Vertical SaaS used to win on workflows. The pitch was simple: replace spreadsheets, remove admin pain, standardise operations. That model still works, but founders we spoke to say it is no longer where the biggest upside sits. The centre of gravity is shifting from subscription revenue to transaction-led revenue, where payments, lending, and insurance are embedded inside the exact moment work gets done.
This is not just a fintech trend. It is a vertical SaaS business model upgrade. When a platform becomes the operating system for a niche, it does not just “support” the industry. It starts to control the flow of money through that industry. That is why embedded finance keeps showing up as the next strategic layer, especially in sectors like healthcare, restaurants, and construction where payments are frequent, fragmented, and operationally messy.
In healthcare, the opportunity is clear, but the execution is the hard part. Jared Aroh told us embedded payments can raise account value and strengthen lock-in across sub-merchants and end users. Yet he also sees a recurring failure mode: platforms treat fintech as a side quest, so it never gets the focus required to scale.
“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)!”
- Jared Aroh, Founder and CEO, Coherent Healthcare
Aroh’s point is not that embedded fintech is immature. It is that operational readiness is the bottleneck. You can ship payments, but you also need an adoption engine: onboarding flows that do not break clinic operations, support teams that understand chargebacks and reconciliation, and a sales motion that can explain financial value without confusing the buyer. Smaller platforms often underestimate this, then wonder why adoption stalls.
At the macro level, founders see the same arc across verticals. Vertical SaaS platforms have become the default operating layer for niche industries, and capturing transaction volume is the logical next step. Michael Gargiulo framed this as a shift from selling subscriptions to monetising the economic activity already happening inside the platform.
“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.”
- Michael Gargiulo, Founder and CEO, VPN.com
Whether or not every forecast lands, the strategic direction is hard to ignore: transaction revenue compounds because it grows with customer activity, not seat count. It also deepens switching costs. Once a platform becomes the place where money moves, leaving becomes painful for the business, not just inconvenient for staff.
John Taylor Garner put it even more bluntly. In his view, software is no longer the product. It is the wedge. The high-margin layer sits in the financial products delivered inside the workflow, where convenience and timing win.
“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.”
John Taylor Garner, Founder and CEO, Odynn
If there is a single takeaway from these conversations, it is that embedded finance is not a monetisation trick. It is a platform strategy. The winners will be the companies that treat fintech like a first-class product line, invest in the operational machinery to drive adoption, and design financial services as part of the workflow, not bolted onto the side.