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Leaders In Payments
Leaders In Payments
THE SIGNAL: SaaS is Dead, Long Live SaaS + Payments | Episode 453
Subscriptions aren’t enough anymore. We dig into why the next wave of software winners are building full commerce platforms where payments are invisible to users yet central to growth. With NMI’s CMO Peter Galvin and Product Director of Developer Experience, Luis Peña, we unpack how vertical SaaS turns checkout into a native, on-brand experience that drives revenue, cuts churn, and opens the door to embedded finance.
We start with the big shift: horizontal tools are giving way to vertical platforms that automate every workflow and own the moment of payment. From dentist offices to gyms and home services, merchants want one system that books, bills, and gets them paid. Peter explains how integrated payments changes the business model - subscription fees plus payments monetization and new fintech lines like working capital - while strengthening loyalty through a consistent, secure merchant and consumer experience.
Luis takes us into the build. He shares a practical roadmap for developer-friendly adoption: onboard merchants within your app, collect card data with tokenization and design for webhooks, and exception paths from day one. We talk sandboxes, test suites that simulate real failure modes, and AI-friendly docs that make it easier for modern teams to ship quickly without cutting corners. Then we zoom out to the data advantage - interchange optimization, card mix insights, network tokenization, and benchmarking that inform pricing, conversion, and cross-sell strategies.
The takeaway is simple: treat payments as a growth engine, not a bolt-on. When software controls the workflow and the commerce flow, the product becomes stickier, the economics improve, and customers stop thinking about payments at all.
Hello and welcome to the Leaders in Payments Podcast. I'm your host, Greg Myers. Joining me today are two very special guests from NMI, Peter Galvin, the Chief Marketing Officer, and Luis Peña, the product director of developer experience. So thank you both for being here and welcome to the show.
SPEAKER_00:Thank you.
SPEAKER_02:So this episode is part of our Signal series where we are cutting through the noise to reveal what truly matters in payments in FinTech. Today we're recording part one of a two-part series focused on SaaS payments. The title of today's episode is SaaS is Dead, Long Live SaaS Plus Payments, a bold statement that we will be unpacking today. As the subscription-only SaaS model starts fading, today's winners are building integrated commerce platforms where payments drive revenue, loyalty, and expansion. We will be exploring how SaaS is being redefined by payments and what it means for the next generation of software companies. So, Peter, Luis, before we deep dive deep into this, Peter, do you mind first can you walk us through your professional journey and how you got to NMI?
SPEAKER_00:Sure, I'm happy to. Thank you very much. So, yeah, I uh I started out as a product manager actually. I was um I was very interested in computer technology. And uh after graduate school, I decided I wanted to go and become a product manager and very interesting at that time where you really owned all components of the product from you know really being uh the figuring out the specifications to going all the way to go to market. And product management has kind of changed and expanded over that time into other areas like product marketing, um, for example, and and other disciplines. Um, and through that journey, I was always interested in uh love technology. Um, and then if you kind of fast forward um and look at where I ended up, um one of the one of the big shifts that I did see was in um software as a service. So going from client service to software as a service and um went to work for a company called Proofpoint, which was one of the early um SaaS companies for email security. And they were making that transition from being a you know a software company that sold software to a subscription-based SaaS company. So those changes were quite interesting and exciting. And so ever since then, I was always in uh security and in the security marketplace as a chief marketing officer, um working with uh a few different types of SaaS organizations, mostly in the security space. And then um one of the last companies I was with, uh, a company called TALAS, did a lot of work with uh banks and credit card companies and provided encryption services uh to those types of uh types of companies, which led me to NMI and to get more formalized into payments. So instead of being in the middle of the infrastructure for um what I would consider you know banking and and finding fintech, uh I got more into the infrastructure for providing embedded finance for SaaS companies. So it seemed uh for me it's a good fit for both SaaS and for uh the underlying uh technology and also uh something new that uh SaaS companies are trying to achieve.
SPEAKER_02:Okay. Louis, same question for you, a little about your professional journey and how you got to NMI.
