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Exploring the future of embedded finance: Insights from Luke Voiles and Hiroki Takeuchi at Web Summit

At the recent Web Summit in Lisbon, Pipe CEO Luke Voiles and Hiroki Takeuchi, CEO of GoCardless, shared their thoughts on the evolving world of embedded finance. In this Q&A session, they discuss what embedded finance means, how it’s transforming businesses, and their vision for the future of financial technology.

[You can also scroll to the bottom of this post to watch the video of the full conversation]

Q: What does embedded finance mean to you, and how has it developed at your respective companies?

I think embedded finance, as a term, is something that means a lot of different things to different people. For us, the concept of financial services being embedded into people's day-to-day lives is really where we started. When we first started 

, we actually initially launched the product with a partner. One of the things we quickly realized was that businesses didn’t want to think about payments on their own. They wanted it to be embedded in the software or processes they were already running daily.

One of the things that's always driven a big part of our success has been partnering with software providers to serve payments within the processes and experiences they are having on a day-to-day basis. Whether that’s sending a customer an invoice or signing up a customer to a new subscription, being embedded into that process has been key.

 to enable our merchants to get easier access to capital, which is another form of embedding financial services. Partnerships are a key part of what embedded finance means to me.

My focus has been on small businesses for almost 10 years. Looking at small business pain points, the number one is always access to capital. Payments is one of the early leaders in embedded finance. I was at Intuit for a long time—about five years—and then I went to Square. Watching Intuit embed features like allowing customers to send invoices and get paid, we launched QuickBooks Capital, which now does $2.4 billion annually in loan volume to QuickBooks customers.

Companies like GoCardless enable instant bank-to-bank money movement for small businesses. Historically, lending was detached from the system—think OnDeck, Bluevine, or Funding Circle. Now, with truly embedded offerings, GoCardless can send anonymized data, allowing us to pre-approve customer bases. In just a few clicks, businesses can access capital, solving the number one pain point with a seamless experience and high customer satisfaction.

When we talk about embedding financial services, we’re solving big challenges like access to capital. Oftentimes, businesses aren’t even aware of what they can access. Historically, going to a bank was onerous, and many banks aren’t set up to cater to small businesses. The partnership between GoCardless and Pipe makes it easy. Pre-approved offers are surfaced within a merchant’s daily process, providing seamless, timely access to financial tools.

Yes, and it’s about reducing friction while staying compliant. Banks and traditional financial systems struggle to integrate seamlessly. Meanwhile, modern fintech platforms, through partnerships, offer near-instantaneous onboarding and access to services. Our focus at Pipe has always been to embed solutions where users naturally need them, enhancing efficiency and driving adoption.

Q: What are the key factors driving the implementation of embedded finance solutions?

Yeah, for us, as I mentioned earlier, payments aren’t something businesses think of as a standalone process—they’re part of a wider workflow. Our focus has always been on embedding payments as deeply as possible into how businesses already operate, making the experience seamless.

When it comes to our partnership with Pipe, it’s a bit different. We have about 100,000 small businesses using our platform. They love working with us because we help improve their cash flow, reduce late payments, and minimize the time and effort spent on admin. These are key problems we solve for them.

But, as Luke mentioned, access to capital remains a huge challenge for small businesses. Often, it’s not just about the ability to access capital but also about awareness. Many small businesses don’t realize what they’re eligible for. If they’re used to dealing with banks, it’s often a slow and cumbersome process.

The partnership with Pipe has been powerful because we can pre-approve businesses and surface their options directly within their workflow. For example, a business owner checking their customer payments or planning their cash flow can see a pre-approved offer to access capital with just a few clicks. It’s seamless and integrated into their daily operations, which is incredibly powerful.

I completely agree. What’s fascinating is how these integrations solve pain points. For instance, one of our partners serves vertical SaaS businesses for nail salons and hair salons. Another serves service-based businesses like electricians and plumbers.

When thinking about embedding solutions, we ask: What tasks are these customers completing daily in their software? For nail salons, it might be managing appointments, payments, or inventory. That’s when you look at where the need for capital arises—whether it’s paying payroll, covering a bill, or buying equipment. The idea is to present a pre-approved offer at that exact moment of need.

It creates a security blanket for small businesses. They know that access to capital is just a click away whenever they need it. This requires analyzing customer behavior and understanding their workflows. Sometimes, we even help our partners better understand their customer behavior through data analytics and tracking.

Q: How do you see trust in digital financial services evolving?

Trust has come a long way. When we started GoCardless in 2011, businesses were skeptical of online financial providers. They preferred the familiarity of a physical bank branch. But over time, as digital platforms proved their reliability, that perception shifted.

