WEBVTT
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Hi, everyone. I'm Daniel. I'm on Stripe's professional services team,
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and I talk to SaaS platforms every day about embedding payments into their
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software. In those conversations,
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I talk to platforms with a range of experience in pricing,
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from underpricing and leaving money on the table,
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to overpricing and losing deals to competitors. But today,
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I'm giving you a framework to make sure your business lands in that just right
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middle of that spectrum.
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Many platforms approach pricing like a checklist: pick a rate,
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add a markup, done.
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But a real pricing strategy has more moving parts: your costs,
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your revenue goals, your competitive position, but, most importantly,
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your platform's unique business context.
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So whether you're just starting to embed payments or you've been doing it for
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years, my goal today is simple: to give you a clear,
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actionable framework to help you maximize payments revenue for your platform.
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And I'm not doing this alone. Joris, who's head of payments at GoodLeap,
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will join us later to walk through how he navigated all this from scratch.
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So here's the thing about pricing payments.
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A lot of you in the room probably are resonating with the title of this slide,
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why it feels hard. There's a lot of variables,
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and they all interact with each other. You change one thing,
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and everything else shifts. And that's what makes this hard.
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But it's also what makes it worth getting right.
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So let's get into those variables now. Your costs.
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So interchange costs can vary. Card mix can change your costs overnight,
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and that's real money on the table. Your business:
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are you optimizing for attach rate or take rate?
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Margin or market share? Your customers:
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are you servicing maybe enterprise customers versus
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SMBs, or do you have a mix, and you have to know that,
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and you have to make those strategy decisions based on that mix? And finally,
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the most volatile: our market.
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Say your competitor just dropped their pricing by 20 basis points.
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What do you do? Do you hold firm? Do you make a change? Something else?
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So the question is: how do you build a pricing strategy that drives revenue,
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but stays flexible enough to adapt when the market moves?
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And it will move, guaranteed.
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Because here's the thing-every month you wait to get this right is revenue
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you're not capturing. Or worse,
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it could be deals you're losing to competitors who've already figured this out.
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That's where our payments pricing framework comes in.
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It's a practical playbook with built-in levers to adjust when new challenges
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show up. Over the next few minutes, we'll walk through the core four stages:
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research and
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benchmark,
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target,
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launch,
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last,
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feedback and iterate, stage four. And think of this as a loop.
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So this is not a "one and done" thing.
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And you'll always be in one of these stages. They often overlap,
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and each pass sharpens your approach. Now let's dive in. Stage one: research
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and benchmark. First, get comfortable with the payments landscape.
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So that slide I showed earlier where all those variables,
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understand what all of those are and what they mean for your business.
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Research what makes up payments, how pricing works, what drives costs. Again,
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those variable rates versus fixed fees, network costs,
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and where you have margin to work with. You need to know your market.
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So what are the pricing norms in your space,
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and where would your price sit compared to those norms? For example,
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if you put a nonprofit platform and an ecommerce platform side by side,
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those price points are very different.
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You also need to look at your competitors. Are they offering payments?
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How do they price it? What levers or incentives are they using,
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and how do they go to market? Talk to your customers.
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I think we all know this, but customers can give you the greatest feedback.
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So if any of those customers have recently left competitors,
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ask them why they left. Was it because of pricing?
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Don't repeat the same mistakes that push them away from those competitors.
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And this can take many forms,
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but even running simple research sessions with those customers gives you that
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specific data set to use when you go into your pricing strategy talks.
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And this stage comes first because it's honestly the most important.
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If you get stuck at any point along this journey,
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come back here and follow these three points.
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Stage two: target. So you start by gathering your stakeholders,
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and that's bringing together the right people.
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And that might look unique to your org of who that is,
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but make it clear this is a company-wide effort, right?
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It's not just a payments team thing. Everyone should be looped in.
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Everyone should have a seat at the table.
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I've seen platforms be most successful when you have buy-in all the way up to
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the founders and CEO, and you treat payments as a company metric. Again,
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it's not just a payments team thing.
