ADAM BOUSHIE: Who here has heard the buzz around embedded finance or participating in the buzz? Raise your hand. All right. All right. So you might have heard this in your discussions with your board, maybe your investors. I spent a bunch of time with, I think, 25 private equity firms last night. And this was a hot topic of conversation. You may have also heard it from analyst reports or our competitors announcing this in their news feeds and flooding your news feeds. Maybe you’ve seen my LinkedIn posts.

But it seems like many of us in this room—we’re all in the same boat. But let’s be clear. Embedded finance—it’s not jargon. It’s not a fleeting trend. It’s here to stay. Okay. Customers are seeking solutions for loans. They’re struggling with cash flow. They are looking for faster payout options, and they’re often going to third parties to get those solutions. Many of you here are platforms. You should think about how critical this is for you to provide these services to your users before your competitors do. 

Did you know that, on average, SMBs have only 27 days of cash on hand? Twenty-seven days. This isn’t enough to cover unexpected expenses, and it’s certainly not enough to invest in the growth of a business. In fact, it’s probably not enough to pay for inventory for just a month or make payroll, much less unexpected setbacks. And because of this, financial services are really important for your customers and their journey. But they’re finding it to be a disjointed and confusing experience when they have to go to multiple providers to get their needs served. 

Tech-first organizations like yourselves are those who are best positioned to solve this need. And why is that? Well, first, as their SaaS provider, you deeply understand them as a customer. You can tailor their experiences to their needs. And you already have a foundation of trust because you’re their OS in many cases. You’re their operating system. But we’ve heard from all of you that there’s really no great way to say what’s the best way to get started. 

So today, we’re going to answer three questions. Will this distract me from my core business, meaning embedded finance? How do I get started? And what’s the best first thing to do? And then finally, how do I scale my embedded finance offering and see it grow? 

So will embedded finance distract you from your core business? Many platforms are looking to provide a one-stop shop for their customer base. And embedded finance is how you can do that for your users. So you’re going to enable customers to spend, to store, to manage and move money all without ever leaving your platform. Many of the conversations that I’ve had this week at sessions have been about, how do we keep all the money movement within our ecosystem as a platform? 

I want to share a personal story with you. Behind me, you’ll see that picture. That’s—my wife and I own a spa in Denver, Colorado. And we just celebrated our one-year anniversary, so we survived the first year. Yay. Thank you. But I can tell you, as a business owner, it was a very overwhelming experience, very overwhelming. And this was more than just a business to us. This was something that we were deeply passionate about. So our stakes were really high. 

And there were countless decisions to make. And we didn’t have a clear path or roadmap on what we needed to do. But we quickly realized that, when [you] open a business, you need a lot of different financial services. We counted about 10, okay, about 10 different financial services, from payment processing to managing our expenses. 

We decided we needed a SaaS platform that could combine as many of these services into one cohesive solution, as many services as possible. That was actually one of the principles we had when making a decision on which software provider we would use. We looked at over a dozen different providers, and all of them seemed pretty similar. Every one of them offered payment processing. But one of those stood out by offering a comprehensive suite of financial services that others weren’t offering. 

So we chose to move forward with Mangomint. It’s a SaaS platform built on Stripe. Surprise, surprise. By creating this centralized hub for us to manage all of our finances, it streamlined our daily operations. And what it allowed us to do is actually freeing up our time so that we could focus on what we were really passionate about, and that was serving our guests. As a spa owner, I wanted to serve our guests, not manage a bunch of different service providers. And the functionality that Mangomint continues to provide—it makes us more loyal and more dependent on their solution. And I can say that, today, I can’t imagine running our business without them. 

So if we zoom out further, platforms that embed financial services into their suite—they see an average of a 40% increase in customer lifetime value. And this is because embedded finance is super sticky. If we look at large platforms, as you can see here, they have an 80+% retention rate on embedded financial services. So the moral here is that the more things that you can provide to your users and customers, the more sticky they are and the longer they stay customers and the increase that you’ll see in the overall lifetime value. 

So what is the common thread among the hundreds and hundreds of platforms that have integrated financial services on Stripe? They don’t view embedded finance as just an add-on. They view embedded finance as a critical part of their company strategy and how they serve their users. So with that, we’ve explored why embedded finance is important to prioritize and how it actually adds value to your core offering versus distract[ing] from it. And I’d like to invite up to stage here our head of product for Stripe Capital to talk about why lending is a great first place to start. So welcome to the stage, Tanay. 

