As a SaaS platform, you likely already know that offering payments can unlock a significant new revenue stream for your business. But as you expand your payments strategy, you’ll likely encounter the same question many software companies face: how do you increase payments revenue without taking on unnecessary risk and liability?

The good news is that becoming more involved in payments doesn’t automatically mean becoming responsible for merchant underwriting, compliance, fraud losses, or portfolio risk. Today, you have several options for embedding and monetizing payments, each with different levels of responsibility and liability.

Broadly speaking, there are two approaches:

1. Shared liability: Your payment processing partner retains final approval over merchant onboarding through shadow underwriting and assumes much of the financial and regulatory risk.
2. Full liability: You take full responsibility for underwriting, risk management, compliance, and your merchant portfolio, giving you more control but also exposing your business to significantly greater financial and operational risk.

Before deciding which model is right for your platform, it’s important to understand what payment liability actually involves, what responsibilities you can’t avoid, and where a payments partner can help reduce your risk.

In this article, we’ll cover:

• What are SaaS companies liable for when offering payments?
• Five common misconceptions about payment liability
• Why full payment liability isn’t worth it for most SaaS businesses
• When is it worth taking on full liability as a SaaS?
• How Fiska can help you get more from your payments without full liability

 

What are SaaS companies liable for when offering payments?

When you start evaluating payment models, it’s easy to think of liability as a binary decision: either you’re responsible for everything or you’re responsible for nothing. In reality, payment liability sits on a spectrum.

Even if you partner with a payment provider that handles underwriting, compliance, and risk management, you still play an important role in the payments experience. You’re responsible for delivering a seamless onboarding journey, supporting your merchants when issues arise, and ensuring payments feel like a natural extension of your platform.

The key difference is where the financial and regulatory responsibility sits.

With a full-liability model, your business becomes responsible for underwriting merchants, monitoring fraud, managing chargebacks, meeting compliance requirements, and absorbing losses when things go wrong. With a partner model, those responsibilities remain with the payment provider and sponsor bank, allowing you to focus on growing your software business rather than building a payments-risk operation.

Here’s how those responsibilities typically compare:

	Full-liability model	Partner model
Merchant underwriting	Your responsibility	Payment provider/sponsor bank
KYC/KYB verification	Your responsibility	Payment provider
AML monitoring	Your responsibility	Payment provider
Fraud prevention and monitoring	Your responsibility	Payment provider
Chargebacks and losses	Your responsibility	Primarily payment provider
PCI compliance	Your responsibility	Primarily payment provider
Regulatory compliance	Your responsibility	Payment provider
Merchant portfolio risk	Your responsibility	Payment provider
Merchant support	Your responsibility	Shared responsibility
Product and onboarding experience	Your responsibility	Your responsibility
Merchant relationship	Your responsibility	Your responsibility

 

Five common misconceptions about payment liability

When SaaS companies explore ways to grow payments revenue, the conversation often turns to liability. Not because they want the additional risk, but because they’ve been told it’s the price of greater control, faster onboarding, or higher margins.

In our experience, that’s not always the case. Many of the perceived benefits of taking on more liability can be achieved through other payment models – without assuming the same level of financial and operational risk. Here are five common misconceptions we hear:

1. Payments are an easy commodity and anyone can do it: Payment processing is complicated. It’s the gateway into the fintech and financial ecosystem, a highly regulated space with multiple players fulfilling different roles across the value chain. Payment risk is its own science, and you have large companies that specialize in just that. As a SaaS platform, whether you provide a CRM or a specialized vertical solution, your goal is to develop the best software possible. It’s unrealistic to expect to fully understand the nuances of payment risk.
   
   For example, at Fiska, we’ve found that many SaaS businesses consider becoming a PayFac (like Shopify) or merchant of record before they’ve fully optimized their payment strategy. They often underestimate the time and resources needed to do so.
   
   Related article: When does it make sense to become a PayFac?
2. You’ll provide a better service and a quicker turnaround: If you manage your own onboarding process, you’ll be able to do it faster because you don’t have to wait for a third party to perform due diligence. But generally, the time savings you’ll achieve are often negligible, maybe shaving a few hours to a day off the onboarding process. Most merchants wouldn’t be that concerned whether they are onboarded within an hour or in a day.
   
   Many SaaS businesses fall into the trap of expending effort and resources to handle full liability but achieve a relatively small gain. Your merchants won’t notice much of a difference between 99.99% and 99.95%, especially if it comes at a significant time and resource cost.
3. You’ll onboard more merchants: When you discover that a potentially good merchant was declined, it’s natural to want to resolve the issue and prevent it from happening again.
   