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Invite decision-makers and a few healthy skeptics-they're good to have at the
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table too-from finance, product, go-to-market, and support.
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Next, you need to define your target. So kick off with a margin goal.
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Let's say something like "50 basis points." Start there. Or even a revenue
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milestone: "X amount of dollars in the first year." Start there,
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and have the conversation, see where that takes you.
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And talk through how the application of that, a take rate, an attach rate,
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will help you get to that goal.
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And decide how you'll measure success. So that target in the previous step,
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it needs to be measurable.
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You need to come back to that over time and see how you're tracking against it.
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So if you're targeting margin, let's say a good starting point
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is:
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"Payments revenue minus payments cost." And then add on any platform-specific
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rules or maybe accounting requirements that you need to on top of that.
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And the goal here is to walk away with a clear target and stakeholder buy-in so
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you and your cross-functional teammates stay accountable.
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Step three: launch stage. So now you're going to market,
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but you need to ramp your organization first. So you roadshow your strategy,
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and this is where you train your teams, preview the new offering,
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and gather feedback. This is also a feedback stage.
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So make sure you hit the three big customer-facing groups-this is usually sales,
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marketing, support-and use your support team
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as leverage here. They hear from customers in real time,
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and that's gold when you're refining messaging about pricing. Even better,
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roadshow your strategy at a company all hands meeting.
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Have everyone hear at the same time and sort of get that momentum.
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Plan for every channel and every interaction.
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So think about where will questions about payments pricing come up,
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and are those teams equipped to help? Again,
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this is back to roadshowing your strategy,
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making sure everyone is on the same page. And remember,
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when you do these launches, they get easier each time.
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So the first one might be your initial payments offering.
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This is like a really big launch, right? High stakes.
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But you'll do lower stake launches after that.
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You're adding new payment methods, you're making tweaks to your current pricing.
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So those follow-ups are less risky but can really boost your margins.
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So those are just as important. Feedback and iterate.
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This is our last stage in the framework.
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So it's your steady state that your platform sits in until something pushes you
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back to an earlier stage. So remember that. So first, review the performance.
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Going back to that measurable target that we talked about at the beginning,
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this is where you look at that again, talk to your stakeholders,
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and see if it still makes sense. And that's the most important part here.
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So does that original target make sense? Should you adjust it?
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Should you segment it by cohorts? How should you handle it?
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And you'll level up as you learn and as your payments business grows.
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So you also need to keep the feedback flowing.
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So we've been doing feedback throughout the framework here.
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But make sure you have regular loops to hear from sales, support,
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any customer-facing teams so you're always hearing what the market wants and
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what your customers are asking for. And lastly,
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be ready to update.
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So this is about being prepared when you inevitably need to do an update-and you
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will have to do an update at some point.
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So agree on a cadence for pricing changes, right?
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A good rule of thumb is to schedule a biannual pricing change release.
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You might do this later in the journey,
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but it's a good place to start at the outset.
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And also decide how you'll announce those updates.
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So this is just as important as the update itself, is how you're announcing it,
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where you're announcing it. So is it in-app, email,
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face-to-face with CSMs or your sales team?
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Updates should feel intentional and coordinated.
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And that's the loop: research, target, launch, iterate.
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Every pass gets sharper. Every cycle captures more revenue.
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Now,
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let's talk to Joris about how he built payments pricing strategy at GoodLeap
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from scratch-o playbook, no precedent. So let's hear what he learned.
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Great to be here.
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All right. Welcome, Joris.
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Thanks so much.
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Glad to have you here. Yeah. Can you quickly introduce yourself,
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and tell us a little bit more about GoodLeap?
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Yeah. My name's Joris. I lead the payments business unit at GoodLeap.
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We're a company that does solutions for the sustainable home improvement space.
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So think about solar and batteries, but also windowing, heating,
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and air conditioning.
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And then we provide financing and software both for contractors as well as for
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the homeowners themselves.
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All right. So I just went through the framework. So think back,
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start at the beginning.
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When GoodLeap was deciding to build out your payments product,
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where did you start?