Today, merchants are not only comfortable using digital services but are also open to recommendations from one digital provider to another. This trust in interconnected digital ecosystems has been a game-changer, enabling seamless partnerships like ours with Pipe.

Q: How do differences in regulation and customer behavior impact the implementation of embedded finance solutions across geos?

Regulation plays a foundational role in fintech. While merchants may not see it as part of the value proposition, compliance is critical to enabling the service. For example, onboarding processes need to be seamless while meeting strict regulatory requirements.

Operating globally adds layers of complexity. For instance, you have to navigate regulations from UK regulators, European regulators, and even state-by-state regulations in the US. Solving these challenges in a compliant way while offering a great user experience is a competitive advantage in fintech.

Hiroki’s right. To expand internationally, fintech companies need a modular approach. For example, at Pipe, we use GoCardless as a backend partner for money movement. This eliminates the need to integrate directly with banks in multiple countries.

We’ve built an orchestration layer for onboarding and compliance. This allowed us to launch in the UK just six weeks after starting in the US. By swapping in local datasets and adapting to specific AML (Anti-Money Laundering) rules, we can scale quickly. It’s about being smart with modular systems and relying on trusted local partners to handle the complexities of reconciliation and compliance.

Q: How do you see embedded finance, user experience, and technology evolving?

Embedded finance is about making financial services available in the moment—whether on desktop software or augmented reality. The key is surfacing solutions when and where they’re needed. For example, when a business decides to invest in new equipment, having pre-approved financing embedded directly into that process makes a world of difference.

We’re still in the early stages of this trend, and there’s so much potential for growth.

I see two big trends: better data and changing interfaces.

On the data side, fintech has evolved from relying on tax returns and audited financial statements to leveraging real-time transaction data. With Pipe, we work with perfect cash flow data streams, allowing us to automate credit decisions 100%. As datasets become more comprehensive, risk-taking will improve significantly.

On the interface side, we’ve moved from paper statements to PDFs to dashboards in software like Square or QuickBooks. The future is about automating tasks entirely. AI agents, for example, could handle everything from booking appointments to taking payments automatically. This would free up time for small business owners to focus on their families and their passions.

Embedded finance is transforming how businesses access and use financial services. Technology allows for fast, seamless delivery, and partnership between platforms puts access at the point of need, even across the globe. 

Here's the full discussion between Luke and Hiroki from Web Summit Lisbon, November 2024:

Luke Voiles and Hiroki Takeuchi discuss the evolution of embedded finance solutions and their impact on capital access for small businesses.

See the key takeaways from Luke Voiles and Hiroki Takeuchi's discussion on the future of embedded finance and watch the video of the full conversation. 

Most software companies shouldn’t build a capital product. Here's why:

Convenience has now become table stakes. 

In the past few years, especially since the onset of COVID, we’ve come to expect that what we need can be dropped on our doorstep with the click of a button. Those expectations go beyond our personal lives and carry over into how we run businesses, which is why embedded financing is growing so fast. 

For independent software vendors (ISVs), offering capital to their customers can be a powerful step up in the relationship. Putting capital in their hands when they need it helps ensure SMBs stay healthy and operating, and giving them access to that capital through your software platform increases stickiness and loyalty by letting them get everything they need in one place.

Small business owners want quick access to capital where they already spend time, in the software they use to run their business day to day. Add to that increasingly difficult access to traditional financing, and there’s an enormous opportunity for software companies. But in addition to the opportunity, it also presents a big challenge.

The challenge of building embedded capital 

To put it simply, building a capital product is incredibly hard. There are a lot of moving parts and hurdles you have to clear to make it sustainable. When you really break it down, there are five crucial requirements:

The trouble is, access to capital hinges on the successful execution of the previous four requirements. The increasing verticalization of software gives an advantage in two of these areas, but can software companies overcome the others? 

And when it comes to building in-house, should they even try?

The verticalization of payments and industry-specific software 

The verticalization of payments has been an ongoing trend, with comprehensive software tools that help business owners manage their operations seamlessly. This trend will only continue, leading to more end-to-end operating systems that simplify business management and payment processing. A prime example is Toast, a widely recognized platform that helps restaurateurs oversee just about everything.

Industry-specific software holds unique, accurate, real-time transaction data, which can be a solid foundation for a capital offering. It also provides a steady funnel of new customers, already engaged with the software and using it regularly. However, while vertical software can address the first two requirements of low CAC and consistent data, it falls short in underwriting expertise, operational efficiency, which limits access to external capital. 

These are formidable challenges that even many pure-play lenders struggle with, especially during tough economic cycles. Having had the opportunity to play a significant role in the growth of both QuickBooks Capital and Square Banking, I can say two things for sure: these are high hurdles to jump, even for companies with massive resources available to them, and they’re the kind of problems that Fintech was born to solve.

