Latest / Leaders In Payments / Embedded Finance: From Hype to Execution with Jane Podbelskaya, Charge Forward | Episode 526

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Embedded Finance: From Hype to Execution with Jane Podbelskaya, Charge Forward | Episode 526 · Leaders In Payments

• 0:00
  SPEAKER_01: Welcome to the Leaders in Payments Podcast, where we talk to sea-level leaders from across the payments landscape.
• 0:07
  SPEAKER_01: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  SPEAKER_01: We will also hear stories from our guests about their journeys to the top.
• 0:18
  SPEAKER_02: Hello, everyone, and welcome to the Leaders in Payments Podcast.
• 0:20
  SPEAKER_02: I'm your host, Greg Myers, and today's special guest is Jane Podbelskia, the founder of Charge Forward, an independent vendor agnostic intelligence platform focused on embedded finance for software companies.
• 0:33
  SPEAKER_02: This episode is part of our three-part series that Jane and I are doing around embedded finance leading up to Embedify 26, our embedded finance summit for vertical SaaS leaders, happening in Salt Lake City on October 13th.
• 0:45
  SPEAKER_02: You can learn more about the event at Embedify2026.com.
• 0:49
  SPEAKER_02: So the title of today's episode is Beyond Subscription Revenue: Finding the Financial Opportunity Hidden in Your Platform.
• 0:56
  SPEAKER_02: We're going to be peeling the onion back and digging into how vertical SaaS companies can uncover real revenue inside their own workflows as AI continues to pressure traditional subscription pricing.
• 1:07
  SPEAKER_02: So, Jane, thank you so much for joining me and welcome to the show.
• 1:10
  SPEAKER_00: Greg, thanks so much for inviting me.
• 1:13
  SPEAKER_00: I'm very excited about this episode.
• 1:16
  SPEAKER_02: Before we jump into the questions, can you please give us a quick rundown on your background and maybe walk us through what Charge Forward does?
• 1:23
  SPEAKER_00: So I started my career as a software engineer.
• 1:27
  SPEAKER_00: I was a solutions and software architect for business process outsourcing solutions for a number of years until I got an MBA and went to management consulting.
• 1:40
  SPEAKER_00: So I was with Bain and Company for a few years.
• 1:43
  SPEAKER_00: And then I decided to come back to technology as an investor.
• 1:47
  SPEAKER_00: I joined Girl Stage Venture Fund Georgian, where we were investing in B2B SaaS, which now people started calling vertical SaaS.
• 1:58
  SPEAKER_00: There, I was actually lucky to be an early stage investor in Shopify, and I witnessed firsthand this evolution of a pure play SaaS company into practically payments and fintech.
• 2:12
  SPEAKER_00: Can't take any credit for what happened.
• 2:14
  SPEAKER_00: Topy is an exceptional entrepreneur and he drove this transition all by himself.
• 2:19
  SPEAKER_00: And we were just lucky to have a front row view into this transition.
• 2:25
  SPEAKER_00: But I continued to invest in SaaS software in different industries.
• 2:30
  SPEAKER_00: And during pandemics here, I actually made a jump into an early stage fintech fund where I was investing in payments companies, insure tech, lending tech, banking tech.
• 2:41
  SPEAKER_00: That's where I started to develop a thesis around embedded finance.
• 2:45
  SPEAKER_00: And I started to suspect that what Shopify did was not a one-time event and the fluke and special to Shopify, but actually a playbook that was written and that it will now be replicated across many industries.
• 3:02
  SPEAKER_00: And in 2024, I decided to launch ChargeFord.
• 3:07
  SPEAKER_00: So ChargeForward, as you mentioned, is an intelligence and advisory firm.
• 3:11
  SPEAKER_00: So I publish a lot of content about embedded finance, and I advise software companies, non-financial software companies, on how to embed and monetize financial services.
• 3:25
  SPEAKER_00: So that's me.
• 3:26
  SPEAKER_02: That's awesome.
• 3:27
  SPEAKER_02: That's awesome.
• 3:27
  SPEAKER_02: So a lot of knowledge, obviously, from several different perspectives.
