Unfortunately, we see a number of payment embedding companies espousing ridiculous things like, “every software company should be a payments company.”<\/p>\n\n\n\n
No, they shouldn’t.<\/p>\n\n\n\n
This level of schilling is intellectually dishonest.<\/p>\n\n\n\n
There are two requirements for software companies to have a bite at the payments apple.<\/p>\n\n\n\n
If you’re not in the flow of funds, you need a really, really compelling reason why you should be.<\/p>\n\n\n\n
Let us give you an example of a software company that pulled off a masterclass and inserted themselves – rightfully – into the flow of funds. <\/p>\n\n\n\n
This software is the B2B reporting ledger for an industry that’s required to disclose the movement of product to governmental agencies.<\/p>\n\n\n\n
These authorities were lacking financial transparency: how do we know we’re collecting the right amount of taxes?<\/p>\n\n\n\n
By embedding payments, this software could now report both product and financial movement across the distribution chain.<\/p>\n\n\n\n
Massive win.<\/p>\n\n\n\n
Most softwares don’t even find themselves in a position to be in the flow of funds. For example, you could be an analytics software.<\/p>\n\n\n\n
What commerce is possibly going over your system?<\/p>\n\n\n\n
You don’t have a right to the payments. <\/p>\n\n\n\n
Some software companies have a bite at the apple, but few have the right to own it.<\/p>\n\n\n\n
Let’s walk through an example.<\/p>\n\n\n\n
Take a retailer. The retailer will usually operate in multiple channels, like in-store and online.<\/p>\n\n\n\n
Most often the in-store volume is 90% of their business while the online portion is quite small by comparison.<\/p>\n\n\n\n
The online ordering provider might think that they have a claim, or even a right, to the 90% of in-store volume.<\/p>\n\n\n\n
This is a fallacy.<\/p>\n\n\n\n
The in-store POS is the most important system for this merchant.<\/p>\n\n\n\n
They’re handling 9x the volume of the online ordering solution and likely responsible for way, way more than the online ordering solution.<\/p>\n\n\n\n
The same can be said about a marketing or loyalty application: you represent an infinitesimal portion of the merchant’s commerce. <\/p>\n\n\n\n
No, you have no right to own payments.<\/p>\n\n\n\n
This is what always cracked us up about Olo’s belief that they would take Olo Pay and own the entire payments experience.<\/p>\n\n\n\n
Any POS of scale could use Adyen, the same payments provider Olo uses, with the exact same features that Olo positions as “groundbreaking”.<\/p>\n\n\n\n
The fact that Olo has any card present processing volume shows you precisely why Toast was able to eviscerate the entire restaurant POS market.<\/p>\n\n\n\n
Verticalized softwares are generally in a much stronger position to own the payments than are horizontal solutions. The exceptions are specialized horizontal payment solutions.<\/p>\n\n\n\n
Software companies need to undertake a bit of research before they get pregnant on the idea that they’re sitting on a free profit stream.<\/p>\n\n\n\n
But even then, the odds of a software making payments work is a lot less than you might imagine.<\/p>\n\n\n\n
From integrating payments to penetrating the back book, it takes payments know-how to succeed.<\/p>\n\n\n\n
If you’re smart enough about payments you can carve yourself at lease some niche because most people – even at larger software companies – are clueless. <\/p>\n","protected":false},"excerpt":{"rendered":"
Unfortunately, we see a number of payment embedding companies espousing ridiculous things like, “every software company should be a payments company.” No, they shouldn’t. This level of schilling is intellectually dishonest. There are two requirements for software companies to have a bite at the payments apple. First, are you in the flow of payments? If […]<\/p>\n","protected":false},"author":1,"featured_media":25408,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"image","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[5,3],"tags":[],"class_list":["post-25047","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-solutions","category-pos","post_format-post-format-image"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p81nA2-6vZ","jetpack_featured_media_url":"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/08\/law-597119_640.jpg?fit=640%2C603&ssl=1","_links":{"self":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/25047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/comments?post=25047"}],"version-history":[{"count":7,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/25047\/revisions"}],"predecessor-version":[{"id":26727,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/25047\/revisions\/26727"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media\/25408"}],"wp:attachment":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media?parent=25047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/categories?post=25047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/tags?post=25047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}