Building Embedded Payments Right with Alex Schoonkind from Embed

Embedded payments sounds simple: integrate a provider, monetize transactions, watch revenue grow. But the reality is far more nuanced.

In this episode, I sit down with Alex Schoonkind, Cofounder and CEO of Embed, to unpack what it really takes to successfully embed payments into your vertical SaaS platform.

Alex shares hard-earned insights from working with dozens of platforms, revealing the common misconceptions that hold companies back, the timing considerations most founders get wrong, and why thinking like a financial services company is non-negotiable before you start.

Key Takeaways:

• The two misconceptions: companies either think embedded payments is incredibly easy, or they're scared of appearing like a bank (both are leaving money on the table)
• The critical question every founder must answer: "Do you see a future of yourself as a financial services company?"
• Timing matters: you need 20-50M EUR in yearly transaction volume (roughly 2-2.5M monthly) to make embedded payments worthwhile
• Payments is "an operational product with a revenue hat"; don't underestimate the complexity or overestimate it
• Support overhead reality: only 1-2% of customers reach out with payment questions, and high volume means revenue to hire support
• Why industries like healthtech and proptech are missing opportunities by thinking payments are too far from their core business
• Flexible pricing models and settlement streams matter more than vanilla solutions for vertical SaaS
• Alex's prediction: generic payment providers will disappear as SMBs increasingly run on software that embeds financial services

Connect with Alex on LinkedIn: https://www.linkedin.com/in/alexschoonkind/

About Embedded Finance Review: Weekly newsletters, bi-weekly podcasts, and industry events exploring embedded finance in Europe. Visit embeddedfinancereview.com

This episode was produced by Orama.tv.

(00:00) Start(01:39) Introduction and Greetings(01:51) Diving into Embedded Payments(02:20 Common Misconceptions in Embedded Payments(03:29) Challenges and Opportunities in Vertical SaaS(06:52) Timing and Monetization Strategies(12:10) Customer Journey and Integration Timelines(21:12) Exploring Preferred Industries for Embedded Payments(21:19) The Appeal of Legacy Industries(21:37) Challenges and Opportunities in Legacy Companies(23:09) Pricing Strategies for Embedded Payments(24:29) The Complexity of Payment Pricing(28:36) The Evolution of SaaS Companies with Embedded Payments(31:36) Transitioning to Embedded Payments(32:03) The European Market for Embedded Payments(33:35) Building a Company Focused on Vertical SaaS(36:26) Competing with Industry Giants(37:15) Tailoring Payment Solutions for Specific Needs(38:42) Final Thoughts and Advice for CEOs