SPEAKER_01:Thanks, Rick. Um yeah, so um I fell in love with software actually when I was eight. I wrote my first line of code way back then on uh uh old IBM machine, no hard drives, uh, dating myself a little bit here. Um, but I just loved software and fell in love with software way back then. So um I went to undergrad uh here in Orange County in California. I went to UC Irvine uh for computer science and then I followed up with uh my graduate studies there in business. Um while I was in Orange County, I worked for 15 years in the residential construction uh industry focused on low voltage construction, um a lot of fire alarm, home security. Um, and there I was able to automate a lot of our software and our processes. There was a lot of manual things happening, a lot of fax machines, a lot of paperwork that was very manual. So uh still able to build software for uh an industry that really needed it. Um, but then was also exposed to a lot of um, you know, SaaS recurring revenue, especially with alarm and uh the reseller white label branding model, which is very prevalent in the the home security realm as well. So um after my 15 years there, I decided to double down in in software, uh came to NMI about 10 years ago now, joined uh via one of their gateways, um, and spent nine years in engineering here at NMI, uh building on a number of our solutions and just finishing up my first year in product management.
SPEAKER_02:Okay, great. So, Peter, can you give our audience just a quick overview, high-level overview of what NMI does?
SPEAKER_00:Sure. NMI is a payments acceptance platform. So we help um our partners, and those partners are could be independent sales organizations, fintechs, payment professionals, and especially software and SaaS companies uh provide payment infrastructure for their clients or their merchants. And so today we have over uh 4,000 partners that we work with and over a million merchants that um use our platform to be able to take a credit card payment either uh directly through some kind of point of sale system or embedded into uh software. And so that is truly what the company is able to do. We do that as a white white label service, which is very unique in the marketplace. We also don't go direct to merchants, we only go through these uh these partner channels that we've developed over time, who basically build a solution around our product offering and then deliver that solution to um their merchants um and work directly with their merchants.
SPEAKER_02:Okay. So, Peter, sticking with you, and we've talked about this. So the subscription-only SaaS model is fading and payments are becoming really a core growth engine for them. So, what's fundamentally changing about how modern SaaS platforms create and capture value?
SPEAKER_00:Yeah, I think the challenge that you know SaaS platforms have always had is that um they always had to pick one thing to be able to generate revenue from. So, you know, it could be a seat model, it could be a full enterprise model. And um, they were really limited in the way that they could deliver value. I think the also the other change that we're seeing is we used to see a lot of very horizontal platforms that required a lot of integration for different organizations to be able to integrate those platforms into their um larger enterprises. And what's kind of exciting for us is that NMI also, one of the things that we do is we really specialize and focus on small and medium-sized businesses and those partners and software companies that are um um providing them services. And so, what one of the big changes that's happened in SaaS over the last few years is you've really seen this move to what we call vertical SaaS and vertical SaaS platforms. So when you think about a vertical SaaS platform, you know, you have a SaaS provider who is providing um, you know, medical software, for example, to a doctor's office or dental software, or could be a pet vet or for a hair salon or for um dog boarding. So there's a number of different new smaller vertical software companies that are coming um into the business. And and really what those software companies have in common is they're really trying to help automate all of these different processes, which would be manual. So if you think of the old days of like just a plumber, for example, you know, you'd have to call, make an appointment, you know, somebody would finally show up at your house between eight and five, they deliver you an invoice, um, maybe they get paid five, you know, paid by a check, you know, 30 days later. Um, what these vertical software companies have done is do this all this automation. And that's something, you know, that um Luis was talking about in when in his earlier experiences was really automating that process. So they've really digitally transformed these businesses that um are needed for these small and medium-sized businesses. And they start usually with a subscription model that allows them to provide some set of services. But what they found over time is in any of those businesses, those vertical B2B services, their consumers also want to pay. And so one of the benefits that we provide is being able to embed those services into their SaaS offering. And the other part is that by being able to provide that service for that doctor, for example, to take a payment through their that software system, that SaaS company can also participate in the interchange and in some of the revenue that is created through that. So not only are they making money through their SaaS subscription model, but they're also able to find additional um revenue streams through interchange. We're also seeing that one of the challenges with small and medium-sized businesses is that their their ability to access working capital. And usually if you think of this, that this is just one example, but a lot of times when they're trying to access working capital, there's, you know, they can either go to their bank, which could take 30 or 60 days or even longer, and usually will be denied. Um, they may have to put up some serious collateral, like a house, for example. Or um they go and they many times just use their corporate credit card, and the interest rates on those can be, you know, 20, 25%. Um, one of the great things about you know this industry is because now these um now from an infrastructure standpoint, you can see all of the transactions that are occurring over the credit card. You can now um provide loans that are very specific to that um that individual merchant and provide you know a much better uh loan, uh better payment terms. Payment terms are based on the streams of revenue that they're getting from that um from the that the um that's coming through the credit card payments. And so that you know, there's additional financial services offerings that can be offered to um these uh their these clients or merchants through these SaaS companies from companies like ourselves. And so not only is there a subscription model and an interchange model, but there's also other fintech models that um allow the SaaS company to become more of a financial expert for their uh for their merchants or their clients.