   But building an entirely new business function based on a few isolated cases isn’t the best approach. While you may be more willing to take risks than a third-party provider, there is usually a reason a merchant has been declined. If a merchant has poor credit, it doesn’t matter who is doing the underwriting: you probably don’t want to onboard them.
   
   Plus, many SaaS businesses operate within specific markets — like SME hospitality with low average transaction values (e.g., $5). In these cases, it’s relatively easy to create a user profile. The underwriting, regardless of who does it, will be much the same. But if you decide to do it yourself, you’ll have to spend a lot of time and money to take on full liability, for very little gain. This diverts time and resources away from doing what you do best: creating innovative software.
4. You’ll earn more revenue: While it is true that full liability will generate a slightly higher margin, this is nothing compared to the cost of setting up and managing liability. In most cases, you’ll be spending more than you earn.
   
   For example, say you wanted to become a PayFac with liability. You could be facing set-up costs of $30,000 to $50,000, plus additional compliance and platform fees. While you may make slightly more revenue per transaction, the maintenance cost of maintaining liability will effectively annul that revenue gain.
5. It’s the logical next step once you’re ready to take payments to the next level: Many SaaS businesses believe that, once their payments are set up and working, they must take on full liability in order to grow.
   
   But many large and successful SaaS businesses have seen huge gains from payments without liability. While you may decide to take on liability as your business grows, you never have to be successful. Instead, focus your efforts on optimizing your payment experience.

 

Why full payment liability isn’t worth it for most SaaS businesses

The key point to understand about assuming full payment liability is the risk involved. For instance, if a transaction is $100, you’re responsible for the entire amount, even if your profit on that transaction is only 50 cents. Say something goes wrong with the $100 transaction: to make up the loss, you’d need to process a significant number of other transactions at 50 cents profit.

As you can see, a few problematic transactions can start to cancel out the revenue gains of full liability.

There’s no point in maximizing your payments until you’ve optimized them first

Before considering how you maximize your payment revenue, it’s important to consider whether you’ve fully optimized it.

For example:

• Can you improve your conversion rates? Are you delivering the best possible experience for your specific vertical? Are you supporting the most relevant payment methods, such as recurring billing for subscription models? If you’re a POS solution, are there any more features you can develop to improve the in-person payment experience?
• Have you reached critical mass? Have you gained the biggest market share you can achieve? Or do you have room for further growth? If you’re still focused on growing your customer base and revenue, taking on liability isn’t going to help you much.

Ultimately, taking on liability should be one of the last things to do: it’s the icing on the cake. It takes a lot of effort and you get relatively little benefit from it compared to the associated costs and workload.

When is it worth taking on full liability as a SaaS?

It might be worth taking on full liability if:

• You’ve optimized as much as you can. You’ve reached critical mass, with a strong portfolio and consistent revenue.
• You’re a SaaS business with a complicated merchant risk profile and your payment service provider is taking too long to onboard.

Once you’ve optimized as much as you can, it might make sense to maximize your revenue by taking on full liability. 

You would benefit from:

1. Improved onboarding speeds: You can onboard merchants in real-time so they can start accepting in-store and online payments almost immediately. However, this approach comes with a health warning: underwriting has to happen at some stage. And it can be a worse customer experience if a merchant suddenly finds its payments have been frozen because the payment provider has just flagged them as high risk. We’d always recommend doing your underwriting first.
2. More control over risk assessment: Because you own the entire process, you can choose which merchants to onboard and the level of risk you’re willing to take on. This allows you to onboard more merchants, but your business becomes more vulnerable to fraud, and you’ll need to stay on top of anti-money laundering (AML) regulations.
3. New product opportunities: When you develop your own payment function, you’ll have the opportunity to create additional products and features, like Shopify’s CartRescue.

 

How Fiska helps you minimize payment liability without limiting growth

Most SaaS companies don’t need to become a PayFac or assume full payment liability to build a successful payments program. They need a way to increase payments revenue, maintain control over the customer experience, and onboard merchants efficiently without taking on unnecessary operational and financial risk.

That’s exactly why we created Fiska. Here’s how partnering with us will allow you to optimize your payments without taking on full liability:

Get a fractional Head of Payments to help you optimize your payments

Before considering a higher-liability payments model, it’s important to understand whether liability is actually the bottleneck to growth. In many cases, there are bigger opportunities to improve onboarding, increase merchant adoption, optimize pricing, or grow payments revenue without assuming additional risk.

That’s where Fiska’s Fractional Head of Payments model comes in. We’ll help you define your payment goals and ensure you have a clear understanding of payments beyond the mechanics of a transaction to include compliance, risk management, and industry regulations. This knowledge will help you make informed decisions, and you’ll have the support of a dedicated team of experts as needed.