TANAY JAEEL: Thank you so much, Adam. So what is the right first place for a platform to start when it comes to their embedded finance journey? The answer here is clear. Starting with offering access to capital is the right first step because it is such a high-priority problem for small businesses around the globe. In fact, we ran a survey on Stripe asking small businesses, what is your number-one barrier to growth? And the top answer was access to capital, even more than other critical areas like having enough bandwidth in your day or finding the right talent for your team. 

And when you put yourself in the shoes of an SMB, it makes sense why. Their options for financing today aren’t great. They could walk into a bank and apply for a loan, but that process can take months and often ends in a decline. They can rack up charges on their credit cards, but that can be expensive and affect your credit score if you don’t pay it off. They could search business loans now on the internet, but then they have to navigate unknown online lenders who can charge triple-digit APRs. 

But what if, instead of any of these options, they could go to you, their trusted platform, who deeply understands their business and has a stake in their success? What if they could get automatically underwritten for offers without lifting a finger, they could apply in the dashboard they already use, yours, and they could get approved in as little as 24 hours? 

Over the last few years, we have seen a stampede of platforms across every vertical you can think of adopt and monetize financing solutions for their businesses. And while every industry and SMB is a little bit different, the common trend here is very clear. SMBs need access to capital in order to grow and invest in their future, to manage cash flows for their business, and to save themselves time. And if you can be the one to solve this problem for your users, you enable both their growth and your own. 

So even if you’re sold on launching a capital strategy, getting started with lending and financing is a daunting task. There’s regulatory and compliance considerations. You need a capital market strategy. Where’s the money going to come from? What if you don’t get paid back? There’s credit risk exposure and so on and so forth. It’d be easy to take a look at this list and ask yourself, what is the ROI of spending my time on this? 

But here’s the real game changer for platforms. With Stripe Capital, you can launch a financing product for your businesses without navigating all that complexity and without any of the credit risk. You can get started in days, not years, leveraging your existing Stripe integration, and we will even pay you to do it. There’s no cost to the platform, just a transparent share of the revenue. How often do you get a deal like that? 

Stripe Capital is an end-to-end financing solution built with vertical SaaS platforms in mind. And it’s the right first step for your embedded finance journey because it is so low-lift. There are no engineering or marketing resources required to get started. You’re just a few steps away from quickly addressing your customer’s top pain point and spinning up a new revenue line for yourself in the process. 

So why don’t we put ourselves in the shoes of Pose, a hypothetical software provider for yoga studios, and we’ll see a little bit about how this works. We’ll talk through how Pose launches Stripe Capital in minutes using our soon-to-be-released onboarding flow, how they embed the experience into their own dashboard, how they share data with Stripe to make the underwriting even better, and how they expand internationally across multiple regions. 

Let’s pretend that Pose has already successfully monetized payments, and they’re sitting in their Stripe Dashboard. They see a call-out for Stripe Capital, which is really timely because multiple of their yoga studios have flagged recently that getting access to financing is getting difficult, especially in this macro environment. They click through, and they land on the Stripe Capital landing page. And right from the get-go, Pose can see that 450 of their yoga studios have automatically become eligible for Stripe Capital. And this is without Pose or those studios having to lift a finger because Stripe can automatically underwrite users based on the payments volume we already see. 

Pose is excited to get these financing offers in the hands of their users, so they click “Get started.” And from here, there’s a few different options for how Pose can integrate with Stripe Capital based on their goals, their priorities, and their timeline. For example, a medical management software provider wanted to go live with Stripe Capital as quickly as possible. They didn’t want to spend a minute of time on engineering or marketing. And so they went with Stripe Capital’s no-code option, where Stripe handles the end-to-end user experience, including letting users know when they’re eligible for capital and managing the UX. 

On the other hand, automotive software provider Tekmetric wanted a more integrated experience that lived within their dashboard. And so they decide to go live with Stripe Capital’s prebuilt embedded components. Salon and spa software program GlossGenius wanted an extra level of brand customization at every step in the process. And so they decided to devote engineering resources to integrate with the Stripe API. And this allowed them to build a fully white-labeled experience for their businesses. 

