Pay Theory Blog
February 26, 2025

How Pay Theory is Elevating SaaS Platforms with Embedded Finance

Pay Theory is allowing SaaS platforms to build integrated financial services by collaborating with Finxact, a leader in modern core banking technology. By leveraging Finxact's robust, flexible platform, Pay Theory empowers SaaS platforms to offer tailored financial products like bank accounts, lending options, card issuance, and rewards programs seamlessly integrated into their ecosystems. Integrating embedded finance functionality is challenging without significant effort and expertise. Pay Theory is making it possible to add these feature sets to your platform with a fraction of the time and effort required to “build it yourself”.

Creating Bank Accounts for Merchants and Payers

SaaS platforms can create and manage bank accounts tailored to their merchants or payers. A multi-asset, multi-position account structure supports diverse account types within a single framework, enabling the consolidation of deposit accounts, loans, and other positions under one account. This flexibility is especially valuable for merchants and payers, who may require customized accounts to streamline their operations and payment processes. Real-time processing capabilities ensure that accounts are immediately functional, supporting the 24/7 availability customers expect.

Allowing Issuance of Debit/Credit Cards Against Bank Accounts

Issuing debit and credit cards linked to bank accounts is becoming simple to implement. API-first architecture enables seamless integration with card networks and issuers, allowing SaaS platforms to launch card programs efficiently. Real-time transaction processing ensures that card-related operations, such as payments and authorizations, occur instantly, providing an optimal user experience. Additionally, an open ecosystem supports creating highly personalized card products, which you can tailor to the needs of specific customer segments like merchants or individual payers.

Being Able to Create Lending Products Tailored to a Particular Platform (Merchant or Payer)

Pay Theory is designing and building lending products tailored to your platform's unique needs and those of your merchants and payers. Our structure allows organizations to create bespoke lending solutions. These products can be embedded directly into your platform, facilitating seamless access to credit. The temporal database enhances lending operations by providing granular transaction histories and real-time financial insights, critical for underwriting and risk management in lending scenarios.

Building Rewards Programs

Accounts can track and ledger rewards points along with traditional financial assets, enabling SaaS platforms to integrate loyalty and rewards programs directly into their banking operations. Pay Theory's technology allows for the addition of custom fields and business rules to manage reward accumulation, redemption, and expiration. Additionally, the real-time processing and database capabilities ensure that reward transactions are accurate and can be viewed at any time.

This feature set is a great way to add value to your merchants and payors. Loyalty programs, healthy habit incentives, referral programs, billing and payment integrations, and customized plans introduce high-value user experiences into your platform.

A Must Have: Risk Management

The challenges facing embedded finance were highlighted by the collapse of the Synapse platform in 2024. The errors that led to their bankruptcy were linked to their sponsor bank network as well. In response, sponsor banks reassessed their role in embedded finance, focusing on risk management, regulatory obligations, and operational oversight. Ultimately, banks bear the regulatory responsibility for the funds entrusted to them. A crucial aspect of this puzzle is the often-overlooked role of the Program Manager. Fintechs, banks, and specialized Program Management companies can all fulfill this role, but, ultimately, experience, systems, and controls are paramount.

Pay Theory has partnered with Central Payments, a leading purpose-built program manager with banking roots. The Program Manager helps build a customized embedded finance offering with a fintech and SaaS platform. They also ensure compliance with established regulations through real-time systems and audits.

Since 2013, they have dedicated themselves to delivering quality banking experiences with top-end security practices. Together, we are creating differentiated yet secure financial products tailored to specific customer targets. This approach enhances value for everyone and ensures compliance with regulations.

In Conclusion

Pay Theory is partnering with Finxact to enable SaaS platforms to integrate financial services, providing them with the tools to drive high-value user experiences and engagement. Embedded financing offers customized solutions that cater to the unique needs of your merchants and payers.

For must-pay platforms, introducing embedded finances is a fantastic way to increase customer retention, enriching your overall value to them.

Contact our sales team to discuss how you can embed finances into your platform.

Sources Referenced