Additionally, with Fiska, you get a partner that specializes in payment processing for small-to-medium-sized SaaS businesses. We understand your specific challenges and know what it takes to underwrite and onboard your merchants securely and efficiently.

Focus on growth while we handle the operational complexity

Taking on full liability means taking responsibility for merchant underwriting, risk management, compliance oversight, and ongoing portfolio monitoring. For many SaaS businesses, these activities add cost and complexity without creating meaningful competitive advantages.

With our partner model, your merchants are underwritten by our sponsor bank, which allows your team to focus on growing your platform, supporting your customers, and expanding payments adoption rather than managing the operational and regulatory demands of a fully liable payments program.

Retain control of the customer relationship with a white-label referral model

Traditional payment referral programs often force SaaS businesses to hand off a key part of the customer journey to a third-party provider. Merchants leave your platform to complete onboarding, receive support from another company, and interact with a separate brand throughout the payments process.

This creates a fragmented experience that can lead to lower conversion rates and less visibility into the onboarding process.

We take a different approach. Our white-label model is designed to help you deliver a seamless payments experience while maintaining ownership of the customer relationship.

Here’s what that looks like:

• Your pricing: Payment pricing can be a black box, so we prioritize transparency. Our pricing is based on interchange fees, you receive a share of the markup, and you can choose whether to add an additional markup on top. You also decide whether to offer fixed-rate or interchange-plus pricing to your merchants.
• Your customer experience: Payments become a natural extension of your platform rather than a separate service. Application forms can be embedded directly into your software and customized with your branding, creating a consistent onboarding experience for your merchants. You’ll also have visibility into the onboarding process, allowing your team to help merchants if issues arise. We can provide level 2 payments support behind the scenes when needed, but the relationship remains yours.
• Your growth: Unlike traditional payment providers that charge platform fees regardless of performance, Fiska operates as a true revenue-sharing partner. We only succeed when your payments program succeeds, which means our incentives remain aligned with yours as you grow.

Read more about our model: Why Fiska doesn’t charge fixed fees (and how our partnership model works)

Avoid payment liability while still growing payments revenue

Most SaaS companies don’t need to take on full payment liability to build a successful payments program. What you need is control over the customer experience, ownership of your brand, and a way to grow payments revenue without adding significant operational and financial risk.

A partner model delivers those benefits while leaving underwriting, compliance, fraud prevention, and portfolio risk to payments specialists. The question isn’t whether you can take on payment liability: it’s whether doing so helps you achieve your business goals. For a small number of large, mature SaaS platforms, the additional control may be worth it. For most businesses, however, the costs and complexity outweigh the potential upside.

That’s why many SaaS companies choose to partner with us. You retain ownership of the merchant relationship and payments experience while we handle the operational and regulatory burden behind the scenes.

If you’d like to explore how Fiska can help you get more from your payments, book a no obligation call  with one of our payment experts.

FAQ 

What payment liabilities does a PayFac assume?

When a SaaS company becomes a PayFac, it typically assumes responsibility for merchant underwriting, onboarding, fraud prevention, chargebacks, and ongoing risk monitoring.

A PayFac may also need to manage compliance requirements related to secure payments, tax compliance, refunds, and relationships with payment gateways and acquiring banks. These responsibilities can create significant operational and financial obligations that require dedicated payments expertise and infrastructure.

How can SaaS companies earn payments revenue without underwriting merchants?

SaaS companies can generate payments revenue by partnering with a payment service provider that handles merchant underwriting and risk management on their behalf. This approach allows you to offer online payments, recurring billing, subscription management, and integrated payment processing while earning a share of payments revenue.

By using an embedded or white-label payments model, you can monetize payments, improve customer retention, and enhance your software offering without taking on the responsibilities associated with underwriting merchants or managing fraud and chargebacks.

What’s the difference between shared liability and full liability?

With shared liability, a SaaS company participates in the payments ecosystem while a payments partner or sponsor bank retains ultimate responsibility for merchant approval, risk oversight, and key compliance functions. This allows you to offer payment processing capabilities and earn payments revenue without assuming the full financial exposure associated with merchant activity.

With full liability, the SaaS company takes primary responsibility for underwriting merchants, monitoring fraud, managing chargebacks and refunds, and maintaining compliance requirements. While this model can provide greater control, it also requires substantially more investment in payments operations, risk management, and regulatory oversight. For many SaaS companies, a shared liability model offers a more practical path to growing payments revenue while minimizing operational complexity.