SPEAKER_02:Okay, great. So, Luis, over to you as SaaS companies shift toward this payments-driven model. What are the biggest developer considerations that they need to be thinking about sort of earlier in the process?
SPEAKER_01:Yeah, so uh being that SaaS companies tend not to be payments experts, they they really kind of need to understand the lay of the land from their their processes, right? They need to understand that the partner they're choosing matches the way that they're developing software themselves. So um also they need to consider the ways that the uh platform will be able to integrate into that which they've built, um, and what parts of the journeys they need to maybe consume earlier, later, and then maybe like eventually. There's there's an amount of effort related to each piece of payments that you integrate into your software. So being able to take those independently and match them to your own product roadmap. So, for example, um, you need to look at whether or not you have no code components or low-code components. Um, for certain sections that maybe are not high frequency, you maybe do very infrequently. Maybe if you're boarding merchants on your software, you do that one time. That's not a feature you need to build out in its entirety right from the beginning. But if payment acceptance and actually processing recurring payments is something that is core to your software, that's something you might want to integrate more tightly. So finding a partner who has those options to be able to go as deep or as shallow as you want in each of the services you need to bring into your software is gonna be very important. That way you can match your build timeline with your needs as you uh continue in your payments journey and gain your own experience as a software developer with the way that payments can actually help bring value to your organization. So um additionally, you got to make sure that you're picking someone who can, like I said, make software the same way that you're developing. So if you're using AI tools, if you're using agents, um, making sure that those agents understand how to integrate that platform and that it's it's keeping up with the way that you are integrating is is really important to make sure that you're not finding hurdles or impediments that you would have been able to discover early on in the process.
SPEAKER_02:Okay. Louis, sticking with you, when a SaaS platform evolves into this more full commerce platform, what integration patterns or technical building blocks really become essential for supporting that when they want to scale their business?
SPEAKER_01:Yeah. So as again, they're not necessarily payment experts. They need to think about their software and how they're incorporating the new journeys for their merchants into it. So, um, for example, you need to think about merchant onboarding, how they're applying for these accounts. Um, you need to make sure that you have a way for them to do that during your own onboarding process, to be able to have this additional step that's in there. Um, when you're bringing in payment acceptance to be able to have a way to securely get that card data, not on your own system, so that you can stay out of scope from a PCI and a compliance standpoint. Um and then be able to manage those merchants, chargebacks and all of the different things that come with the ongoing support. So these are the areas you need to make sure you have built into the process. How deep you go depends on your software. Um, additionally, uh when you're thinking about maintaining your own brand for the software that you've built, you need to be able to bring in these components in a way that matches your design system. So if if you can apply your design system across that which you are consuming in a very ubiquitous way, um, it'll help reduce your development time and it it sets up your platform for a way to keep consuming the additional payments products that come in over time. Um, to be a little bit more technical, you need to make sure that you can handle uh you know webhooks and receiving them and get the information back from statuses as to the way that the payments journey may occur. If you're doing ACH, things may not be as real time as you might say be in a credit card world. So you need to make sure that you're handling all those different scenarios and making sure that you're not just building for the happy case, but for all of the exceptions that are out there too. And that's where having a partner that can walk you through that which you don't know, not being a payments expert, is gonna be really key because we've we've seen it time and time again where people will think that payments is really straightforward and it can be with the right partner, but if you're missing some essential steps, you'll you'll be missing uh a really important customer journey that's only gonna let your customers down in the end.
SPEAKER_02:Okay. So, Peter, back over to you. NMI works with a wide range of ISVs and vertical SaaS platforms as we've been talking about. What separates the software companies that successfully embrace payments against those that maybe struggle to really embrace payments?
