At The Banking Scene, we believe some of the most valuable insights emerge from conversations—not just presentations. That was certainly the case in this recent interview with Chris Jones, Managing Director at PSE Consulting. Chris sat down with me for a candid discussion following his roundtable on SaaS and payment strategies. Rather than delivering a structured keynote, Chris facilitated a session driven by participant questions—unfiltered, real-world concerns that reflect the true state of embedded payments in Europe.

Chris is known for his sharp analysis, data-driven perspective, and his ability to cut through industry hype with grounded observations. His work at PSE Consulting—particularly the extensive field research they conduct—brings a unique lens to the conversation. This exchange brought together field experience, merchant realities, and strategic foresight in a way only Chris can deliver.

What followed was a wide-ranging exchange that touched on the divergence between US and European markets, the pitfalls of targeting horizontal SaaS platforms, the evolving regulatory landscape, and the real (not hyped) role of AI in financial services.

You spoke about how to build a winning strategy to engage SaaS providers and ISVs. For those who weren’t there, how do you go about it?

Chris Jones: Well, the session wasn’t a presentation. It was a roundtable format where we let the group guide the discussion. One of the first topics that came up was how many players benchmark their expectations on what they see happening in the U.S. But that’s often a mistake.

The U.S. and European markets are fundamentally different—different payment infrastructures, different regulatory environments, and different merchant behaviors. For instance, in Italy, many merchants still rely on their bank branches for day-to-day financial services. That creates an ecosystem where software companies don't necessarily have the "right" to offer financial products. Contrast that with Germany or the UK, where there’s more openness to software-led financial services.

We did 500 interviews in Europe and another 500 in the U.S. The gap between perception and reality is huge. While U.S. merchants often welcome embedded payments from SaaS providers, in parts of Europe—Italy, for example—that's still met with a fair bit of skepticism.

One question I heard floating around was whether vertical SaaS or horizontal SaaS offers a better opportunity. What’s your take?

Chris: That came up too. Vertical SaaS usually wins. Back-office applications like accounting or CRM are widely used but don't generate much transactional value. Most of the flows are SEPA transfers that cost next to nothing—so there's little margin to share.

Payment solutions embedded in front-office applications, like hotel booking or restaurant management platforms, deal with card payments, refunds, and chargebacks—complexity that adds value and allows room for monetisation. That’s where the real opportunity lies. The advice we typically give: avoid back-office, go niche, and choose sectors where payment complexity is a pain point.

There are companies offering payment solutions just for laundromats. That level of specialisation is increasingly common—and it works. What might seem niche at first glance is often precisely what delivers scalable value.

Regulation is often seen as a roadblock. What role did it play in your discussion?

Chris: It came up, but interestingly, not always as a negative. In the U.S., the regulatory stack is often so layered that it becomes unclear who owns what responsibility—especially with multiple intermediaries involved. That’s a problem from an AML perspective.

Europe, for all its perceived complexity, is actually more transparent in many ways. Most entities are directly regulated, and it’s easier to map responsibility. If you work with the right partners, the clarity can actually be a strategic advantage.

That said, regulation doesn’t define your strategy—it shapes the constraints and opportunities within it. It’s about understanding the boundaries and then working creatively within them.

Let’s talk product scope. What’s the smart play when launching embedded finance services?

Chris: Focus on payment acceptance. That’s the core product that most merchants understand and are willing to adopt. In the U.S., 80% of merchants say they’d consider accepting payments through a software platform. In Italy, that drops to 30%.

But as soon as you get into bank accounts, lending, or FX, interest and maturity fall off dramatically. That doesn’t mean you ignore those products forever, but don’t start there. Start with payments, get it right, and then expand. Build from what is already accepted and proven to generate margin.

What’s the biggest challenge in executing a SaaS payments strategy?

Chris: It’s not just about building an API. You need a full go-to-market strategy: who to target, how to qualify them, and how to support them. Don't waste your time if a software platform doesn’t have a head of payments. If payments are an afterthought, they won’t sell your solution effectively.

Even once they do sign, they need support. Most don’t know what a chargeback is. They need education, integration help, customer support. You need headcount to make that happen. It’s not scalable without investing in people.

This is where many providers underestimate the effort. It’s not just the software that needs to scale, it’s the human infrastructure around it.

We cannot have an interview without touching on AI. Has the recent AI hype wave changed anything?

Chris: Not really—not in payments. We’ve used machine learning for years: fraud detection, transaction optimisation, things like that. The newer GenAI stuff is interesting, but B2B financial services aren’t where it’s most useful yet.

There is potential, though. Take sentiment analysis during a customer service call—that could improve agent performance, or even drive empathy in interactions. But the chatbot problem remains: customers get frustrated if it doesn't help. Any use of AI must be thoughtful and clearly disclosed.

We’ve seen early experiments—like the example of the Belgian bank that used AI to identify customer sentiment through different questioning patterns—but those are still edge cases, not yet mainstream.

Last question: how do we better align industry vision with customer readiness?

Chris: Start by recognising that the gap exists. Too many projections are based on best-case assumptions. Our research shows it’s not just your PSP struggling to gain traction—everyone is. That’s actually reassuring for many players.

The path forward is picking the right partners, setting realistic goals, and building the team to support them. And knowing that just because someone else claims to be on a rocket ship doesn’t mean they’re not facing the same headwinds.

That honesty—grounded in real research, not just boardroom ambition—is what builds strategies that last.

Join us at our flagship conference in Brussels on May 22, where our Payments track features top-of-mind topics for payments professionals, including The European Payments Initiative, Instant Payments, How Payments will Drive Legacy Transformation and Deliver Business Value at The Same Time, The AI Edge in Payments and a whole lot more. Don't delay, secure your seat today!