Integrating financial services within industry-specific software can provide a ton of value to business owners. But the greatest strength of these software companies lies in their specialization. They intensely focus on and understand their industry, and building a capital product in-house distracts from that focus in a way that would be catastrophic. The solution is to partner with someone whose strong suit is connecting businesses to capital through technology. 

Fintech has a significant role to play in making financing more accessible to small business owners, and embedded financial services make perfect sense. With domain expertise across finance and technology, the right Fintech partner can automate the underwriting process, getting accurate results from live data with as little as 3-6 months of history, whereas banks traditionally need two years of audited financials and tax returns. 

Along with operating efficiency and tech-driven underwriting, they can also build compliance and regulatory tools into their embedded offerings, creating a turnkey solution. This allows software companies to leverage their deep industry knowledge and data through an embedded solution as simple as an off-the-shelf product.   

At Pipe, we’ve built an embedded product, 

, that does exactly that. Vertical SaaS companies and payment processors can deliver a fast, frictionless capital experience to their customers, with a native look and feel, without building anything from scratch. Multiple integration options let them decide exactly how hands-on they want to be with the process, based on resources and priorities, and they can launch capital to their customers in as little as a few weeks. 

The rise of embedded finance presents an exciting opportunity for software companies to expand their offerings and empower small businesses. However, it's crucial to recognize the challenges inherent in building a sustainable capital product. Careful consideration, expertise, and strategic partnerships are essential for success in embedded finance. Vertical software solutions and Fintech can work together to create massive value and give small businesses a new level of financial access.

Building a capital product is no small task. Here are three reasons most software companies shouldn't even try.

Building an embedded capital product is no small task. Here are three reasons most software companies shouldn't even try.

Here's why most software companies shouldn’t build an embedded capital product. 

Here's why most software companies shouldn’t build a capital product. 

Will 2025 be the year of embedded finance for software companies?

The business world is no stranger to buzzwords, but embedded finance is more than a fleeting trend. It represents a profound shift in how software companies deliver value and generate revenue. By seamlessly integrating financial services like payments, lending, and payroll into their platforms, software companies can transform themselves into indispensable tools for their customers.

While embedded finance is growing rapidly, this article, like the growth trend itself, isn’t really about embedded finance; it’s about the software companies that will use it to take themselves to the next level, hitting their financial targets while serving their customers even better. It’s also about those customers, who gain the ability to do more of what they need in one place, as financial tools and capital access become an integral part of the software they use to run operations. 

Let’s look closer at launching embedded finance in 2025, how it can benefit you and your customers, and a few key strategies to make it a successful part of your roadmap and get a headstart on your revenue and EBITDA goals without stretching yourself thin.

What is Embedded Finance?: The Basics for Software Companies

embedded finance integrates financial services

—such as payments, lending, and payroll—directly into software platforms. This simplifies workflows, removes barriers, and meets customers right where they are so they can focus on operations.

For small and mid-sized businesses, this is a game-changer. Embedded finance eliminates the need to juggle multiple tools or visit external platforms to access critical financial services. Whether it’s securing funding, managing payroll, or streamlining payments, business owners can accomplish more within the software they already use every day. 

Ultimately, embedded finance bridges the gap between what SMBs need and what traditional financial services have offered. This evolution reflects a broader trend: software platforms no longer serve as standalone tools but as holistic ecosystems that solve multiple problems in one place. Success lies in aligning customer needs with seamless, integrated solutions.

The momentum around embedded finance has already begun, but 2025 will be the tipping point for software companies looking to leverage it for sustainable growth. Why? 

First, the software industry itself is experiencing significant evolution. As 

business owners continue to demand more from the platforms they use

, the need for all-in-one solutions is becoming non-negotiable. Companies that don’t meet this demand risk losing market share to competitors that can offer the financial capabilities their customers need. Embedded finance is no longer a luxury—it’s becoming a necessity.

businesses are struggling to access capital through traditional means

. The barriers posed by outdated lending systems, long approval processes, and limited access to credit are becoming increasingly apparent. As SMBs look for faster, more flexible solutions, software companies that embed financial services directly into their platforms will have a massive competitive edge. They‘ll not only provide more value but will also drive increased customer loyalty by meeting their customers’ needs in real-time.

Finally, the technology and infrastructure to support embedded finance are now more accessible than ever. Fintech solutions that integrate seamlessly with software platforms are maturing, offering easy-to-deploy tools that require little technical overhead. With the right partner, software companies can introduce embedded finance into their product offering quickly and efficiently, with minimal risk.

By embedding financial services, software companies can drive growth, meet market demand, and position themselves for long-term success. Those who wait will risk falling behind as competitors capitalize on the opportunity.