SPEAKER_00:Well, I think that I think the most important thing that the ISVs or SaaS companies have have to think about is really the merchant experience. So the client experience is key. And so back to kind of Lewis's point where you know if you're building a product offering and it payments is a just an add-on piece that you're getting somewhere that doesn't represent your product, it doesn't represent your brand, it doesn't have the same user experience, um, that's going to be a very different experience for a client. And actually, in many cases, if you're taking a client somewhere else versus embedding it into your software platform, those clients may be very wary of, oh, where am I going? Especially these days with you know so so much um opportunity around fraud. So I think one of the one of the things that you know software companies really need to think about is the ones that are successful really think about how do you truly integrate it into their overall platforms? How do they make it part of their overall workflow? How does that workflow end up getting the um a you know a client onboarded, both um for their software but also for being able to take payments? How does that happen? How does that workflow happen all the way through to their the end uh end consumer making that payment and making sure that they are working with a partner who has has a really good understanding of payments because most of these companies they don't need to be payment experts, they're experts in in building SaaS software, they're probably experts in their particular vertical industry or or horizontal industry, but payments is a very complicated, has a lot of compliance issues, has a lot of regulatory issues, and making sure that you're working with a company that can help you make that look seamless so that the client, their end client, that end customer consumer has a has an amazing experience all the way through. And basically taking a payment doesn't feel any different than anything else that they're doing on the platform is the way that the mo that strategically allows software companies to be the most successful.
SPEAKER_02:Okay, I think that's a good segue into the next question, sticking with you, Peter. Um, you know, payments creates uh obviously a stickier, more valuable relationship with their end users. How do you see embedded payments impacting their churn, them being able to expand, and their overall customer loyalty?
SPEAKER_00:Yeah, well, I think that's you know, it's back to as you it's back to really customer experience. And I would say that that is a cornerstone of of any kind of product offering, is that both the the partner or the SaaS company in this case and the can the end consumer have to have a great experience. And so having and also if you're providing a full service type of platform, you know, you don't want to just, for example, as a software company provide one component. You want to provide as many components as possible because it makes it much harder for someone to switch, right? If I'm a if I'm a if I'm a SaaS company that has to integrate with four or five different things to make everything work together, and then my my my end client has to go to three or four very different looking interfaces, that's a bad experience for that particular client. So the way that you know payments by in integrating and embedding payments and also integrating and embedding other fintech products provides that you know great consumer experience all the way through. And by having that great experience, then you know that those SaaS partners that uh those that are of ours aren't gonna want to change from our platform as well as their consumers aren't gonna want to move to another platform because of this the feature sets that it has, the ease of use that it has, the consistent experience that they're feeling. And it allows those SaaS companies to be much more competitive. And so when you at the end of the day, embedding payments, you being able to use their own brand and not having a consumer have to worry about is this going to be a fraud issue? Is this a challenge for me to actually put my payment information in there? Um is going to help them win and keep more customers. And if you think about certain kind of capabilities, you know, there are certain businesses that you want to be able to, you know, if you think about software companies that provide gym memberships, right? They really want to be able to go and be able to put my card, give them my credit card, and then just take my payment every month. And there's a lot of systems like that where I don't want to have to be able to go through a process where I have to continually re-key in my credit card information as a consumer, but I can safely give my credit card information to that, you know, that dentist, that doctor, that hair salon. And whenever I go there, they just automatically take that payment and I can feel secure enough that they have my credit card data, it's going to be protected, it's going to be valuable, and I never feel like I've ever had to really make a payment, and it's much more frictionless.
SPEAKER_02:Okay. So, Luis, over to you. A lot of software leaders underestimate the data story behind payments. So, what new insights become possible when SaaS platforms control both the software and the commerce flow?
