Industry veteran James Greaves, ex-Vice President of Zelle and President and Co-Founder of Fractal, a payment platform providing simple and efficient payment solutions to SaaS companies, divulges insights and predictions on the future of payments in fintech and why fintech integrations are the next frontier for SaaS.
It’s worth noting that Fractal is described as a next-generation FinTech innovator crafting intelligent payment solutions specifically for SaaS pioneers.
They aim to empower tech platforms to seamlessly add the lowest-fee, seamless payments to their solution — enabling platforms to quickly add more payment tech, more solutions, and more versatility.
Our conversation with James Greaves is shared below.
Crowdfund Insider: Can you tell us more about Fractal?
James Greaves: Launched earlier this year, Fractal is revolutionizing payment processing, enabling SaaS companies to make more money from payments while retaining more control and flexibility. This empowers SaaS platforms to provide their customers with consistent value while turning payment into a well-run profit center.
We have been able to rapidly adopt new technology and react to new legislation to provide value. The size of our organization and the fact that we already had payment services plus a banking relationship allowed us to rapidly adapt off the back of the Durban Reg II amendment in 2023 to run debit card transactions on a secondary network. This has enabled us to reduce transaction expenses to historic lows: We’ve seen customers lower their cost base by 40%.
Fractal’s new service leverages APIs and embeddable widgets while providing accessibility to multiple forms of card and ACH payments, enabling SaaS companies to focus on their core business. Our payment platform also offers SaaS-tailored support and simplified onboarding, reporting, and marketing for customers.
This is an exciting time in the industry, where companies have more opportunities than ever before to drive profits by embedding financial products into their ecosystems.
Crowdfund Insider: What emerging trends are you excited about for payment processing?
James Greaves: The big trend that’s been ongoing for a while now is banking versus fintech. What we’ve been working on as an industry for over a decade now is providing better, more seamless digital experiences that enable a much simpler life for customers. For example, instead of doing a mortgage application on many different forms, you can do it in one app. What fintech has done is provide a much smoother experience to the underlying finance industry.
However, we’re still only 2 to 3% of the way through unlocking financial services through fintech. There’s just so much more that needs to be done in terms of powering seamless experiences, providing more transparency, more usability, and more interoperability. Most financial services are still complex—we still need a lot of paperwork and in-person visits on top of everything else—so continuing to drive more seamless, simple, and secure experiences is the whole game.
Payments and fintech are secondary thoughts for many companies right now, and most business leaders are just looking to find easy plugins. However, what’s essential to any business is collecting money: Every business collects and stores money and authenticates users. Collecting payments is universally the top interaction point for any company. Getting this spot on is crucial, yet there’s still a lot of headway to be made in the industry to improve the process.
Crowdfund Insider: What considerations should leaders account for when selecting vendors for payment solutions?
James Greaves: It largely depends on the industry you’re operating in. In the B2B2C community, in which we do most of our work, payments can get very complicated very quickly. Having a solution that scales with the complexity of the different types of payments that you need to make is therefore critical.
Another key consideration for business leaders, regardless of industry, is that you shouldn’t need a massive internal team to facilitate this solution. Business leaders should look to strike a balance between paying more attention to payment processing and not having to hire a dozen people to run it. My recommendation is to pinpoint that trade-off between the two extremes of just plugging in a random vendor on the one hand and having a massive, dedicated in-house team on the other. That’s where you’ll find the sweet spot where you can maximize experience and revenue but minimize the amount of work that you have to put in.
Crowdfund Insider: What are your recommendations for SME leaders looking to streamline their operations and ensure cohesive data management to maximize scalability and profitability?
James Greaves: There’s a lot of buzz around embedded payments and embeddable finance, but people don’t fully grasp what they are. These solutions are transforming the landscape of just how quickly people can integrate better experiences and flows into their products without having to build a whole bunch of code or software.
The embedded technology side, where software platforms can easily extend their product set through a couple of lines of code, is transformative to unlocking big results and powering a new kind of customer experience. And, if you think about all the different activities you can do with finance, whether it’s collecting payments to buy-now-pay-later, offering new lines of credit, or dealing with investments, there are a lot of these more embedded technologies that can extend legacy systems and platforms. These are both powerful and lucrative. Any executive team should ask how they can get more out of them.
In terms of embedding technology and achieving revenue share, organizational leaders shouldn’t just aim to plug in a vendor or partner’s product and then not participate in the process.
That’s because payment processing platforms are revolutionizing how SaaS companies interact with customers and merchants. Historically, for instance, when a SaaS provider wanted to add payments to its platform, this would entail each customer separately choosing a payment vendor to integrate with. This process locks the SaaS platform from seeing top-level data or participating in a lucrative revenue stream.
The old model means that SaaS organizations would have to accommodate any integration their customer wanted and hope that it would just all work out. But, because of this fragmentation, these companies don’t see any of the additional benefits a platform approach would give them.
That’s why we’re working at a platform level to tightly integrate systems so that SaaS companies can enable all of their customers (or merchants) to a singular point of view where information from both payments and SaaS services are displayed. This is a much simpler and more streamlined approach that unlocks new avenues of interacting with customers to help them understand operations optimization more succinctly.
Crowdfund Insider: When overhauling existing payment processes, what essential considerations should leaders keep in mind?
James Greaves: If you are doing payment processes at the platform level, there are many benefits beyond participating in the upside, such as building unified experiences that delight the user, providing a better experience, expanding insight, and increasing switching costs.
The other consideration is that fintech is just as much about managing risk and compliance as it is about technology. Make sure that you pick a vendor that is PCI DSS (Payment Card Industry Data Security Standard) compliant, and check their chain of vendors and partners—no one in the fintech market operates without partners. Find vendors who understand the risk and compliance world and have solutions to really make these factors easier for the customers.
Finally, looping back to my previous point, find a vendor who will truly partner with you. There’s a trade-off between wanting a partner who provides embeddable tech widgets that just accept payments and finding a partner who will also ensure those widgets are robust and powerful so they can be tightly integrated to maximize a seamless end-user experience. Moreover, take into account how data is shared where it needs to be and not shared when it shouldn’t.
Crowdfund Insider: How can partnering with a payment process vendor benefit companies?
James Greaves: Engaging a respectable partner well-versed in compliance and risk can elevate your overall software development strategy as opposed to approaching it in-house alone. Building a tightly controlled specific use case, with all the proper compliance around it, allows SaaS leaders to focus on more nuanced aspects of the software development roadmap without having to be pulled as closely into compliance.
That’s because looking at all the risk vectors—whether they’re technology, user behaviors or compliance—is what the vendor’s there to do. If a company decides to build something in-house themselves, even if they hire a small team of three to five people, they’re still ramping up more significant risk than onboarding a partner specializing in embeddable tech. From a compliance perspective, partnering with the right vendor to embed finance is the right way to go.
Crowdfund Insider: How about convincing organizations to work with smaller partners?
James Greaves: This is the crux of the entire fintech versus finance debate that I spoke about at the beginning. When you want to choose a financial institution, you’re going with the idea that the older, the better. Fintech is the opposite: The younger, the better.
Today’s FinTech giants are already more than a decade old and were built on a previous round of technology. They’re right to be disruptive, yet this is the innovator’s dilemma: The next round of technology, which is what we have right now, is actually both simpler and more secure. Fintech is the one place where, actually, maybe being younger is better.
Vetting vendors’ compliance processes, gauging the extent to which their specific solutions will augment your services, and how compatible they are with existing operations are key considerations when approaching smaller partners.