So Pose thinks back to their roadmap, and they realize, we don’t have a lot of engineering resources this quarter. And honestly, we just want to get this thing on and in the hands of our users. So why not start off with the no-code option and upgrade as we go? They click through a few more screens, including seeing the exact offer emails that their users will receive when they’re eligible for an offer, and the end-to-end dashboard experience, which is co-branded with Pose and Stripe Capital. 

They can even sign a partnership contract right from the Stripe Dashboard that shows them the revenue share they’re going to earn every single time a user takes out financing. And that’s it. Pose Capital is now live and ready to start sending offers to their eligible users. So with just one final click, Stripe has now sent offer emails to all eligible yoga studios with a personalized, tailored offer to that business. And Pose can follow along with the whole experience right in their Stripe Dashboard, seeing which offers have gone out and seeing which users have accepted. 

I just want to pause here and reflect on what we just did because launching a financing program used to take months of legal and compliance work, quarters of training underwriting models, new servicing flows, new UX screens. But all of this has now been reduced to a series of clicks in your Stripe Dashboard. And this is not just a hypothetical experience. The platforms we’ve gated into this upcoming onboarding flow have actually gone live this fast. 

And one of my favorite stories is a platform that went from hearing about Stripe Capital and onboarding to having real offers in their users’ hands in literally five minutes. [applause] And by the way, two minutes after that, their first business had accepted financing, so it was actually that fast. We are super excited to roll out this revamped onboarding experience to all US platforms later this year. 

So now let’s fast-forward a little bit and pretend that Pose has been live with Capital for a few months. And they’re seeing exciting adoption from users and a new revenue stream for their platform. They decide it is time to double down on Capital and start with Stripe Capital’s embedded components. This allows the entire financing journey to live in Pose’s dashboard, so their users never have to leave that surface. So they can find out they have an offer. They can apply for that offer. And they can manage their financing all within the Pose dashboard. 

This creates a really powerful and integrated experience. And as a testament to that, when home services platform Jobber launched embedded components, they saw a 100% increase to their origination volume, or the dollars that users take out in financing, in the few weeks after their launch. Embedded components [are] just a couple of days’ work once Pose decides they want to launch. 

Next, let’s say that Pose turns their attention from conversion and user experience to the actual offer terms their users receive, like the financing offer size and the price. Pose realizes that while Stripe Capital does a great job of underwriting based on Stripe transactions, there are some transactions that are missing from the picture. Let’s say maybe Pose has another payments processor. Perhaps their businesses do a lot of offline volume via cash and checks. Pose is wondering, how do I offer a more holistic capital solution to all of my users regardless of where their revenue is processed? 

Well, the great news for Pose is that Stripe Capital can now underwrite any business regardless of where their revenue is processed, whether that is on Stripe, whether that’s with another processor, offline via cash and check, or any combination of the above. Pose can easily upload transactions from these other sources to Stripe. And we’ll do all the heavy lifting from there, factoring it into our underwriting on a daily basis. 

In my four years on Stripe Capital, this is the product update I have been the most excited about, and I’m so excited to share with all of you because it means, for you as a platform, more of your users are going to be eligible for capital. And the offers that these users get are going to be more relevant and holistic as they’re tailored to that business. 

We’re in private preview right now with the number of platforms, and the results have been really exciting. We’ve had platforms see a 30% increase to their offer sizes they can offer users, and other platforms double their number of eligible user base. And we’ll be rolling it out to all platforms later this year. And finally, when Pose is ready to take their program outside the US, again, it’s just a couple of quick steps. We are already live in the US and the UK And by the end of this year, we’ll be live in France, Germany, and Australia. 

So now that you’ve seen the whole Capital journey, you’re probably wondering, what is the bottom line this is going to drive for my users and for me as a platform? Well, across the dozens of platforms that are live on Stripe Capital, we’ve seen two big things: first, high levels of product stickiness and satisfaction for users; and second, meaningful new revenue streams for platforms. On the conversion side, we’ve seen high adoption rates for Stripe Capital as a testament to how big of a need this is for small businesses. 

Take, for example, StyleSeat, a platform provider for spas and salons that have seen thousands of their users, over one in three, accept their financing offer. And on the platform side, there are meaningful new sources of revenue that are being generated via Stripe Capital. In fact, right now, there are multiple platforms for whom Capital is actually their number-one revenue-generating Stripe product, even above Payments. 

So now let’s get to our third question. How do I grow my offering into a full embedded finance suite? Start with Capital as a wedge. And once you’ve cemented in your users’ minds that you are their trusted financial partner, you can use it to power new embedded finance journeys— for example, storing funds in a financial account powered by Stripe Treasury and then spending those funds in a card with Stripe Issuing, with you as a platform having monetized all four of these steps. 

Platforms like PlayMetrics, who’ve done this, have successfully seen exciting new revenue results, including a 15% increase to their average revenue per user and a 3x year-over-year increase of their Issuing and Treasury volumes. So embedded finance is not a distraction from your core business because it is a part of your SMB’s core business. Stripe Capital is the right place to get started because it is so low lift. And you can use Capital as a wedge to a full embedded finance suite where you store with Stripe Treasury and spend with Stripe Issuing. 

So now that we’ve walked through the entire embedded finance journey, let’s bring Adam back up along with a few users who’ve walked this path. And they’ll talk to you about how they knew it was time to go beyond payments and build a full embedded finance suite. 

ADAM BOUSHIE: All righty, thank you Tanay. Well, Neil, Richard, Corey, thank you for joining us today and sharing your experiences with your peers here. I’d like to start with you, Neil, on—when did you realize that it was the right moment for Tekmetric to move from traditional payments to incorporating other financial services capabilities? 

NEIL PATEL: Yeah, great question. So as we were ending the journey of our payments acceptance journey, we really started to think about, like, what are the new services that we can offer to our customers that can help drive real value for them from providing access to new financial tools to further grow their business? And so we really started by having conversations with our customers to understand what their major pain points were around their financial operations. And we quickly realized that cash flow is obviously a very important part of managing their business. 

In auto repair, there’s a lot of capital outlay that has to occur to run the shop. And so that became a natural opportunity for us. And we quickly realized that, by offering capital, we’d be able to further enable the success of our auto repair shops by allowing them to manage their businesses more efficiently and also purchase new diagnostic equipment, lifts, and even go as far as purchasing new locations. 

ADAM BOUSHIE: Wow. One of the concerns that we’ve heard is, is this going to be a distraction for my core business? Can you talk a little bit more? Did you find it to be a distraction? 

NEIL PATEL: Yeah. That was an internal conversation that we had as well. We were walking into some unfamiliar territory when it came to embedded finance. And we quickly found that working with embedded components and placing those prebuilt services into our application really did allow us to enable capital in a few weeks. And using the marketing functionality from the emails to the promotional banners, we were really able to see some great uptick in a very low-lift effort. 

ADAM BOUSHIE: Wow. So you would say, definitely worth the investment. 

NEIL PATEL: Absolutely. 

ADAM BOUSHIE: Great. 

NEIL PATEL: Yeah. 

ADAM BOUSHIE: That’s amazing. Richard, I would like to actually pick your brain on this as well. Did you find when you launched Issuing and [financing]—how did that distract you from your business? Did you find it to be distracting? 

RICHARD CARTER: Not at all. It’s key differentiating features of what we offer. And I think, obviously, with the ability to deliver solid numbers to the bottom line as well, from an issuing perspective, we allow customers to have instant access to their funds. There’s a significant increase in the insight we have on them as a result of their spend. And we have the ability to deliver them offers and rewards that can further offset the fees that we charge. So that’s been very interesting for us. 

And then from a capital perspective, it’s been very surprising to me how we’ve been able to use it as part of the sales cycle and not just to, I guess, gain revenue from an existing customer. Because, if a conversation, which it sometimes does, goes to a cost and a pricing kind of narrative, you can then say, well, I actually provide something that can help supercharge and grow your business. 

And you can shift the narrative to a supercharge-and-grow versus a how-much-features-type conversation, which has been particularly valuable. And then, you know, the stickiness and loyalty of those customers that embark in that is just phenomenal. And from a bottom line perspective, 14% of our revenue last month was from Capital, so significant. 

ADAM BOUSHIE: Wow, that’s impressive. I had a chance to meet with Richard yesterday. And if you’re thinking about a loyalty program within your offering, I would recommend talking to Richard. What they’re doing is very impressive. I was like, wow, that’s novel. That’s really, really interesting. And I think it really drives value for your users, which is ultimately the most important thing. I hear you’re expanding to the US. Anything you’d like to share on that? 

RICHARD CARTER: Well, from an insights perspective, I’ve been delighted about how enthusiastic everybody is in America. 

ADAM BOUSHIE: We’re Americans. 

RICHARD CARTER: Yeah. Our offer is very compelling. And in Britain, sometimes it’s met with a little bit of suspicion of, “Is this a bit too good to be true?” where in the US everyone’s been like, “Wow, that’s impressive, and I’d love to tell my friends about that. And if I do, would you give me some rewards for doing so?” So I’ve enjoyed that level of enthusiasm. I think offers, rewards, insights are very well received here. So yeah. That’s been a really nice surprise for us. 

ADAM BOUSHIE: That’s really amazing. Thank you for sharing your story. Corey, you partnered with Stripe on building our embedded components capability. So Squarespace was actually a build partner with us when we looked to build the embedded components, as you saw in Tanay’s speech. Can you tell us why that was so important for Squarespace? 

COREY ZETTLER: Yeah. It was a really exciting opportunity for us to partner with the team, and everyone is really happy to be able to do this collaboratively. Design and brand are so interwoven into the DNA of Squarespace that it comes to the top of every single decision we make when we’re building new features. And so when thinking about how to do capital, that was really, really important to us. And we could kind of go down one of two paths: build the embedded components the way that we’ve been laid out to do or build the Stripe API custom components like we did with Squarespace Payments. 

ADAM BOUSHIE: Right. 

COREY ZETTLER: And knowing that we had tons of behavioral data and insights on payments for so many years before that gave us good confidence that that was the right investment. But for capital, it was new. It’s not as mature, and it was something new for us. So we really wanted to make sure that we were doing it right. 

We partnered with the team to kind of get the custom component place to where we could add our design element into it a little bit more. And we got it done in half the time. The team was really happy to have a lot of our design elements into it. And we launched this past January. And even within one quarter, we’ve already surpassed our entire year’s goals on capital. 

ADAM BOUSHIE: Wow. 

COREY ZETTLER: Yeah. And we’ve even gotten some merchants to come around and start doing a second round of funding. So it’s been tremendous. It got stood up very quickly and really has helped cement our financial solution. 

ADAM BOUSHIE: That’s incredible. When he talks about, like, craft and beauty of the Squarespace product, I can attest. I spent some time in their office in New York last year. And you walk in—everything is completely black. Nothing is other than black, maybe some wooden tables occasionally. 

COREY ZETTLER: Yeah. Nothing is not on-brand. 

ADAM BOUSHIE: I don’t know. Yeah. So what’s next for you when you’re looking to grow and scale the business? 

COREY ZETTLER: Yeah, I think Tanay actually hit it pretty perfectly. We’re all about access right now. So now that it’s up and running, and now that we’ve seen what merchants are coming and doing with it, we want to get it out to as many people as possible. And so there’s really two paths that we see for that. The first one is geographical expansion. I know Tanay got to say that it is now live in the UK. We are right on the heels of that. 

And I can attest that, because of the embedded components, we were able to stand it up in relatively no time. So as soon as we’re ready to go live with that, we’ll be really excited. And no pressure at all, but we’re definitely ready for France, Germany, and Australia as well, whenever you get there. And then for the second piece of it, we also want to make sure that, depending on the process you have, shouldn’t block you from getting access to an offering like this. 

And we have merchants that have had many different processors all throughout the Squarespace ecosystem. We’d like them to come over to Squarespace Payments. But we know it’s a complex choice and a big ecosystem. So hopefully, enabling as much offering for those different processors is big for us. And we’ll definitely be taking advantage of that as well. 

ADAM BOUSHIE: Yeah, I mean, off-platform lending and underwriting and lending is a big priority for us so looking forward to working with you all as a build partner on that as well. 

COREY ZETTLER: Same. 

ADAM BOUSHIE: All right, so this is going to bring us to an end of the presentation. I want to thank you, Neil, Richard, Corey, for taking time out of your schedules to come here all the way from London to spend some time with us. Thank you all. The last day of Sessions at like 2:00 and you’re still here—thank you. Cheers.