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Yeah. By the way, this is the first time I'm seeing the framework.
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It' great to see it. It's a good framework.
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And I think we're somewhat closely aligned to it, but lots to learn also.
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So we started with a lot of humility, really.
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We have a lot of people from different payment companies at our company,
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but nobody had really done platform payments yet as we're doing right now.
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So there was a lot to learn.
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First thing we did was a lot of research with our contractor base.
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So we sent out surveys, we did external market research.
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The second thing we did was we really dug into what does the cost structure look
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like for a payment? Thinking about, hey, what's the processing fees,
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the network assessments, the interchange,
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how does it work with different payment mixes?
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The cards are not the only payment method,
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looking at other payment methods as well.
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So really educating ourselves around the cost of a payment.
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Yeah. And we talked about competitors earlier.
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So was that a part of your process? Did you look at competitors,
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and who was offering payments?
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Yeah, for sure. Yeah. We looked at the competitors.
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I wouldn't say we have a perfect single competitor.
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Everybody does something slightly different,
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but we looked at other players in the space.
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What we found is quite a few offer payments as well.
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A bunch of them offered it just to have the functionality,
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but what you can also see quite often is that they use it really as a revenue
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line.
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And that means they priced quite highly to be able to make a lot of
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margin there. So for us, it was an insight like, okay,
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there's a lot of margin there. And perhaps when we start entering the market,
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we can price a bit more competitively as an early stage differentiator in the
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market.
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Yeah. And so you've mentioned contractors,
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and GoodLeap sits in quite a specific vertical.
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And so you talk to your contractors a lot.
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What did you learn from them about pricing?
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Yeah, a lot. Yeah. We talked to our contractors a lot directly.
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A lot of folks from my company are sitting here.
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They know we went to San Diego recently to shadow a number of contractors.
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One thing that we know that we see is that they don't really know their pricing
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very well. Some say like, "Hey, we pay 3% flat fee on cards."
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Then you look at their statement, and it's a lot more nuanced.
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They often pay more than they think they're paying.
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So they don't really know their own pricing very well.
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Another thing about our space is that the ticket prices are super high.
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So when you think about when you have a big house,
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and you're putting solar and battery and heating, you're replacing all of it,
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easy to have like an $80,000 ticket or something.
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So the median ticket price for us is many thousands of dollars.
That's not your
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average retail, not your average SaaS. So that is an important consideration,
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and contractors that are coming on our platform,
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and they want to make sure that they can immediately take these very
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high-transaction payments.
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One other thing I would say is it's pretty typical for payments platforms to ask
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for reserves. Now,
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the contracting space is a very cash-strapped space. These contractors,
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they go out, they buy a lot of material, they have to pay for subcontractors.
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A lot of that before they actually receive a payment,
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so they're constantly fronting money. So if, then,
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a payments platform comes to them and say
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like, "Hey, please deposit $20,000 to be able to take payments," that's a
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no-go for them. So yeah, reserves,
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that was another big topic that we heard from them.
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Yeah. Yeah.
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And those are great carrots when you kind of are talking to contractors of like,
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"We're not setting a reserve," or you have some things you've learned, right?
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So you have all these great data points, right?
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So how did you go from sort of discovery mode, talking to contractors,
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to actually creating your pricing strategy?
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Yeah, I would say there were two things really based on that,
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that we set for our pricing strategy.
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One was we wanted to make sure that pricing really integrated well within the
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larger offering that we had. So it has to work really well with our software,
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but also down the line, with the software of the contractor that we work with.
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Some of them have homegrown CRMs,
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it just needs to fit the workflows really well.
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So kind of that embedding with our financing, with our software,
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with the outside software, that was really important. I would say second,
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as I already hinted at, pricing a little bit more competitively,
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because in these early stages when we had a fledgling product,
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there was definitely a differentiator that we could lean into.
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Yeah. And that's, I guess,
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framing you need when you start thinking about your revenue goals.
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So how were you talking about what success looked like from a financial point of
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view?
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Yeah, there was a big push and pull with C-level leadership.
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There were pretty high margin expectations from us out the door.
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I'm not sure how realistic they were. As we went into the market,
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one thing we noticed is that
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the payments mix that we saw was a little less favorable to us than what we had
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forecasted. So for example, we saw more card-not-present,
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whereas we had really banked on card-present as the primary type of pay,
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as the primary payment method. We saw more premium cards,
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we saw a bit more ACH than we anticipated. So
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that quickly also made us establish like, "Hey,
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is this really the right thing to be shooting for these high margins out the
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door?"
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Because we could achieve them, right? It's possible,
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but then your pricing goes up and up and up.
And so,
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through a lot of conversations with-and I pushed this really hard
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actually-through a lot of conversations, we kind of reframed it and to say,
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"Let's really push on volume right now. Sure, we have decent margins,
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but volume is the primary goal, and we are growing very, very fast.
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And we know that we have a number of levers that we can use down the line to
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improve our margins as well.".
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Yeah. And we've talked about costs,
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but when you were talking about costs with stakeholders,
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was that sort of just the cost of payments themselves, like processing fees,
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or was it like a broader conversation?
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Yeah. So I mean, there's many parts to cost.
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Somebody in my company made this comparison to say like, "Hey,
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there's the cost of building a restaurant and the cost of running a restaurant."
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We were eating at a restaurant at a time, so apt comparison.
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So there's the building part, right? You need to build your software,
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you need to build your risk infrastructure,
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there's the marketing assets to produce, et cetera.
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So there's a lot of-not even just upfront, but just this first year,
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first two years-there's a lot of costs that you need to take on to set up your
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payment product. So that's kind of the building part.
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And then there's the running part, which to your point,
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there's the transacting costs, the processing costs, network fees, et cetera.
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But there's also your operating costs like support,
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your risk operations,
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all those other pieces.
One thing that we're seeing is that,
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in that operational part, so our business is growing fast,
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our payments business is growing really fast,
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but the support costs and the operational costs that we have,
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they're not growing, which is really good. In fact,
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I would say they're probably declining
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as an overall cost picture. And it's primarily due to AI.
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We're able to leverage AI more and more in different places.
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Our risk infrastructure is really heavily AI-based, which I'm really proud of,
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was really fun to build that from scratch. And on the operational side also,
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there's more and more that we can lean into AI.
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So even though our volumes are going up, our operational costs are going down,
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not just on a per-unit basis, but actual costs are going down.
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Yeah. And I love your restaurant analogy. That's like very appropriate, I think,
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for this scenario. So I have to ask,
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do you prefer front of house or back of house when "running a restaurant?".
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I've never actually run a restaurant. I used to work front of house, actually,
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at a restaurant, as a student. But I mean, both are, I think,
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critical and super interesting. To me, the building part,
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I come from a product background, I love the building part, in particular.
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And this is also such a fun time to build because with AI,
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your building goes faster and faster. There's so much you can do.
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You can also just design your product from the ground up with AI as a core
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component to it. So super fun time to build right now.
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Yeah. Yeah. Okay so, we talked about sort of
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how you built the pricing strategy, your understanding of your payment orgs,
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you're thinking about initial costs, investments, how that scales over time.
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So now you actually have to launch your payments offering, right?
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You're doing this the first time. How did you prepare your teams?
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Yeah. So this was roadshows. We went to all the different functions.
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I would say sales was very important there.
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It's actually very hard to sell payments.
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We're a company that sells financing a lot. And so you would say, "Hey,
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as a fintech, we know how to sell financial products." Payments is hard to sell.
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So we have a dedicated team of experts-one of them sitting in front here-that
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teaches the rest of the sales organization how to sell payments.
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But beyond that,
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what we also did is we set up this really interesting motion where we,
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rather than-when you talk about pricing-rather than going out with a price sheet
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and telling the contractor like, , "Hey, this is our pricing,
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it's better than the price you're currently have," et cetera,
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the first thing we do is we ask them for their statements.
