A Covid-Inspired Push for Embedded Payments Helps Spur Four-Fold Growth for Finix

With more independent software providers and financial-technology companies embedding payment capabilities in their applications, Finix Payments Inc., a provider of payment applications, has seen its transaction volume jump more than fourfold from the second quarter of 2019 through the second quarter of 2020.

Key drivers of the growth include a push by software companies to unlock new revenue streams by owning the payment mechanism within their application. Also, consumers’ desire for more contactless payment options as a result of the Covid-19 pandemic is adding to growth, Finix says.

“Companies are seeing the power of embedded payments in their software, which is accelerating demand,” says Richie Serna, chief executive at Finix. “The coronavirus has also accelerated the shift in how consumers experience commerce. Prior, contactless payment was a nice-to-have, now it’s table stakes.”

By providing an out-of-the-box payment solution that can be integrated into an existing application, San Francisco-based Finix spares independent software providers and fintechs the cost and time of building a solution in-house or outsourcing management of such an application to third parties. Embedding a payment application also allows software developers to take ownership of the payment experience in their application, Finix says.

For example, Passport Labs Inc., a Charlotte, NC-based provider of applications to municipalities to manage operations, including parking, added Finix to its parking application to allow consumers in Atlanta and Austin, Texas, to pay for parking in those cities’ municipal parking lots using a mobile wallet.

Atlanta-based small-business loan provider Kabbage Inc., which was recently acquired by American Express Co., tapped Finix to launch a digital gift card solution.

As part of its plans to make it easier for software developers to embed payments in their application, Finix recently began testing Flex, which will allow developers to “build and scale on the same Finix platform and API they’ll use as a payment facilitator, removing traditional switching costs and technical challenges” Finix says in a recent blog post.

Earlier this week, Finix received a new round of funding to expand its business. The capital infusion, which Finix says is an extension of a $45-million Series B round of funding announced in March, brings the total venture capital invested in Finix to $96 million. Lightspeed Venture Partners led the extension with American Express Ventures’ participation.

Finix plans to use the funding in part to hire more software engineers, Serna says. “We expect more independent software providers and fintechs to embed payments,” Serna adds. 

To support its expectations of continued rapid growth in embedded payments, Finix cites in a blog post a report from JPMorgan Chase & Co. earlier this year that says integrated payments are expected to grow twofold for several years and penetrate 10% of the software market in the United States, up from 8% six months prior.