships: integrate payments/lending now before competitors do.

  • Shift from software-only to a fintech-powered business model.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria