What the 2026 Embedded Payments Benchmark reveals about vertical SaaS

Speaker A: Hey, everybody, and welcome to another episode of the Payment Strategy Show. I'm Joshua Silver, founder and CEO of Rainforest. Here at Rainforest, we help software platforms embed payment processing into their core product to help them grow revenue and improve customer retention. One of the most frequently asked questions that I get in embedded payments is what does good actually look like? For example, what's a good take rate for field services platform? What's or what's a good adoption rate for a healthcare platform with 500 million in annual processing volume? Well, until now, we could only provide anecdotal data, given our experience as founders and consultants and operators. We did have visibility into quite a few platforms and we recognized patterns, but we were always still limited to the lived experience of our team members. There was no organized data set, There was no real benchmarks. So we went out and we built it, and now we're ready to share what we learned in that study. I'm, um, here today with Brooke Smith, who led our 2026 vertical SaaS embedded payments benchmarking study. Brooke, welcome to the show.

Speaker B: Thanks for having me.

Speaker A: So, Brooke, let's jump right into it. Tell us a bit about the study.

Speaker B: So, to the best of our knowledge, this is the first ever independent benchmarking study of embedded payments performance in vertical SaaS. We surveyed hundreds of vertical SaaS platforms. There were no provider incentives and no selection bias toward any single ecosystem. We used a few firmographic indicators to target vertical SaaS companies that were most likely to have material payments volume. But aside from that, the sample is completely neutral and random. And it spans the full range of vertical SaaS. So nine named verticals as well as an other category for anything that didn't fit into one of those nine ARR from less than 10 million to over 100 million. And processing volume ranged from under 10 million to over $10 billion a year. Um, and the payments programs are ranging from brand new emerging programs less than a year old, to established payments programs that have been live for more than five years. The other thing that makes this really unique is that the respondents are operators with direct line of sight into payments performance. So 76% of the individual respondents have direct access and responsibility for payments metrics, and 87% are either the primary or shared decision makers for payment strategy. These are the people running payments programs, not bystanders or observers.

Speaker A: So really we had quite a wide range. Brooke, it sounds like of, uh, respondents to the survey. All shapes, all sizes. This really is comprehensive.

Speaker B: It is. And actually one of the biggest surprises, you know, initially for me is That a little over half of the respondents were in that 10 million to 50 million ARR band, which is fascinating because we did not target based on ARR.

Speaker A: So interesting. I mean, I'm not entirely surprised given my experience in payments. You know, I think, Brooke, if I had to venture a guess by 10 million in ARR, you typically know who your customer is. You've built a sticky, a, uh, comprehensive product. You've certainly found product market fit. It's also, I think, an inflection point where you start to have the resources to actually invest in a payments product and not just kind of bolt it on or do the very basic integration. Uh, I mean, you know, companies at that size I would imagine are starting to make more strategic payments decisions that will really impact their growth, their revenue model, their durability. So again, I'm not, I'm not entirely surprised, uh, by that.

Speaker B: I agree. And I think that a lot of the findings that we're going to talk about over the next 20, 30 minutes are going to reinforce your theory. Um, but another thing that was really interesting, we asked how are companies benchmarking their performance right now? Are we the only ones who didn't have data or is this actually a problem across the whole industry? And it turns out 79% of platforms are benchmarking against their own historical performance, which of course makes sense. That's going to tell you, are you doing better than you did last year? Year and 72% are relying on data from their payment provider.

Speaker A: Oh, interesting. I mean, I think that's, you know, not only is that really a conflict of interest, but I think you have a very limited viewpoint because I think typically in my experience, the payments providers benchmarks rely on their client data. And so you're kind of being benchmarked against other clients who happen to use the same payments provider. Well, what if that payments provider isn't very good? You're not really getting a comprehensive viewpoint. Uh, and so I think this is in my mind, Brooke, like a really groundbreaking study because most of the data is actually not from rainforest clients. It's actually from the broader industry given how big the payments market is. And so there's no real bias in a rainforest client or a stripe client or any other type of client. It really is the collective SaaS market. So I think that's why, you know, I certainly view this as a very objective, uh, you know, cross industry, uh, benchmark. So I'm curious, once you got into the data, what are some things that jumped out at you?

Speaker B: Yeah, so I think the Biggest thing is the gap between desired payments adoption and actual payments adoption. So 78% of the platforms who responded are targeting a 71% adoption rate or greater in the next 12 to 24 months. But only 25% of respondents are currently performing at that level.

Speaker A: Wow.

Speaker B: Most platforms were between 15 and 30 percentage points before below their self reported target and that gap held across verticals ARR bands in pretty much any way. I sliced the data, um, digging a little deeper when we Asked about challenges, 62% of respondents said that adoption and attach rates are one of their biggest challenges. And that was especially prominent among platforms who were earlier in their payments journey.

Speaker A: I'm actually surprised in some ways that this, that it's only 62% because you know, across 50 plus consulting engagements that uh, I did when I was running my, my consult payments consulting firm, you know, across all of rainforest clients, adoption I think really is the biggest challenge if you only had to choose one. So I'm actually surprised that more people didn't say it. But, but 62% is still pretty, pretty uh, significant. You know, I wonder, you know, part of it could be in this industry, especially with repeat payment leaders. They've learned a lot of lessons the hard way. Um, and I think they've shifted from take rate meaning how much they're making per payment to adoption because ultimately a percentage doesn't pay the bills, your dollars do. And ADOP is how you drive that the most. Um, I love seeing that so many of these Companies are targeting 70% adoption rate though I think if we had run this survey probably five years ago, I don't think we would have seen that. I think that the industry as a whole has said let's, let's level up, you should be getting higher uh, adoption rates. But still there's that huge gap. Only 25% uh, of platforms are achieving it. So still a long, a long way to go.

Speaker B: Absolutely. And I'm glad that you called out that. 62% seems a little low because one thing that we will get into, um, we go into this deep in the report itself is how that changes over time. And for platforms that have had payments for five years or more, they're mature, they have a payments leader in the C suite. I don't think it's actually that adoption stops being a challenge. I think it's that they have solved it like they have figured out the playbook, they're executing on the playbook continuously. So it never stops being hard. It's just that this elite set of mature platforms has Cracked the code. So I think that kind of walks us into the question of what's the difference between the companies who are actually achieving that 70 plus percent adoption rate and those that are still working to get there. Based on your lived experience, what do you think it is?

Speaker A: I hate being put on the spot. I'm usually the one putting people on the spot. But no, my guess is it's probably some combination of the payments leadership. We're getting to the second and third generation now of payments leaders who have been through two and three companies and they've seen it, they've done it, they know what they need to do. Um, but also the level of investment, I think we talked about bolt on payments before, where you just stick payments on and hope it works and then there's really investing in it cross functionally. Whether it's the integration, whether it's the rollout, the marketing, all of those, my guess is it's probably some combination of the two. But what did the benchmark say?

Speaker B: So actually the data agrees with you. Um, because I think, although we never specifically asked what does investment in payments mean? Success does leave clues and we got to see a lot of those clues in the data. So the first factor is time. So for all the operational benchmarks, you know, attach rate adoption, rate active adoption, which the way the survey question was worded is of the merchants who have signed up for payments, what percentage are actually using it? So time matters. Um, right, but only to a point. So for the first, say three to four years after launching payments, those metrics are going to improve year over year. A company that's had payments for two years is going to have higher participation than a company that just launched it. And a company that's had payments for three or four is going to have even higher. But once we get into that five plus years of payments age, that's where we really start to see the difference between the companies that invested and the companies that didn't. So we asked respondents to self classify as either emerging, meaning they had a relatively new payments product, or scaling such that they are actively working to provide the best merchant experience, drive adoption and optimize take rates or optimized, which means they've got it figured out, they have very high participation, they have take rates that they're happy with. And when we get to that five plus year mark, there's a noticeable difference between the companies that identified as scaling versus optimized. So for that scaling cohort, median adoption was at 63%, attach was at 78% and active adoption was 63%. For the optimized cohort of the same age, we're looking at about 15 percentage points higher across all the benchmarks. So 78% median adoption, 93% or higher median attach rate, and 93% active adoption. So early on, age and maturity track together. Like, there's some maturity that platforms get just by having payments and putting in the repetitions. But once you get to about 5 years in market, you really need direction and targeted investment to get to those 70, 80, 90% numbers. Is this consistent with what you saw as a consultant and as a payment provider?

Speaker A: I would definitely say it tracks well. I mean, operationally, structurally, what separates the platforms who get adoption from those who don't, in my anecdotal experience, is when you have payments as a feature, you're not going to get as much adoption versus when payments is integral to the platform. You know, another word I use is the right to win that payment. If you're naturally in the flow and you've done a good job of integrating it, you're going to get more payments. You just are. Um, I think the second thing is positioning and messaging. How are you talking about payments? Is it just, you know, as easy as Uber, you close the door and get paid, or are you talking about, here's your payments rate and here's all these other pieces. So that, that makes a big difference. And then finally, I think that the merchant experience, uh, it's really big, right? It's not just the payer, but also the merchant. Because if the merchant has a good experience, they're much more likely for the payer to also have a good experience and for that merchant to refer the payer to, to use their system. So I think the lesson here, uh, if I kind of take, you know, the, the points that I'm making, plus what the benchmark said, if you've had integrated or embedded payments for five years and you don't have at least 70% adoption, you are behind, right? That's against benchmarking your page. You are behind. Waiting is not the right strategy. Like, you need to get going on adoption. Now.

Speaker B: That's absolutely true. And I think one of the interesting ways that the data kind of illuminates this is that the nature of the adoption challenge changes throughout that payments lifecycle. So for emerging platforms, the challenge is with attach rates. Emerging platforms had a median attach rate of just 33%, um, versus scaling platforms at 63% and optimized, of course, at 93%. So when you look at the very Beginning of the payments journey. If only 33% of new customers are signing up for payment, those platforms are kind of compounding a pretty big back book adoption challenge for their future selves. Um, because if only 33% of new customers are signing up, that's 67% of new customers that in a year or two they're going to be established customers. And then you have to go out and win that payments business. And I think payment leaders I've heard describe this as hand to hand combat or as a street fight. It's so much harder to go out and win that business later. And it shows in the numbers because once we get to scaling and optimized phases, attach rate outpaces adoption.

Speaker A: So it's really the punchline. It's so much easier to drive attach rates during the onboarding experience. And so if you had to just pick one thing on the product to optimize that onboarding piece and make sure that your attach rate is as close to 100% as possible, almost an opt out versus an opt in, you are going to be so, so much better in the out years because you're not going to have to go to that back book and to use your word, do hand to hand combat there. Um, also I think that as the back book is bigger and bigger, you have to invest disproportionately more resources to go get it because it's a bigger problem. And so that optimization up front is absolute. That is the best dollar you're going to spend on optimizing is getting that attach rate at onboarding. Right?

Speaker B: Exactly. And it compounds over time. So a platform that is able to optimize their attach rates in a couple months is going to be in a much better position than a platform that takes two, three, four years to figure it out. The other thing that I think you mentioned a few minutes ago, and I'm excited that we can dive into it a little deeper now, is that creating a really high value experience for the merchant. And um, the term I'm kind of landing on to describe this is integration depth. Um, because of course there's the sort of, at one extreme is the bolt on payments. You bolt it on and it doesn't really talk to the rest of the product. And at the far other end, you think about the mind body experience or the toast experience where payments is so integral to the product that a yoga studio owner or a restaurant owner cannot even imagine using that core product without using payments. And one of the best sort of proxies for integration depth that I found is the use of real time payments data in the software. We asked a few different questions about this and I was surprised to find that every single one of them correlated to attach rates, adoption rates and active adoption. So what this means. Platforms that view access to real time payments data as a strategic priority were 15 to 30 percentage points ahead of platforms that view it as only somewhat important. Platforms that have consistent access to accurate real time payments data were 15 to 30 percentage points ahead of platforms that had sometimes access to real time accurate payments data. And then the platforms that were using that payments data the most had the highest attached adoption and active adoption rate. So we look at, you know, business intelligence and analytics, dashboards, automated reconciliation, invoice and payment tracking, cash flow forecasting, workflow automation. There was no one use case that jumped out as like this is the use case that drives adoption. But platforms that were supporting five or more of those outperformed platforms that were supporting just 3 or 4 or 2 or less. And again that was a 15 to 30 percentage point spread.

