The merchants, by the way, are paying full rack rate for software, so it’s no longer about moving the ball under the cup in hopes the merchant doesn’t see how they’re going to get boned: it’s in-your-face out in the open, and merchants are eating it up because the softwares realized that the merchant can’t do the math even if you make it transparent.<\/p>\n\n\n\n
Classic.<\/p>\n\n\n\n
Which gets to our analysis.<\/p>\n\n\n\n
If you look at embedded softwares that are growing the fastest – or have become the largest – it’s the softwares that have a stranglehold on the SMB segment of their respective markets.<\/p>\n\n\n\n
Why?<\/p>\n\n\n\n
Because SMB merchants exist for the sole purpose of funding whatever it is the software company wants to do.<\/strong><\/p>\n\n\n\n SMB merchants are a minor inconvenience when weighed against the amount of payments margin they generate.<\/p>\n\n\n\n Want to build a ton of features to move upmark?<\/p>\n\n\n\n Bleed the SMB.<\/em><\/p>\n\n\n\n Try your hand at a new vertical?<\/p>\n\n\n\n Bleed the SMB.<\/em><\/p>\n\n\n\n Issue a dividend so investors get off your back?<\/p>\n\n\n\n Bleed the SMB.<\/em><\/p>\n\n\n\n All roads lead to pummeling the SMB on your path to ultimate conquest.<\/p>\n\n\n\n And guess what Stripe has that Adyen does not?<\/p>\n\n\n\n SMBs.<\/strong><\/p>\n\n\n\n Here’s an AI-generated table for you:<\/p>\n\n\n\n Outside of the absurd valuation premium being placed on Stripe, what’s the one thing you notice?<\/p>\n\n\n\n That’s a nearly 3.7x multiplier: for every incremental dollar Stripe processes they earn 3.7x what Adyen does.<\/p>\n\n\n\n Why?<\/p>\n\n\n\n SMBs.<\/p>\n\n\n\n And dumb softwares that serve SMBs.<\/p>\n\n\n\n Stripe is pummeling the SMB via two means.<\/p>\n\n\n\n First, any direct SMBs on Stripe are bleeding out.<\/p>\n\n\n\n Second, softwares that choose Stripe as their processor – most of whom serve SMBs – don’t know shit about payments themselves and have absolutely abysmal revenue shares.<\/p>\n\n\n\n We doubt either gets educated enough to pose an organic threat to Stripe.<\/p>\n\n\n\n Which means Adyen is going to need to find a way to drive these cohorts to their platforms or they’re going to have a serious problem as Stripe has an infinite cash machine in their SMB book of business. <\/p>\n\n\n\n Toast has ridden this tactic to great scale, becoming the largest restaurant technology vendor by – in some cases – orders of magnitude:<\/p>\n\n\n\n You can’t fight the logic here.<\/p>\n\n\n\n If we were Adyen, this is something we would seriously examine.<\/p>\n\n\n\n Or maybe Adyen just wants to become a company with slow to no growth that issues dividends.<\/p>\n\n\n\n Because that’s what’s staring them in the face when they’ve saturated enterprise. <\/p>\n","protected":false},"excerpt":{"rendered":" We’ve watched the vertical software space for the past 15 years, having participated on many sides as operator, advisor, and investor. If there’s one thing that the entire investment community fails to appreciate, it’s the undeniable absence of any vestige of payments sophistication on the part of merchants. Even enterprise merchants, frankly. Dunning Kruger. To […]<\/p>\n","protected":false},"author":1,"featured_media":31084,"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":[5,4],"tags":[],"class_list":["post-31077","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-solutions","category-merchants","post_format-post-format-image"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p81nA2-85f","jetpack_featured_media_url":"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2026\/04\/Screenshot-2026-04-07-at-4.50.59-PM.png?fit=1320%2C940&ssl=1","_links":{"self":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/31077","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=31077"}],"version-history":[{"count":7,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/31077\/revisions"}],"predecessor-version":[{"id":31161,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/31077\/revisions\/31161"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media\/31084"}],"wp:attachment":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media?parent=31077"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/categories?post=31077"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/tags?post=31077"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2026\/04\/Screenshot-2026-04-07-at-4.50.59-PM.png?resize=770%2C548&ssl=1\")
<\/figure>\n\n\n\nStripe processes ~40% more payments volume than Adyen but their revenues are 147% higher.<\/h3>\n\n\n\n
Company<\/strong><\/td> Ticker<\/strong><\/td> Market Cap (Approx.)<\/strong><\/td> Primary Business Focus<\/strong><\/td><\/tr><\/thead> Toast<\/strong><\/td> TOST<\/td> $14.97 Billion<\/strong><\/td> SMB<\/td><\/tr> Shift4 Payments<\/strong><\/td> FOUR<\/td> $3.64 Billion<\/strong><\/td> SMB<\/td><\/tr> Olo<\/strong><\/td> OLO<\/td> $1.73 Billion<\/strong><\/td> Enterprise<\/td><\/tr> Lightspeed<\/strong><\/td> LSPD<\/td> $1.23 Billion<\/strong><\/td> SMB<\/td><\/tr> NCR Voyix<\/strong><\/td> VYX<\/td> $889.68 Million<\/strong><\/td> Enterprise<\/td><\/tr> PAR Technology<\/strong><\/td> PAR<\/td> $507.83 Million<\/strong><\/td> Enterprise <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n