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Then we take those statements,
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we run a simulation of what the cost would have been if they would have been on
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our platform, then we can come back with them, with like very concrete savings,
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where we say, "Hey, in Q1,
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you would have saved $20,000 if you were on our platform instead of your current
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platform."
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Again, by the way, a place where we have adopted AI,
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we have this little AI agent where, even during a meeting,
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we can feed those statements into an AI,
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and that gives an estimate already of the savings that the contractor would see
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if they were on our platform.
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Yeah. I love that because then your sales teams can be more comfortable, right?
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There's like in-the-moment action for them that they can immediately give
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the contractor, "These are your savings." Right?
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For sure. And a back and forth conversation rather than just like a pitch,
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which is-.
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Yeah, and I think that's great. On the go-to-market side,
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maybe from a marketing perspective,
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how are you thinking about marketing strategy on pricing?
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Do you put pricing on your website? Do you not? How did that conversation go?
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Yes.
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So our marketing team pushed really hard initially to put our pricing on our
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website. There was a lot of debate about it, but in the end,
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they're the experts, and we ended up doing so, in particular,
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thinking that initially pricing was really a bit of a differentiator that we
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had. So we did that. In the end,
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it didn't really end up mattering that much because our sales motion is really
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one where like the BDs and the sales teams,
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they sit with our current contracting base,
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and they sell the payments product to them. So our pricing existing,
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at least partially, on our website,
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didn't really end up mattering that much for our sales cycle.
368
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Yeah. Yeah. I think that's an important experiment, I guess,
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but a learning. So GoodLeap Payments is about a year-and-a-half now?
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Yeah, I think so. 2024.
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So a young toddler starting to run around.
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Yeah.
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Okay.
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So what did you learn from contractors after the launch?
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Did anything surprise you?
376
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Yeah, quite a bit. I mean,
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we're talking to contractors almost every day of the week,
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so we learn a lot continuously.
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I would say one interesting thing is that pricing doesn't come up as much
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as we thought it would once they're on our platform, right?
381
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Everyone's jealous here.
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Right, because we talked about this, you say that's not common,
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but for us it's actually not that big of a topic after contractors are on our
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platform, probably because we price fairly competitively. Second,
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we've built a really good product.
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We have-to brag a little bit-we have an NPS score around 80,
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which is considered really high. So they're very happy with their product.
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So once contractors are on our platform, they're happy with the pricing,
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they're super happy with the product.
390
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It's really about getting them through the front door
391
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on the platform itself. And so the conversations are really more about features.
392
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We're launching ways to help them solve their receivables,
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a lot of different things. They care about their reporting, integrations,
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et cetera. So that's more the nature of the discussions that we have.
395
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Yeah. And with that data,
396
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how did that change your strategy?
397
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I think you've launched some things since then,
398
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and you had some learnings there about how you would do things differently or
399
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add on more functionality.
400
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In terms of pricing, in particular?
401
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Yeah.
402
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Yeah. Yeah, for sure. We've changed a lot.
403
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So I think I already said our payments mix was kind of less favorable than we
404
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had anticipated it to be from the start.
405
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So one thing that we saw was more manual card entry, card-not-present,
406
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the contractor typing into digits. It's just a really bad way to...
407
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It's more costly. It's also just a really bad way to pay.
408
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It's very fraud sensitive. So there was one thing we saw,
409
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and we added a fee for manual card entry specifically both to kind of protect
410
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our margins as well as to kind of disincentivize that type of usage.
411
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And we now have actually contractors that are asking us for reports every week
412
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of like, "Hey,
413
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who in our company is still doing manual card entry because we don't want to use
414
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it." We did a lot of other things too.
415
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We introduced interchange plus pricing recently.
416
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We set a cap on ACH. We had,
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ACH used to be a percentage of the transaction volume.
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And if you have a $100,000 transaction,
419
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that's going to be pretty big bills just for taking an ACH payment.
420
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I think one thing I'm most excited about is faster payouts.
421
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We introduced that fairly recently, so speeds up payments, or payouts,
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by a day.
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And the willingness to pay for that from contractors is extremely high.
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So that turned out to be a fantastic way to also create some extra margin
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and make our contractor base super happy.