• 3:31
  SPEAKER_02: So it's going to be a great conversation.
• 3:33
  SPEAKER_02: First question: why is embedded finance becoming even more important as AI puts pressure on traditional SaaS pricing and subscription models?
• 3:43
  SPEAKER_00: So for the last, I'd say 15 years, per seat size, SaaS model was the dominant software delivery and pricing.
• 3:53
  SPEAKER_00: So SaaS is both delivery software in the cloud and pricing, per seat licensing.
• 3:58
  SPEAKER_00: That model was amazing.
• 4:01
  SPEAKER_00: And the reason venture capital firms love to invest, and investors in the public markets continue to the trend is because SaaS model has high predictability, it has high margins, 80%, 90% margins are not uncommon in SaaS.
• 4:18
  SPEAKER_00: And as a result, software companies had high valuation multiples.
• 4:23
  SPEAKER_00: Well, now we entered the age of AI and it's compressing the SaaS model from multiple directions all at once.
• 4:31
  SPEAKER_00: So let me explain what they are.
• 4:33
  SPEAKER_00: First of all, software is becoming cheaper to build, and at the level of features, adding new functionality, releasing new sleek AI-built superior tools is easier than ever.
• 4:47
  SPEAKER_00: And incumbents and being threatened by new AI-built players.
• 4:51
  SPEAKER_00: Second, is that you probably heard the term service as a software.
• 4:56
  SPEAKER_00: So now AI agents are actually instead of giving people tools to do the work, they actually do the work of those people.
• 5:04
  SPEAKER_00: And when the software is replacing the seats, you can't really charge for those seats.
• 5:10
  SPEAKER_00: So the pricing model of AI is changing.
• 5:12
  SPEAKER_00: And then the third is I know that the AI capabilities they seem magical at times, right?
• 5:18
  SPEAKER_00: But one kind of negative side of AI-built tools that people don't talk enough about is that it has lower margins.
• 5:27
  SPEAKER_00: Because AI solutions typically built on the basis of foundational LMs, so the cost of those tools, the underlying cost, is higher.
• 5:37
  SPEAKER_00: So enter embedded finance.
• 5:39
  SPEAKER_00: So let me explain why it matters.
• 5:42
  SPEAKER_00: AI has made software easier to build, monetization got a little messed up for all the reasons I explained.
• 5:48
  SPEAKER_00: But embedded finance is giving us both.
• 5:51
  SPEAKER_00: It gives us a new way to monetize software.
• 5:54
  SPEAKER_00: And it's actually more aligned with the business success.
• 5:58
  SPEAKER_00: When we were charging people proceeds, we were just basically charging people to use the tool.
• 6:03
  SPEAKER_00: Now, embedded finance is tapping into transactional flows of the business.
• 6:08
  SPEAKER_00: And let's say if GMB or payments processing volume of a company is growing and you're making money on their payments, that means they're succeeding and you're succeeding.
• 6:18
  SPEAKER_00: So that transactional revenue is actually much more sustainable and aligned with your customers.
• 6:25
  SPEAKER_00: And actually, margins of embedded finance are much, much higher than they are of AI-build tools.
• 6:31
  SPEAKER_00: Embedded finance creates again a new way to both monetize software and also maintain profitability of the software.
• 6:40
  SPEAKER_00: And as a result, we're already seeing this in the public market.
• 6:44
  SPEAKER_00: And there's been a number of reports.
• 6:47
  SPEAKER_00: William Blair has published a report that showed that software companies that have at least one financial product tend to have from 20 to 25% higher multiples and higher valuations than those that are pure software.
• 7:01
  SPEAKER_00: And if they have multiple embedded finance products, that premium can go up to 50%.
• 7:07
  SPEAKER_02: One of the things that I want to clarify for people, and it's not that people don't know this, but I think for a long time there was embedded payments, and that was a huge focus.
• 7:18
  SPEAKER_02: And then the term embedded finance came along.
• 7:20
  SPEAKER_02: And I think some people equated that with lending.
• 7:23
  SPEAKER_02: So that a lot of people were thinking embedded finance was mainly lending or more banking products.
