Embedded finance has revolutionized how a vertically focused SaaS company produces revenue. The software of a vertically oriented company (e.g., restaurants, dental offices, etc.) can no longer be considered a product — it's a wedge. The actual margin of the company will come from offering the customer lending, insurance, rewards, or payments within their workflow. Restaurant technology companies have moved from 1 - 2% of gross payment volume to 5 - 7% by including payments and tipping in their platforms. In healthcare, patient financing is rapidly evolving to be one of the top drivers of growth for vertical SaaS companies. In the construction industry, software companies are beginning to bundle insurance directly into project work flows and quote, and they are generating far more revenue through embedded commission and revenue sharing models than they were through traditional license fees. This phenomenon is occurring at a rapid rate in areas such as loyalty and travel. When we started Odynn, we started as a travel optimization platform and quickly found that the majority of our revenue opportunities lay in embedding point transfers, card linked offers and white label booking directly into partner systems. This transitioned our pure SaaS model into a hybrid of subscription, per transaction, and rev-share — all delivered through an application or portal owned by another company. The pivot here is: you are no longer just selling software — you're becoming the financial backbone for that specific vertical. It wouldn't surprise me if, by 2026, 50 - 70 percent of the revenue for vertical SaaS companies comes from embedded financial products rather than traditional subscription-based models. Whoever owns the transaction layer owns the business.
What's more, vertical SaaS platforms have evolved into the primary operating systems for niche industries, and integrating financial services is the natural next step in that progression. By 2026, we're seeing firms in construction and healthcare move far beyond simple subscriptions to capture a massive share of the transaction volume they already facilitate. For instance, a platform that adds embedded payments can often increase its revenue per user by two to five times, effectively doubling its total addressable market without needing to acquire a single new customer. In addition to this, the shift toward embedded lending and insurance is creating stickier relationships that traditional banks simply can't match. When a restaurant tech platform uses its own real-time data to offer a merchant cash advance or tailored insurance, it's providing a level of convenience that becomes a massive competitive advantage. My prediction for 2026 is that transaction-based revenue will surpass subscription fees for the top tier of vertical providers, as embedded finance is projected to exceed seven trillion dollars in total transaction value this year.
We provide an embedded payments solution for healthcare SaaS platforms. There are clear benefits for the platform: growing account value, increasing sub-merchant lock-in, and ultimately locking the end user into a single platform. What we also find is that many platforms, especially smaller platforms, struggle to develop robust embedded fintech services because the product lines themselves are considered "second tier" to the primary product. The other challenge that platforms face is around the sales and service proposition to go with the fintech product itself. We find that platforms don't fully realize the operational burden of using an embedded fintech solution even if the product itself is mature. This tension plays out in ramp speed; the platform rolls out a new fintech service but the merchant account adoption speed stalls by months (or years)!