Choosing a Business Model
Fintech — SaaS + Transactions
What Is the Fintech Model?
The Fintech model combines two revenue streams: a SaaS subscription fee and a percentage of each transaction processed through the product. It is popular with companies like Stripe, Shopify, and Plaid.
Why Not Just Transactions?
Having 100% of revenue tied to transaction volume is riskier than blending it with a recurring SaaS component. Transaction volume fluctuates with economic conditions and customer activity. A base SaaS fee provides a stable floor of recurring revenue that is far more predictable.
Shopify as a Case Study
In Q2 2021, Shopify's revenue split looked like this:
| Revenue Stream | Amount | Share |
|---|---|---|
| Subscription (SaaS) | $334M | ~30% |
| Merchant solutions (transactions) | $785M | ~70% |
Shopify's standard plan costs $79/month. On top of that, they charge 2.9% per transaction for merchants using Shopify Payments — so as merchants grow their sales, Shopify's transaction revenue scales with them.
The Core Insight
By charging a relatively affordable SaaS fee and taking a small cut of each transaction, these companies align their revenue growth with their customers' success. The more transactions your customers process, the more you earn — while the SaaS fee ensures you're never starting from zero.