• 7:29
  SPEAKER_02: And kind of the view that I have, and I think you agree that it's much broader than that.
• 7:33
  SPEAKER_02: It could be payments, it could be lending, could be other banking products, payouts, could be accounting embedded, payroll embedded, a lot of different products.
• 7:42
  SPEAKER_02: So when we talk about embedded finance, it's much broader than just say payments and lending.
• 7:48
  SPEAKER_02: Do you agree with that assessment?
• 7:50
  SPEAKER_00: Absolutely.
• 7:51
  SPEAKER_00: And this has been a very, very interesting trend to watch.
• 7:54
  SPEAKER_00: And the way I define embedded finance and why it's become possible for software companies to embed financial services is that in the past, even in the Shopify days, if a software wanted to add financial products, it had to go all the way to financial institutions and become licensed and certified and hire huge compliance and risk departments.
• 8:17
  SPEAKER_00: And it's still possible to do it that way today.
• 8:20
  SPEAKER_00: And when companies reach massive scale, they still pursue that path because it gives even higher profitability profiles.
• 8:27
  SPEAKER_00: But the reason embedded finance is having its golden era, if you will, today is because there is so many embedded finance players that came to the market in the last three to seven years.
• 8:42
  SPEAKER_00: And the embedded finance providers basically do the hard job of taking care of compliance and risk, and they manage relationship with financial institutions at the back end, and they're providing simple API access to the software company to basically plug and play and offer the service to their clients.
• 9:05
  SPEAKER_00: And you're right, initially, and I would say like Stripe probably was one of the first two embedded finance players on the market, and they happen to be a payments company.
• 9:15
  SPEAKER_00: And I would say about 80% of software companies that have embedded finance, they have payments.
• 9:22
  SPEAKER_00: So it is a product that came to the market first.
• 9:25
  SPEAKER_00: But you're right, this ecosystem of embedded finance providers has now expanded to include many embedded lenders, embedded insurance companies, embedded payroll, embedded accounting.
• 9:37
  SPEAKER_00: It's actually even exploding beyond embedded finance into things like embedded background screening.
• 9:44
  SPEAKER_00: I focus less on those things because I tend to stay in the embedded finance for risk and compliance and complexity of it.
• 9:52
  SPEAKER_00: But this concept of embedding is a very, very interesting monetization lever that is now available for companies, which again is super important in the HBI.
• 10:04
  SPEAKER_02: Where should these vertical SaaS companies look within their customer workflows to uncover these opportunities, to find the financial activity, the I like to call them transaction moments that they're able to monetize?
• 10:18
  SPEAKER_02: Where should they look for that?
• 10:19
  SPEAKER_00: You're right to point out that you need to look at the workflow first and foremost, what you're automating.
• 10:25
  SPEAKER_00: And maybe I should kind of take a step back, or kind of like assumed here in the beginning of our conversation that any software company can embed financial services.
• 10:33
  SPEAKER_00: Actually, vertical software and B2B SaaS is best positioned.
• 10:38
  SPEAKER_00: Companies that automate key operating processes of a business are best positioned to embed financial services.
• 10:46
  SPEAKER_00: So if a company is focused on, let's say, cybersecurity or drug discovery, financial services don't belong in a workflow.
• 10:54
  SPEAKER_00: But if a software automates workflows of a restaurant or a tattoo salon or yoga studio or tree care professionals or dealer makers, that's the software that runs the core operating workflows.
• 11:11
  SPEAKER_00: And in those workflows, as you pointed correctly, you can often spot an opportunity or spot transactions.
• 11:19
  SPEAKER_00: Payments again is for the most obvious ones.
• 11:22
  SPEAKER_00: When you're booking your trip, you when you're buying your car, where you're doing a service, when you're performing maintenance on your home heater, you pay for that.
• 11:31
  SPEAKER_00: So there is a payment flow.
• 11:33
  SPEAKER_00: So that money movement is the first thing you look for in the workflow.
• 11:38
  SPEAKER_00: But beyond that, I like to point out and suggest that companies look at what I call financial friction.
