Embedded Payments Give SaaS a Lifeline as AI Reshapes Workflows

Software as a service once promised a steady rhythm of recurring subscriptions, predictable upgrades and incremental productivity gains.

That rhythm has been thrown off kilter as artificial intelligence begins to alter not just individual tasks but also the structure of business operations.

The core operational threat (at least from critics) for SaaS providers is not that AI will replace a feature here or a workflow there. It is that agentic systems could bypass entire application layers, allowing firms to execute processes across finance, HR and customer relationship management through conversational interfaces instead of traditional dashboards.

The concerns have been reflected in the stock market over the past several days, as shares have been roiled. Stock price movements are shorthand for investor confidence in business models, and the jitters have been palpable over the last several trading sessions.

In the past few days, software and data stocks have suffered declines as investors grappled with the implications of new AI tools. In the United States and Europe, benchmark indices such as the iShares Expanded Tech-Software Sector ETF were reported down more than 14% over recent sessions, following a sell-off that had already marked January as the worst month for the software index since 2008.

Individual shares also bore the brunt of frenzied selling. Thomson Reuters plunged as much as 16% to 18%, LegalZoom slid nearly 20%, Salesforce shares sank, and other names in the legal, analytics and data services sectors saw double-digit drops.

Bloomberg quoted traders as pointing to a “SaaSpocalypse.”

There are counterarguments. Nvidia CEO Jensen Huang has said this week that it is “illogical” that AI will replace software offerings, adding that AI will depend on those tools.

But across the landscape, it’s conceivable that the economics of SaaS will see seismic shifts. IDC reported in December that software delivery is being reorganized around agents and outcomes, not disappearing. The firm estimated that by 2028, pure seat-based pricing will be obsolete, with roughly 70% of vendors shifting toward models based on consumption, results or organizational capability.

That shift reflects a deeper structural issue. IDC described today’s SaaS environment as “a patchwork of interfaces and data silos” that forces employees to adapt to software rather than the reverse. Agent-driven systems promise to abstract that complexity by executing workflows behind the scenes while users interact with a single AI layer. In that model, SaaS becomes modular infrastructure accessed through APIs, while AI becomes the operating surface that coordinates work across systems.

Embedded Payments in the Mix

Against that backdrop, and as illustrated by ongoing PYMNTS coverage, payments and finance are becoming a boon for SaaS economics.

PYMNTS has tracked the steady integration of payments into software platforms, a trend that can be characterized as “embedded everything.” Vertical SaaS providers increasingly incorporate acceptance, invoicing and payouts directly into their products, allowing customers to manage operations and money movement in the same environment.

For platforms, this creates participation in transaction flows that already run through their software. For end users, particularly small- to medium-sized businesses (SMBs), it reduces reconciliation work and shortens the path from service delivery to settlement.

Plaid’s Transfer for Platforms illustrates how these mechanics work in practice. The product enables SaaS platforms to embed bank payments into workflows, supporting ACH, Same-Day ACH, the RTP® network and the FedNow® Service. The operational impact is concrete. Platforms using embedded bank payments report onboarding compressed from weeks to minutes and processing costs reduced as volume shifts from cards to lower-cost bank rails.

PYMNTS Intelligence, in collaboration with Worldpay, found that 90% of SMBs consider embedded finance tools integrated into their management platforms essential to operations. For SMBs, the benefit is functional. Billing, collections and disbursements move inside the same systems used to run the business. For SaaS providers, embedded finance increases product stickiness by tying software usage directly to cash flow.

In an interview with PYMNTS CEO Karen Webster published in June, Stax Payments CEO Paulette Rowe said these integrations are increasingly decisive for SaaS profitability. The central strategic question for platforms is whether to build, buy or partner.

“Those decisions set your path on profitability and efficiency for years to come,” Rowe said.

Many vertical SaaS firms have already saturated their core markets, she said. Embedded payments allow them to participate in card and wallet transactions flowing through their software, adding incremental revenue without diverting engineering resources from product development.

Payment attachment rates often remain below 20% when platforms attempt to sell payments on their own, even though payments can represent as much as 40% of revenues when supported by partners that handle onboarding, compliance and sales execution, Rowe said.

In this model, SaaS companies rely on payment partners to provide underwriting, settlement and risk management, while the platform retains ownership of the customer relationship and workflow design.

The benefit to SaaS providers is diversified revenue and deeper integration into daily operations. The benefit to customers is a consolidated operating environment where software and money movement are aligned across verticals as diverse as healthcare, property management and home services, where platforms are replacing check-based processes with automated billing and payouts.

These changes reduce administrative overhead for providers while giving SaaS platforms durable relevance in industries still transitioning away from paper workflows.

For SaaS providers, adaptation increasingly requires treating AI as a structural capability rather than an add-on feature. Agentic systems push platforms to rethink how value is delivered, while embedded payments offer a way to keep software central to operational and financial activities.

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