Speaker A: So that's really significant. I mean a couple things. One, I 100% agree, real time data use is a good proxy for integration depth. I think there's two pieces of that even to go further. One is, is your payments provider making the data available in real time? Because many payment providers today, even in 2026 as we record this, still don't have real time data available and it's batched on a daily basis. And so you may be a day delayed before you can get your payment data. And that's just crazy in today's world, but it happens. Um, the second is what are you actually doing with the data?

Speaker B: Right.

Speaker A: It's not just enough to have it, but are you putting it in dashboards? Are you using it to mark invoices as paid? Are you using it to um, drive other workflow that a payments come in? Something's happened, maybe it was a part, partial payment, et cetera. But again, that all kind of comes back to Brooke choosing a good payments provider, that really matters because if you can't get the data, who cares what you can do with it? You have to be able to get to it. Um, beyond the real time data, any other interesting findings that you came to with regard to attach rate adoption activity?

Speaker B: Yep. There's one other really big one that I'm so excited to share with you and that is the role of the payments leader. So when we're talking about these operational metrics platforms with a dedicated payments leader in the C suite outperformed uh, companies with no payments leader and companies that had a dedicated payments leader. But that payments leader was in a functional silo.

Speaker A: So really leaders need to be empowered. Right. The organization needs to, I think you're saying the organization needs to be aligned. It's really hard to achieve that if the leader is sitting in a functional silo, meaning know, in a product role or in a sales role or a marketing role or finance role. You, you really need someone that's elevated to that C suite that can be cross functional and help make sure that this is a strategic priority. Is that right?

Speaker B: Yeah. And that's my hypothesis as well because there was on the operational metrics, there wasn't a huge difference between no payments leader and a functionally siloed payments leader. And I think it's because adoption is a team sport. It require coordination. This coordinated effort from product engineering, marketing, sales success, operations. It really requires everyone to be swimming in the same direction. And it's so hard to drive that alignment if you're sitting in a product org or in a finance org.

Speaker A: Yeah, uh, that makes sense. So let's talk a little bit more about financial metrics. The take rate, percentage revenue for payments. What did you see there?

Speaker B: So this is actually where the non C suite payments leader becomes really, really interesting because on take Rate there's actually a sort of three tiered breakout where the platforms with the C suite payments leader did perform the best, but the platforms with a dedicated payments leader in a functional area were only about 15 bips below on take rate. And then there's a significant gap when there's no payments leader. So I know one of the payments leaders, um, who spoke, I believe at Vertex had said, you know, payments adoption is something everyone participates in and take rate is something that the payments leader optimizes. So like uh, align the whole organization around adoption and let the payments leader optimize take rate. And I think the data validates this approach because it shows that having one person who is just thinking about take rate night and day makes a huge difference in actually moving that number.

Speaker A: Yeah. So it, you know, I think it's, it stands to reason, I think especially investors historically have been so focused on that take rate because they want to make sure payments aren't commoditized. You want to make sure you're making money. And so historically I think that was the one metric they looked at. And so a functional leader was, it seems like mostly good enough to get that job done. But as the industry has evolved and we've all realized actually adoption is what matters most, because adoption times your take rate is your actual revenue. Right. In isolation. Who cares what your percentage margin or anything else is if you don't have any volume? As we move to that, it becomes more and more important to elevate that payments leader into the C suite. Um, and so that, you know, also I think kind of corresponds to the rise of what I would call the professional payments leader. You know, I think historically, five, 10 years ago, there really were almost no heads of payments. It was always a product manager that, you know, was wearing a, you know, payments hat off the side of their desk or a finance person that kind of looked after their payments contract. Um, but now we've really have these heads of payments that have again, second, third generation, been through two, three, four companies and have seen there, uh, and done that.