SPEAKER_01:Yeah, that's a great question, Greg. So, yeah, once a software platform decides to be able to monetize payments as opposed to have a very like arm's length relationship with it, um, there's there's a lot more that becomes available to them. Obviously, they can see um the basic data that comes through, they can see the volume, the trends, they can you know understand how their consumers are using their system. But um, once they're monetizing payments, there's different bits of information that actually become more important to them than they would have otherwise. So, for example, being able to optimize for interchange becomes very important. And having the data to understand what types of cards are being used on your platform, which ones cost you more, which ones don't, if you want to try to drive consumers towards the use of certain cards to be able to actually affect your bottom line through interchange optimization, um, where you end up with um higher rates if you're in recurring, if you could improve those through some other additional tooling, um, whether it's network tokenization or other interchange optimization products that are out there. Um, and then additionally, as Peter was referencing before, you you have data to be able to offer and cross-sell products to your merchant base. So um being able to give them working capital, um, being able to see the volume that's coming through and understand that you now are in a position to become that partner for your merchants. You're not just a software that's providing the the one thing that you built, which is obviously very important, but you are also now their their payments partner and that you can provide them additional services that help them monetize their own use of your system in addition to um ensuring that you are a full ecosystem for them. Um so there's a lot of data, a lot of cross-all that's available. Um you you'll be able to get access to data feeds with a lot of partners so that you can do this yourself, or you can rely on the partner to provide those insights for you. Um, and then being able to benchmark there's there's a lot of data that helps you understand the health of your business compared to others within that same type of industry or stage where you're at, whether or not you're you know, pre-seed or seed or series A, or if you're a more mature company, there's there's a lot of data out there as to how those companies can perform, especially when they're integrating payments and how you're benchmarking towards them to give you insight as to how you can better optimize your use of payments as well. So um it opens up a lot to be able to bring it in-house and not have it be kind of like an arm's length relationship with the third-party provider. You you really want a partner to get you those insights to help you um make your business more efficient as well.
SPEAKER_02:Okay. So, Louis, sticking with you, we've talked about sort of the end user or customer experience. Let's talk about the developer experience because it's becoming or is a strategic differentiator for some payments partners. So, what ultimately makes a platform developer friendly in a way that really accelerates that adoption for these SaaS companies?
SPEAKER_01:Yeah, this is this is my favorite topic. So, so thank you for this question. Um, you know, there's a lot that's in here. Um, it's not just about building APIs and a software that that's kind of table stakes at this point. But um, as I mentioned before, it's really understanding how developers build their software and then would integrate payments into their stack. So there's a lot of things to look out for and a lot of things that are now expected when you are working with developing or integrating any type of software vendor out there. So um, first is just their their ability to provide their service in a multiple of different ways. Um, whether or not you integrate them in a no code if you're just doing a proof of concept. Um, there's multiple stages in software development. And sometimes you just need to prove an idea out. So being able to bring in no code or maybe very low-code, lightweight options to get a POC out, to test some things, to be able to maybe do some A-B testing in a prep platform. It's important that you don't necessarily need to go all in and do a full build. Um, while you're developing, having a sandbox available is very crucial so that you have a safe place to test, safe place to make errors, um, and that you have developer guides and test suites that really help you understand what all the scenarios are that you need to really deal with. I alluded to it earlier that you don't necessarily need to always develop for the best case happy path, but robust and very well-developed software that gives a good customer experience handles all of those exceptions very well. They understand where things might go wrong. They understand that if a transaction's taking a lot of time, it'll take give you a spinner and it'll let you know, hey, like we're still processing, don't refresh or or or or um abandon this this transaction. Um, being able to handle declines and prompt for another payment, being able to handle um all of those different exceptions and having test suites that walk you through those and a sandbox that can simulate all of those exceptions as well. So you can test those in your own software so that you're not just building in in theory, but you have a way to go through each of those. You can trigger error responses, you can trigger declines, you can trigger um transactions that may take a long time, you can simulate a lot of the bad cases so that your software is robust. So um having those test suites available in all of those test scenarios is also really important from a developer standpoint because that gives you confidence that you are building a robust, a robust integration to a payments provider. Um, and then additionally, the systems that give you feedback, especially in that sandbox environment, where you can see the calls that you've made to the platform and you can understand where you might have missed something, you can get guidance as to an error code that you got and what was missing so that you know how to correct it is is also kind of really important. So you get that live feedback from the system as you're constantly developing and iterating. Um, and then finally, as I mentioned, just meeting people where they are these days, making sure that your IDE that is uh powered via AI is able to understand the documentation for this uh this software platform and be able to properly implement what you're trying to do. Um you know, these developers again, they're they might be new to payments and they're going to rely on the thoroughness of this documentation and how well the AI agents they're using to help them build their own software can consume this documentation. So um, you know, that I can go on into details about MCP servers and and all these different types of components that are out there, but it's it's really just making sure that the they're keeping up and that they are really working with you and feel as cutting edge as you probably are as a software developer. You're building something very important and very interesting that is serving a need. And those who you bring along into your own software need to feel like partners who are doing the same, that are on that same level with you, iterating, building, keeping up with what's the latest, and making sure that they're not creating a jarring experience for your customers because that's important for you to develop that cohesive experience for what you're building. And the partnerships you build are very important to making sure you deliver that that cohesive experience. So um, you know, I I again I can go on and on about what is what is out there that makes a good developer experience. Um, but I'm I'm listening to folks all the time. I'm hearing phone calls and just kind of getting all the insights, and we'll we'll turn things around pretty quick, but I'm excited to see where things go.