Key Benefits of Embedded Finance for Software Companies

Embedded finance can help software companies grow in several ways. Let’s explore how it can directly impact your revenue and EBITDA goals:

One of the most immediate benefits of embedded finance is the potential to unlock new revenue streams. By integrating financial services like capital directly into your platform, you can create a steady and recurring source of income. By partnering with a Fintech offering, you can launch with little to no engineering resources and can drive this revenue with minimal marketing budget.

2. Increased Customer Retention and Loyalty

When platforms integrate financial services, they tend to become more "sticky"—meaning customers are more likely to stay loyal to the platform because their operational needs (including financial management) are being met in one place. This reduces churn and increases customer lifetime value, as your platform becomes more essential to their business. Customers no longer need to switch between multiple tools and platforms to handle their business operations; they can do everything within your ecosystem, which enhances their overall experience and loyalty.

This stickiness also protects you against the roadmap of competitors. For example, if your customers process payments through your platform and you add an embedded capital offering, you protect yourself from the chance that the external capital provider they 

have used decides to launch a payment product of their own. 

One powerful aspect of embedded finance is that it’s fueled by your customers’ live data. Capital offers, for example, can be underwritten based on transaction history, eliminating much of the manual data collection that makes traditional loan applications so long. It can also provide access to data insights you previously didn’t have access to. 

For example, you may be limited to transaction data from processing customer payments. An embedded offering could provide insights into your share of wallet by comparing the revenue you process with your customer’s total revenue, or spend insights based on an embedded card. This data-driven approach strengthens customer relationships and opens up new opportunities for cross-selling and upselling. 

As more competitors adopt embedded finance, software companies that don't act will find themselves at a disadvantage. The ability to offer integrated financial services will become a key differentiator, especially for businesses in vertical markets. By offering this added value, you can position your platform as the go-to solution for customers in your niche, creating a significant competitive edge. 

Building a financial product in-house can take 6-12 months or longer, taking you away from your core focus. The right Fintech partner can help software companies scale embedded finance quickly and with minimal technical overhead. By leveraging pre-built solutions and APIs, you can embed financial services into your platform without investing significant resources into product development. Your partner can also help you expand the offering into new markets without starting from scratch, helping you maintain momentum as you grow.

In addition to increased LTV and the direct revenue potential of an embedded financial product, it’s also a powerful way to help your customers grow their own businesses and stay healthy. With access to financial services like working capital, your SMB customers can invest in their growth and their people, leading to increased GPV and LTV for your business and reduced churn from customers going out of business. 

In-House Development vs. Partnering with a Fintech: What’s Right for Your Business?

When deciding to launch embedded finance, one of the first decisions software companies face is whether to 

build the product in-house or partner with a Fintech provider

. Both approaches have their pros and cons, and the choice largely depends on your company’s resources, goals, and timeline.

Building an embedded finance solution internally gives you full control over the product, from design and functionality to customer experience. You can customize the offering to your exact specifications, ensuring it aligns perfectly with your platform and meets your customers’ unique needs. It also allows you to keep all revenue in-house and retain complete ownership of the technology.

However, building an embedded finance product in-house comes with significant challenges. First, it requires substantial technical expertise and a dedicated team, including engineering, product, risk, compliance, capital markets, GTM, and more. This can be resource-intensive and may divert focus from your core business operations. The development process can also take 6-12 months or longer, delaying your ability to capitalize on the embedded finance opportunity.

In addition, you’ll need to manage regulatory compliance, data security, and ongoing maintenance, which can become costly and complex. While you have control over every aspect of the product, the risk of failure is also higher without the experience of a Fintech partner.

2. Partnering with a Fintech: The Pros and Cons

Partnering with a Fintech provider like Pipe offers a faster, more efficient way to launch embedded finance. With ready-to-integrate solutions, you can get up and running quickly—often in a matter of weeks, not months. This approach dramatically reduces or even eliminates the need for in-house development and minimizes technical overhead.

A good Fintech partner brings industry expertise, robust infrastructure, and regulatory compliance to the table. They’ve already solved many of the challenges you’d face when building an embedded finance product, from underwriting to fraud detection. 

The downside is that you may have less flexibility and control over the product. However, Pipe offers a range of integration options and a fully themeable product experience that not only allows you to customize a product that feels native to your platform, but also gives you the time and focus to stay agile with your core offerings. 

The decision ultimately depends on your company’s priorities. If you have the internal resources, technical expertise, and time to build the product while maintaining full control, in-house development could be the best route. However, if you’re looking to launch quickly, minimize risk, and leverage existing Fintech expertise, working with a partner like Pipe can help you reach your goals faster and achieve better results.