• 11:45
  SPEAKER_00: So let's say your customers are using your software to process payments, but then they leave your software and they go to QuickBooks to track their earned revenue and the payments.
• 11:58
  SPEAKER_00: So they go back and forth from your software and then they say, like, hey, can you integrate me with QuickBooks?
• 12:03
  SPEAKER_00: So that already should serve as a signal that there is an opportunity for you to offer these services yourself as opposed to letting customers leave the platform.
• 12:13
  SPEAKER_00: Every time your customer downloads a CSV out of your software, every time they jump to another tool, that is a signal.
• 12:22
  SPEAKER_00: And maybe the third one I would like to mention, and this is where actually like AI and fintech start to touch each other in a positive way, is like informational advantage.
• 12:32
  SPEAKER_00: So, what does your software know?
• 12:35
  SPEAKER_00: What kind of data your software has about your customers that financial institutions don't?
• 12:41
  SPEAKER_00: Let's say you are a software for restaurants, you probably know which restaurants get fully booked out on weekends and which ones maybe qualified for a loan.
• 12:54
  SPEAKER_00: Or let's say you are servicing field services companies that do lawn care or landscapes for backyards.
• 13:04
  SPEAKER_00: You see which ones are actually growing, get more bookings, get more clients, and you will have a better view into their operations to say, like, oh, this particular provider maybe qualified for a loan so that they could expand their business, maybe hire additional crew, maybe buy new equipment, and they grow your business.
• 13:23
  SPEAKER_00: So, what do you know about your customers?
• 13:27
  SPEAKER_00: And especially if you've been managing their workflows for several years, you probably accumulated quite a bit of insights and you know how a healthy business looks like better than any financial institution will be.
• 13:40
  SPEAKER_00: So that information advantage also can become a foundation for financial product.
• 13:46
  SPEAKER_02: We've talked a little bit about this already, but I think I don't want people to get caught up on embedded finance being all about payments.
• 13:53
  SPEAKER_02: I mean, obviously payments is a huge part of it, to your point.
• 13:56
  SPEAKER_02: So much data on transaction level customers.
• 13:59
  SPEAKER_02: But where are you seeing the most compelling embedded finance opportunities, say beyond payments?
• 14:06
  SPEAKER_00: Well, the answer that I tend to give that people don't like is like, oh, it depends, right?
• 14:11
  SPEAKER_00: I've seen different businesses that start with payments and then they go straight to insurance.
• 14:16
  SPEAKER_00: Or some go to adding payroll.
• 14:19
  SPEAKER_00: And I can give you those examples.
• 14:20
  SPEAKER_00: But I would say, like, on balance across the industry, kind of the hottest product day is lending for the reasons that I just described.
• 14:29
  SPEAKER_00: Especially if you start processing companies' payments, you accumulate that data.
• 14:35
  SPEAKER_00: So you are actually in a very good position to offer lending.
• 14:38
  SPEAKER_00: However, there's quite a few embedded lending providers that do not need you to be processing payments.
• 14:45
  SPEAKER_00: So you can start with embedded lending in some cases.
• 14:48
  SPEAKER_00: I can give you some stats actually that could be helpful to illustrate the point.
• 14:52
  SPEAKER_00: I was actually researching this question very recently, trying to understand the trends and the adoption.
• 14:58
  SPEAKER_00: So those that I just mentioned, the restaurant software, so uh their capital product, which is basically their lending product, has been growing at about 35% year over year, and it's a very profitable product.
• 15:12
  SPEAKER_00: And it's actually growing faster than the core payments product.
• 15:16
  SPEAKER_00: Shopify Capital originated 4.2 billion with a D in 2025, and their loan book has grown north of 40%.
• 15:26
  SPEAKER_00: Stripe Capital is Stripe's lending product, and its funding volume has grown in 2025, about 45%, funding something like 80,000 businesses.
• 15:40
  SPEAKER_00: And amongst the embedders, Mind Body Capital is another product that people have been talking about.
• 15:47
  SPEAKER_00: And Mind Body offers software for Yoga Studios, fitness clubs, and their capital product has been growing at about 60%.