SPEAKER_02:Okay. So, Peter, some SaaS founders treat payments as a feature. We've kind of talked about that. Others see it as a strategic growth engine. How should these SaaS founders be kind of reframing their thinking from feature to growth engine?
SPEAKER_00:Yeah, and I think the I think that comes a lot from the lack of knowledge around payments. You know, payments is a complicated subject. It's but you know, it's difficult to understand. I think, I think there are some people that are um in the early stages are very naive about what does it really take to take a credit card payment. As a consumer, it seems like a very easy, simple process, which is is designed to be. But in the background, there's not you know hundreds of things going on to make sure payments get accepted, there isn't fraud, pay, you know, people get paid and both sides get paid, and one pays the other. Um, so I think there has been the start, that was the starting point for a lot of these, um, a lot of these early founders. But it truly is a strategic growth engine. It truly is another component that they want to have within their software stack, and they need to really think about, go back and think about what is their customer journey? How is their customer take going through the and using their software all the way to the end? And at some point in that journey, the customer, the consumer is going to want to make a payment. And how do they make that payment as frictionless as possible, as easy as possible, with the same experience that impacts their brand, right? And so, again, when you think about consumers and how they think, they think about brands, they think about companies they're they they use and work with every day. And so having that same great consumer experience is foundational for any kind of growth for these SaaS companies because they're the people that the companies that are figuring it out, and I think many, many more founders and many, many more SaaS um folks are are understanding payments a lot better than they ever had before, and they understand the strategic importance of it. They just don't understand how to go about and doing it. And so that's where other partners like ourselves come in to really give them the infrastructure and give them the platform to be able to make that a strategic growth driver for them to become more successful. And so I really think they should rethink the reframing is this is another part of what should just be a part of your overall SaaS system that you're developing. Because at some point, someone's gonna need to take a payment and pay for something. And you, as a SaaS provider, want to be in the middle of that process and you wanted to make it make sure that it feels like part of your brand and part of your experience.
SPEAKER_02:Okay, so final question for both of you, and Peter will stick with you. If you had to make one prediction about where SaaS plus payments will be in five years, what's the headline?
SPEAKER_00:I think the headline is um the best, you know, for a SaaS company, the best payment experience for any of their consumers is the one they never ever had. And what I mean by that is they certainly don't know that they don't feel like they're having to do anything really difficult or hard or different to make that payment. It's just as simple as pushing a button and it just happens for them as it does through their entire product offering and through that entire automation that they've built for their customers.
SPEAKER_02:Okay. Louise, same question for you. What's the headline?
SPEAKER_01:Yeah, I mean, similar to Peter, um, you know, pay payments will become invisible, right? The the SaaS companies will still, especially vertical SaaS, focus on their their verticals and you know, they'll be at a position to be able to bring payments in where it's it's not even questioned. It's it is invisible to the end consumer. They access their wallets as they normally would for any other merchant. Um, and it's it's really just becomes table stakes for SaaS to include it at any stage that they're at.
SPEAKER_02:Okay. Well, I think that's a great way to wrap up the show. So thank you both for being here. I know your time's very valuable, so I really do appreciate you being on the show today.
SPEAKER_00:Thank you, Greg. We really appreciate the time.
SPEAKER_02:Absolutely. And to all you listeners out there, I thank you for your time as well. And until the next story. All right, before I hit stop, are we good? Thought it was great, by the way.
SPEAKER_00:Yeah, I I think we're good.