Choosing the Right Fintech Partner for Embedded Finance

If you choose to go the partnership route, you’ll want to choose an embedded partner that not only brings the technical expertise and infrastructure to the table but also aligns with your business goals and understands your customer base. Here's how to choose the right fintech partner for your embedded finance strategy:

A key benefit of embedded finance is seamless integration. The Fintech partner you choose should offer pre-built solutions, APIs, or SDKs that easily integrate into your platform. This minimizes the amount of time and resources required to bring the financial services to market, reducing the technical burden on your team.

Pipe offers three integration options, from a hosted pilot to a fully-embedded API solution, giving you the perfect fit, whether your focus is a quick launch or a customizable user journey. You should also consider scalability—ensure that your partner’s solution can grow alongside your business, handling increases in transaction volume and expanding to new regions as you scale.

Financial services require robust risk management and compliance programs. When choosing a Fintech partner, ensure they have strong security measures in place and can meet the regulatory requirements of your target market. This includes not only data protection (such as GDPR or CCPA compliance) but also industry-specific regulations for financing payments, etc..

Consider the expertise of the team you partner with, as well as the technology they have in place to aid in risk management, fraud detection, and compliance in a scalable way. 

Embedded finance isn’t just about technology—it’s about the customer experience. Choose a Fintech partner that prioritizes delivering a seamless and intuitive user experience. The financial products should feel as integrated and natural as the rest of your platform, with no friction for customers in accessing or using them.

, helping you troubleshoot issues, optimize your capital offering, and ensure a smooth experience for your users. This level of partnership will enhance your ability to deliver high-quality service for your customers and outstanding metrics for you.

Predictions for Embedded Finance in 2025 and Beyond

As we look ahead to 2025, the direction of embedded finance points to rapid adoption and innovation. Software companies that integrate financial services will become leaders in their verticals, reshaping customer expectations and competitive dynamics. Here are some predictions for what’s next:

1. Embedded Finance Will Become the Industry Standard

Soon, embedded finance will no longer be a differentiator; it will be a baseline expectation for software platforms. Businesses of all sizes will seek out platforms that offer integrated financial services as part of a holistic, all-in-one solution. Software companies that don’t adapt risk being left behind as customers flock to platforms that offer greater convenience and value.

2. Vertical-Specific Solutions Will Dominate

The rise of industry-specific platforms, such as Toast for restaurants or ServiceTitan for contractors, will fuel the growth of tailored embedded finance solutions. These platforms will continue to evolve into comprehensive operating systems, seamlessly integrating payments, lending, payroll, and other financial tools to address the unique needs of their industries.

3. AI-Driven Financial Insights Will Transform SMB Decision-Making

With the power of artificial intelligence and live data, embedded finance will go beyond offering financial services to providing actionable insights. For example, predictive analytics will help SMBs anticipate cash flow challenges or identify growth opportunities, further embedding these platforms into the decision-making processes of their customers.

As embedded finance grows, regulatory oversight will increase. Software companies will need to navigate evolving compliance requirements, but this challenge will also drive innovation in risk management, fraud prevention, and secure financial integration. Those working with experienced partners will be at a huge advantage, with an expert managing the complexity on their behalf.

5. Partnerships Will Power the Next Wave of Innovation

The software marketplace will continue to emphasize collaboration. Partnerships between software platforms and Fintech providers will accelerate the development of embedded solutions, making it easier than ever for SMBs to access capital, manage payments, and scale their operations.

Conclusion: Seizing the Embedded Finance Opportunity

The rise of embedded finance is more than a trend; it’s a transformative opportunity for software companies. By integrating financial services into their platforms, businesses can unlock new revenue streams, enhance customer retention, and position themselves as indispensable tools in their customers' operations.

Whether you choose to build in-house or work with a Fintech partner like Pipe, the time to act is now. 2025 is poised to be a pivotal year for embedded finance, and those who embrace the opportunity will gain a competitive edge that defines the next chapter of their growth.

Embedded finance isn’t just about technology—it’s about creating a seamless, value-driven experience for your customers. By aligning your strategy with customer needs, industry trends, and the right partnerships, you can build a future-ready platform that stands out in a rapidly evolving market.

2025 could set the perfect conditions for vertical software companies to grow with embedded finance. Here's why...

See why 2025 could be a watershed year for vertical software companies and why embedded finance could be the catalyst.

Pipe’s recipe for a successful embedded finance GTM strategy

Embedded finance is one of the fastest-growing trends for Fintech. Embedding financial solutions directly into software reduces friction in the customer experience, resulting in increased retention on those platforms. This also allows leaders to quickly create a new revenue stream without dealing with risk, compliance, and capital markets. 

There are a number of products that can be embedded these days—from payments and banking to payroll and more. As platforms consider the various options to integrate with embedded finance partners, it’s also prudent to consider how to bring this product to market in a way that drives product adoption, customer satisfaction, and long-term growth. 