• 15:56
  SPEAKER_00: As I said, it's a new age.
• 15:59
  SPEAKER_00: But again, the reasons people do this is first and foremost, is it's a new revenue stream, which is amazing.
• 16:05
  SPEAKER_00: But lending actually is a very profitable business.
• 16:09
  SPEAKER_00: People don't realize how high margins are on lending, especially in these embedded solutions where your risk and your loss ratios can actually be very, very low for that data advantage story that I just described.
• 16:25
  SPEAKER_00: But I should still mention other products.
• 16:28
  SPEAKER_00: Payroll is another one that I'm starting to see, and payouts in insurance.
• 16:34
  SPEAKER_00: So give you a couple examples.
• 16:36
  SPEAKER_00: I worked with a school information system and they started with payments to accept tuition payments.
• 16:42
  SPEAKER_00: The second product that they introduced was insurance because parents paying high tuition want to make sure that if something happens, they need to move, they need to withdraw their child, they can get insurance back.
• 16:54
  SPEAKER_00: Another example is event management platform.
• 16:57
  SPEAKER_00: Same idea.
• 16:58
  SPEAKER_00: So when people are buying tickets for events, if it's a big expensive event, people are worried.
• 17:05
  SPEAKER_00: What if something happens?
• 17:06
  SPEAKER_00: I'm sick with a flu and I can't come.
• 17:08
  SPEAKER_00: People are quite willing to buy event cancellation insurance.
• 17:13
  SPEAKER_00: So in some cases, as I said, companies don't start with lending, they start with other products.
• 17:18
  SPEAKER_00: Banking is actually slower, embedded banking, more like expense management, is more popular.
• 17:25
  SPEAKER_00: Pure, like here, open an account, I think is gonna come, but it's slower in adoption.
• 17:31
  SPEAKER_02: So one of the things that I think is important for people to understand, and you probably have a great perspective on this, is we talk about embedding these products like it's just some simple thing that you just do and it magically happens.
• 17:45
  SPEAKER_02: What makes a company ready to do it?
• 17:47
  SPEAKER_02: Like what are the internal capabilities, whether that's people, whether that's technology, whether that's the capital they need, what are the things that they need to have in place to be able to do this successfully?
• 17:59
  SPEAKER_00: It's a great question, Greg.
• 18:00
  SPEAKER_00: And again, because this has changed so much over the last decade.
• 18:05
  SPEAKER_00: A decade ago, I would have to say, like, well, you have to be prepared to build a big compliance and risk management and the whole fintech department to build that.
• 18:16
  SPEAKER_00: But sometimes people today think the opposite.
• 18:20
  SPEAKER_00: They think, well, I'll just partner with embedded finance provider, and then they will tackle all the complexity and I'll just turn the switch on and it will work.
• 18:29
  SPEAKER_00: And sometimes from a technological standpoint, there is a bit of integration that takes a month or two.
• 18:36
  SPEAKER_00: But that's true.
• 18:37
  SPEAKER_00: Like compliance and risk is now being taken care of primarily by your partner, and all the financial relationships with institutions in the back end, all that is true.
• 18:48
  SPEAKER_00: You don't have to do that anymore.
• 18:49
  SPEAKER_00: It's much easier.
• 18:50
  SPEAKER_00: But what people miss is that embedded finance is not a feature.
• 18:55
  SPEAKER_00: Well, you can't treat it as a feature to like, hey, here's payments.
• 18:59
  SPEAKER_00: If you want, you can use this feature.
• 19:01
  SPEAKER_00: Here's insurance, here's a lending product.
• 19:03
  SPEAKER_00: But in reality, because embedded finance can be such a big revenue and profitability driver, it's very important to manage it as a product, not as a feature.
• 19:16
  SPEAKER_00: And manage it as a PL as opposed to just, again, yet another capability you just added and threw to the customer to say, like, if you want it, go use it.
• 19:26
  SPEAKER_00: And what I mean by this, when you're managing it as a product, you need to think about pricing, packaging, UIUX, when and how you surface this product to your customers.