426
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Yeah. So faster payouts is interesting.
427
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I want to dig in there a little bit more.
428
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You had maybe a feeling or an assumption or you had contractors asking for it,
429
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but then maybe it outperformed your assumptions.
430
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How would you navigate that for future launches?
431
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Are you using what you learned there to have more conversations for the next
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one,
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or you just like to be pleasantly surprised when the adoption is super high?
434
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Yeah, it's a great question. So we knew they cared about it a lot.
435
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Initially we were paying out, like we had a very long payout period,
436
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took like four days or so. We ended up shortening it already, to two days
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by default. And then with faster payouts, we do one day,
438
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and we might introduce Instant as well. So we knew they cared about it.
439
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We just didn't know the extent to which they cared about it,
440
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in terms of like willingness to pay.
441
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There was just super high willingness to pay for that. So I mean,
442
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to get better at that, I don't know if in the future perhaps we can do some more
443
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specific pointed research where we ask them about like, "Hey,
444
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what is the willingness to pay for a certain feature?".
445
00:25:03.700 --> 00:25:06.420
Yeah. All right. Last question.
446
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So for anyone here in the room that's early in the process and maybe thinking
447
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about the framework, or how that applies to them,
448
00:25:13.660 --> 00:25:15.980
what's the one thing that you wish you had known at the start?
449
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Yeah, I would say two things. And it's not just me,
450
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but I think for companies in general that are embarking on payments,
451
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embedded payments, or platform payments. So first off,
452
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I think a lot of companies go into it thinking, "Hey,
453
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this could be a really big additional revenue line." And it can be.
454
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It can be a very green P&L, it can be a great addition to your company.
455
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But there's also a lot of up-front cost involved, both in terms of the,
456
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"building the restaurant" is what we were talking about, but also in terms of,
457
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if you want to attract customers initially, your pricing,
458
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a bit more competitive pricing might also be realistic.
459
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So I think having a bit of an expectation that there's a bit of a build period
460
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to really get to that large revenue, large profit center.
461
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And I think second, look, pricing is not static. We've already made,
462
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I don't know, they're hard to count,
463
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but maybe like five changes to our pricing structure over the course of the
464
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one-and-a-half year that our toddler is now alive and-.
465
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Until they go to college.
466
00:26:19.420 --> 00:26:22.840
Yeah, exactly. So it's definitely not a static thing.
467
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It's a very dynamic concept,
468
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and that would be another thing I would very much advise anyone going into this
469
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space is like, don't just think about like, "Hey,
470
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this is going to be our pricing.
471
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This is how we're going to put our pricing out to the market.
472
00:26:34.560 --> 00:26:37.920
Also think about subsequently, how are you thinking about making updates?
473
00:26:37.980 --> 00:26:40.120
How might you communicate them to your customer base?
474
00:26:40.520 --> 00:26:41.960
Do you want to do it at a certain frequency?
475
00:26:42.620 --> 00:26:47.600
I think that's a very valuable conversation to have
476
00:26:47.720 --> 00:26:48.440
upfront.
477
00:26:48.440 --> 00:26:51.920
Yeah. Yeah. All right. I think that's a perfect note to end on. So thank you,
478
00:26:52.000 --> 00:26:56.600
Joris. That was incredibly practical. So to recap: remember the framework;
479
00:26:57.100 --> 00:27:01.720
pricing isn't a one-time decision. Again, it's a loop: research, target, launch,
480
00:27:02.200 --> 00:27:05.820
iterate. And I think you've exhibited that today, too, through our conversation.
481
00:27:05.920 --> 00:27:08.360
So every pass gets sharper. So keep at it.
482
00:27:08.820 --> 00:27:11.820
And if you're looking for advice on the framework or sort of have questions
483
00:27:11.840 --> 00:27:15.080
about pricing, please come up and find us afterwards. We're happy to chat.
484
00:27:15.240 --> 00:27:17.080
Keep the conversation going. So thank you.
485
00:27:17.380 --> 00:27:17.600
Thank you.