One-size-fits-all is, at best, a poor fit for most. At Pipe, we believe a tailored approach is critical to a successful partnership. 

The most important step in the GTM journey is truly understanding your customers, the pain points that they face on a regular basis, and how they utilize your product. The better you know them, the easier it is to craft a message and strategy that will resonate with them. Sharing this knowledge early on helps the Pipe Marketing team identify educational content and assets that are most relatable and helpful to the end customers, and utilize messaging and tone that will resonate with SMBs and prompt them to take action. 

We also monitor customer NPS at launch. This helps us keep a pulse on customer feedback, generate customer testimonials for marketing campaigns, and pass to our sales team if any customers report a negative experience. Creating this “playbook” is typical in embedded finance companies, but it’s critical that these playbooks can be adapted and customized to meet the needs of 

Embedded marketing for your embedded product

Not only is it critical to nail the messaging, but we also work with our partners to implement these messages into their product and customer lifecycle. We have varying degrees of marketing engagements depending on the preferences of our partners. Some rely on us to share pre-approved offers that they can trigger within their marketing automations, while others use webhooks to leverage daily underwriting and present the most timely offers to their customers. 

In addition to our custom email cadences, Pipe also supports partners in integrating in-product messaging to encourage engagement directly within the platform (think tooltips, pop-ups, and banners to drive awareness of customer pre-approved offers.) We’ve found tremendous value in multi-channel marketing efforts, even adding direct mail campaigns and outbound call support for some partners. 

When customers need more assistance, Pipe’s in-house sales support can drive conversion. While our self-serve onboarding streamlines the process for the majority of customers, about 30% of Pipe customers have been sales-assisted. Advancing capital is a big decision, and some business owners want a more in-depth explanation of what’s going on behind the scenes of a few-click application process. 

The Pipe team not only provides training and support for our partners, we can also act as an extension of our partner teams to answer questions or re-engage customers when they drop off in the funnel. We’ve also found that when our sales team touches a call, it generates a 2x higher average advance than our self-serve customers. 

When selecting an embedded finance partner, consider who will also provide this embedded GTM support. At Pipe, we’re experts at marketing, educating, and selling our financial tools to small businesses. While many embedded capital providers see attach rates in the 1-3% range, Pipe’s vertical SaaS partners have seen attach rates above 13% within the first month, fueled by the kind of go-to-market support we just discussed. Feel free to reach out to me if you want to learn how Pipe can help you reach your growth targets. 

Pipe helps partners bring embedded finance to market with key GTM support tools and strategies

See how Pipe supports embedded partners with both turnkey and custom Go-to-Market support from launch and beyond to help boost activation and customer success.

Pipe's recipe for a successful embedded finance GTM strategy

How to achieve 4x higher attach rates with Pipe's embedded capital

At Pipe, we’ve always believed that the real measure of success isn’t just about having a great product—it’s about how much capital gets into the hands of real business owners. If business owners aren’t choosing to utilize their capital access, for whatever reason, there’s no benefit to them or our partner platforms. That’s why we’re so proud of the high attach rate we’ve achieved with our embedded capital offerings. But what exactly does that mean? 

Simply put, the attach rate measures the percentage of merchants who activate a pre-approved or pre-qualified capital offer after it's presented to them. This metric is critical because it shows us that we're providing real value that merchants are eager to use. While many embedded capital providers see attach rates in the 1-3% range, Pipe’s vertical SaaS partners currently see a 13.1% attach rate within the first month.

A smooth user experience is non-negotiable. That’s why we’ve designed Pipe’s platform to be 

as frictionless as possible when it comes to integration

. Each integration option—whether it's Pipe-hosted, turnkey embedded UI, or custom API—ensures that our partners can implement the solution without significant development resources, minimizing costs and maximizing speed to market so the focus can stay on what really matters—helping merchants grow. After all, when they grow, you grow, and when you offer them something they truly want and need, you build your brand into a go-to platform for them.

For the merchants themselves, we’ve made accessing capital as easy as a few clicks. They don’t have to jump through hoops or leave the platform they’re already comfortable with. This kind of seamless experience isn’t just nice to have—it’s essential for driving higher attach rates because it builds on the trust merchants already have in your platform and removes the complexity and friction of getting capital. And it’s made possible by the way we underwrite.

Traditional lenders often overlook businesses that don’t fit into neat boxes, but we see things differently. By shifting our focus away from traditional credit scores and toward real-time data like revenue and cash flow, we're opening the door for a wider range of businesses—many of whom might not have had access to this kind of financing before.

Many small businesses may not have years of history—or the accounting and support staff to wrangle piles of paperwork—but that doesn’t mean their businesses aren’t worthy of access to capital. By measuring the actual transaction patterns, our models can pre-approve merchants for the capital they deserve without many unnecessary friction points.