• 19:37
  SPEAKER_00: If it's a product that they already have, maybe payments, how are you going to ensure that they will use your payments capabilities, not third party that they've been using before?
• 19:48
  SPEAKER_00: If it's a brand new product like lending, they may not even know that they can get a loan from their software.
• 19:55
  SPEAKER_00: So you need to explain this and be super clear and ensure that they trust you and understand how this product works.
• 20:01
  SPEAKER_00: If it's an insurance product, again, maybe they never had it before, they don't understand the value that it gives them.
• 20:08
  SPEAKER_00: So you need to convey that value, you need to sell it, you need to enable your sales team, customer success team, you need to ensure that the UI UX is smooth.
• 20:17
  SPEAKER_00: And when you're communicating these new features to your customers, and in some cases to your customers' customers, because there is a difference between B2B and B2C embedded finance products, which we can talk about separately.
• 20:29
  SPEAKER_00: You actually need to make sure that even your messaging is compliant because advertising financial services falls under certain number of regulations.
• 20:39
  SPEAKER_00: Usually your vendor will help you with that, but still you need someone on your company side to manage all of this pricing, packaging, go-to-market support.
• 20:51
  SPEAKER_00: Again, you usually split support with the vendor.
• 20:55
  SPEAKER_00: Maybe first-level support is provided by your team, deeper technical support is provided by the embedded finance partner you have.
• 21:03
  SPEAKER_00: So how you manage that handoffs is very important.
• 21:07
  SPEAKER_00: That is the type of readiness you have to have in place, which is more structural and foundational, if you will, than just technological.
• 21:19
  SPEAKER_02: Well, we have so much more to cover.
• 21:21
  SPEAKER_02: That's why we've made this a series and we've got two more episodes.
• 21:25
  SPEAKER_02: To wrap up today's episode, what is the one key takeaway that you would want the vertical SaaS operators to leave from this discussion?
• 21:34
  SPEAKER_00: I would say one thing to think about, like a big picture thought.
• 21:39
  SPEAKER_00: Like we just talked about all the benefits that software companies embedding financial services get.
• 21:45
  SPEAKER_00: And it's direct and indirect, right?
• 21:48
  SPEAKER_00: It's new revenue, new profitability, it's better stickiness, better retention, lower churn, better competitiveness, higher multiples.
• 21:57
  SPEAKER_00: So it's a great advantage.
• 21:59
  SPEAKER_00: Another thing to think about is that embedded finance is actually like on a bigger scale, a trend in how financial services are delivered to businesses and consumers.
• 22:12
  SPEAKER_00: If you think about in the past, people used to go to banks and call insurance brokers, that is fading.
• 22:21
  SPEAKER_00: Financial services of the future will be delivered through software, both to consumers and to businesses.
• 22:28
  SPEAKER_00: And if you're a software company listening to this, non-financial software, so think about are you gonna be the one software that will be that channel for financial services?
• 22:40
  SPEAKER_00: Or will you let your competitors take that place instead of you?
• 22:44
  SPEAKER_02: This has been a great episode, a great way to kick off the series.
• 22:48
  SPEAKER_02: So thank you so much for being on the show.
• 22:50
  SPEAKER_02: Look forward to the next episode.
• 22:52
  SPEAKER_02: I know your time is very valuable, so I want to be sensitive to that.
• 22:55
  SPEAKER_02: But thank you so much for being here, and I really appreciate you being on the show, Jane.
• 22:59
  SPEAKER_02: And like I said, I can't wait to dig even deeper on the next few episodes.
• 23:03
  SPEAKER_00: Thank you so much, Greg, and I'm looking forward to the next one.
• 23:06
  SPEAKER_02: For everyone out there, if you want to learn more about Embedify, which Jane will obviously be there, and you want to learn more about the show and to register, please visit Embedify2026.com.
• 23:18
  SPEAKER_01: Thank you for joining us this week on the Leaders in Payments Podcast.
• 23:22
  SPEAKER_01: Make sure you visit our website at leadersinpayments.com, where you can subscribe to the show and where you'll find our show notes.
• 23:29
  SPEAKER_01: If you enjoyed listening, please share on your social channels as well.