Speaker B: Yeah, I think that's spot on. And I think we are witnessing this evolution in real time right now. Um, but the no leader ceiling is very real. Um, along the among the scaling cohort, which was the sort of largest maturity cohort in the study, the platforms that don't have a dedicated payments leader at all are trailing on every single metric.

Speaker A: So if you're a scaling payments company or, uh, a platform that's scaling with, uh, trying to scale your payments and you don't have a dedicated payment leader, the data suggests go out and hire one. Assign them the resources they need. So get the onboarding right. We talked about that earlier. And make sure you hire a good payments leader.

Speaker B: Yep. And if you're serious about adoption, you're hiring a payments leader for the C suite. You are hiring a head of payments who's going to be on that senior leadership team in the meetings, you know, talking to the CEO and working cross functionally.

Speaker A: So tell me a little bit more now, Brooke, about more mature platforms. We've talked about the early ones and what they need to do. We've talked about the scaling ones. But for platforms that have solved the back book, they have a dedicated payments leader they've been compounding for years. What does that cohort look like? I bet it's pretty exciting.

Speaker B: It is. So, you know, they were a relatively small group of the sample, only about 16%. Um, but they are doing something meaningfully different. You know, the. They are the majority of platforms who have topped 71% adoption. Their median adoption rate is 78%. Median attach rate is 93% or even higher. Active adoption is 78%. Their median take rate is over 90 basis points. And at the median, they're earning 35% of their total revenue from payments. So they have very high adoption near universal attach rates. And payments is a material revenue driver. It's driving more than a third of that company's total revenue.

Speaker A: Really. I think the holy grail of embedded payments right there. So that, that 16, uh, percent of companies, they've, they've hit it, they've optimized their payments programs, they're continuing to grow through new customer acquisition. But they're always thinking what's next? Let's talk a little bit about expansion of the finance offerings because that's always, I think, what comes next.

Speaker B: And I think that for these platforms, um, once payments is optimized it's more fintech. So 52% of the platforms that we surveyed don't have any fintech beyond embedded payments. So this is a huge opportunity for the majority of platforms. Um, so the platforms that do have embedded fintech, um, you know, capital lending is fairly popular, embedded payroll and bill pay or accounts payable automation. But this is really going to be use case dependent. Um, it's always going to be a question of what do the merchants need, what problems can the platform solve and where do they have the right to win.

Speaker A: Yeah, I think that that makes a lot of sense to me. You also want to do it at the right time, right? You don't want to spread your resources too thin by doing it too early. You uh, know this, this concept of fintech expansion really makes sense. Once you've gotten payments right? So do all the things we talked about, get the UX onboarding right, get your payments leader in the C suite, do all these things, then you can move on to the other thing. Scale and optimize payments first, then build more fintech on top of it.

Speaker B: Absolutely. I think expanding to additional fintech too soon is a great way to never reach the full potential of a payments program.

Speaker A: Well Brooke, this has been absolutely fascinating. There's a lot more data I know in the benchmark study. Where can people find the full report?

Speaker B: On our website, rainforestpay.com benchmarks and we'll have the link in the show notes below.

Speaker A: Very good. Well Brooke, thank you so much for being on the show and thank you so much for all the hard work in putting this benchmark study together. Um, it truly is one of a kind in the industry. I've been in payments almost 20 years and have yet to see anything that comes even close to both the depth and the breadth of this benchmark. So definitely be sure to go check it out. Thanks again Brooke for coming on the show and for the work on the report.

Speaker B: Thanks for having me.