This approach isn’t just about inclusivity (though that’s a big part of it); it’s about recognizing the true potential of businesses that might be overlooked by the old guard. And it’s paying off—by offering capital to more merchants, our partners are seeing a boost in attach rates that reflects the real demand out there.

Success doesn’t happen in a vacuum. That’s why we go the extra mile to support our partners with content that educates and engages their merchants. We don’t just drop a capital offering into a platform and hope for the best. Instead, we equip our partners with everything they need to explain the benefits of embedded capital in a way that clicks with their audience.

 is tailored to meet the needs of each partner and their merchants. Whether it’s nurture and lifecycle email campaigns and direct mail, white-labeled content marketing, or in-product messaging across your platform surfaces, we want to ensure your merchants are aware of their offer exactly when they need it and can activate it as easily as possible. 

If you really want a successful embedded financial product, an embedded go-to-market team is crucial. Our dedicated sales support and customer success teams work hand-in-hand with partners to onboard merchants and ensure they’re getting the most out of what we offer. While nearly everyone can self-serve through our funnel, there are always edge cases where merchants need a hand sorting out a bank account or a little extra clarity about a question they have. 

Seeing is believing, and our partners have seen the impact of seamless UI and go-to-market support in their numbers. Take Priority Capital, for example. After launching a new capital product powered by Pipe, they saw their attach rate increase by ~30% with Pipe’s tailored revenue team support, compared to a control group. For many SMB owners, accessing embedded capital this way is so easy, that they want to talk to a person to make sure it 

“Pipe’s dedicated GTM support team was first class in its proactive approach, providing tailored strategies that perfectly aligned with our product's needs. Our collaboration on deep market insights and hands-on guidance significantly streamlined the go-to-market process, making the product launch smoother and more effective.” - John Grebe, VP of Product Strategy at Priority. 

Ultimately, it comes down to more than just a good metric. The goal is to deliver real growth for small businesses through the platforms they use to run their operations every day. Another vertical SaaS partner not only saw an attach rate even higher than average, they also saw merchant revenue increase by an average of 15% in the first two months after taking an advance. SMBs need working capital, and they need platforms that will partner with them to make it more accessible.

Our high attach rates aren’t just numbers—they’re proof that when you make it easy for partners to deliver real value, everybody wins. By providing seamless integration options, innovative underwriting that expands access, and dedicated go-to-market support, we’re not just another embedded capital provider—we’re a true partner in growth.

Whether you're looking to enhance your platform’s offerings or help your merchants seize new opportunities, Pipe is here to help you unlock new levels of success. Let's connect and see how we can grow together.

 Average rate across our vertical SaaS partners in the US.

Pipe helps partners achieve attach rates well above industry average with a seamless user experience, tailored underwriting, and GTM support

See how Pipe helps partners achieve attach rates 4x higher than industry averages with one of the most merchant-friendly embedded capital solutions on the market.

Will Embedded Finance Make Software Companies the New Community Banks?

This article was originally published on 

It’s hard to overstate the importance of small businesses to our economy. They account for nearly half the private sector jobs and almost as much of GDP. Keeping small businesses healthy is in the best interest of all of us, and yet many have a very difficult time accessing the capital they need to operate and grow. 

For these small businesses–with anywhere from a few employees to a few hundred–

 isn’t just a challenge; it’s also a necessity. They’re often at the mercy of seasonality and typically don’t have the kind of cash cushion that larger companies do. 

For the smallest of these companies, a dip in cash flow or the loss of just one or two team members can endanger their ability to operate and keep the doors open. The need for access to working capital is very real, but so is the struggle to get it. The one source that has historically worked for small businesses is starting to disappear. 

Traditionally, these small enterprises relied heavily on their relationships with local banks, credit unions, or Community Development Financial Institutions (CDFIs). These institutions provided a lifeline, especially when the size, structure, or maturity of the business made it challenging to secure funding from larger lenders. Unfortunately, over the past decade and a half, these smaller community banks have experienced significant headwinds, leaving small businesses struggling to find the financial support they need.

In the aftermath of the 2008 financial crisis, small banks faced numerous challenges, while larger counterparts benefited from government interventions. The crisis had an especially big impact on small banks, while subsequent government interventions like TARP and the Dodd-Frank Act disproportionately benefited larger financial institutions. It’s an eerie parallel to the trouble smaller businesses have in dealing with some of the burdens bigger companies can more easily handle.

With decreased profit margins and increasing compliance costs, small banks have not been able to devote the same level of resources to crucial functions like lending to small businesses. This regulatory response left small businesses that once relied on local banks at the mercy of large conglomerates, which often implemented one-size-fits-all lending policies that didn't cater to the unique needs of small enterprises. 

With many smaller banks sticking with what they know and working with a decreased risk appetite, there are fewer options for many businesses in need of funds. Fortunately, there are financing platforms that still understand what it’s like to run a small business and are quickly increasing their offerings.   

Trips to the bank are becoming less and less frequent as businesses accept more card 

 and manage more of their business life online. In fact, software platforms are becoming the new “watering hole” driving capital into small businesses. It’s here that small business owners run their businesses from end to end and get the support they need. 

If we look back just a few years ago, most software was horizontal. Payment platforms were for payments, scheduling tools were for scheduling, and payroll software was only for running payroll. Today, software is verticalized, allowing business owners to do everything in one place. For example, restaurant owners can use Toast (or, even more specifically, pizzeria owners can use Slice) to accept orders, process payments, run marketing, and more.  

Until recently, the missing piece has been capital. But fintech is changing that. Vertical software platforms hold the deep industry knowledge and transaction data they need to become the new community banks on a much more niche level. Let’s talk about what that looks like.  

 falls short for small businesses when it’s designed to fit much larger ones. For example, many traditional bank loans are based on credit scores, two or more years of financial statements, and some type of collateral assets. Even SBA loans require a minimum of 3 years of business history. For younger and smaller businesses, any one of these elements can be a barrier to accessing financing, whether they deserve it or not. 

Modern fintech makes it possible for financing to be underwritten directly from transaction data, reflecting a small business’s true ability to pay back the funds. I’ve seen this work very well with as little as six months of data, making it a much better fit for young businesses. With live revenue data as the basis for the decision, collateral is no longer needed to reduce risk, which is also a welcome change for small business owners. 

This kind of transaction data is exactly what vertical software companies have in spades. As the operating platforms helping SMBs run every day, they have the first-party data needed to successfully underwrite small business loans with very reasonable risk levels. All they’re missing is the expertise in capital and the right models for 

. This is where a fintech partner comes in. 

 connects businesses or consumers to financial services through non-financial platforms. In this case, vertical software platforms are the perfect connection point, allowing business owners to 

 in the same place where they run their operations and accept payments every single day. 

,fintech lenders can ingest all the underwriting data they need, eliminating most of the cumbersome manual application steps and cutting out the middlemen from the customer's perspective. They can access the capital they need on the platforms they’re already using. Not only that, but capital also becomes seamlessly connected to the tasks that require it, like accessing capital for inventory inside of your inventory management system or the capital to cover payroll inside of your payroll software. 

This is what it looks like when niche software platforms increasingly serve the roles traditionally played by community banks for their unique industries. With the help of embedded financing, likely built by fintech partners, they can offer financing solutions that are tailored not only to small businesses, but even to the specific industries they serve. As more vertical software adopts embedded finance, the need for small businesses to go to traditional financial institutions decreases. And as these platforms expand to offer broader services within their industries, they gain additional data points, allowing for even more tailored and bespoke financial solutions, all accessible in one place. 

Discover how embedded finance can transform software companies into the new community banks.

Discover how embedded finance can transform software companies into the new community banks, providing small businesses with seamless access to capital.

How Risk Teams Can Help Drive Product Innovation

For the smallest of these companies, a dip in 

 or the loss of just one or two team members can endanger their ability to operate and keep the doors open. The need for access to working capital is very real, but so is the struggle to get it. The one source that has historically worked for small businesses is starting to disappear. 

Traditionally, these small enterprises relied heavily on their relationships with local banks, credit unions, or 

Community Development Financial Institutions

 (CDFIs). These institutions provided a lifeline, especially when the size, structure, or maturity of the business made it challenging to secure funding from larger lenders. Unfortunately, over the past decade and a half, these smaller community banks have experienced significant headwinds, leaving small businesses struggling to find the financial support they need.

In the aftermath of the 2008 financial crisis, small banks faced numerous challenges, while larger counterparts benefited from government interventions. The crisis had an especially big impact on small banks, while subsequent government interventions like TARP and the 

 disproportionately benefited larger financial institutions. It’s an eerie parallel to the trouble smaller businesses have in dealing with some of the burdens bigger companies can more easily handle.

See how risk teams leverage AI and machine learning to enhance product innovation and streamline underwriting.

See how risk teams leverage AI and machine learning to enhance product innovation, streamline underwriting, and provide tailored financial solutions for SMBs.

"

Hear From The Experts

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How to achieve 4x higher attach rates with Pipe's embedded capital

Will Embedded Finance Make Software Companies the New Community Banks?

How Risk Teams Can Help Drive Product Innovation

Can Embedded Capital Democratize Credit Access with Unbiased Data?

How to unlock financial data as a growth tool, no matter your business size

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