Are We Underpricing or Leaving Money on the Table in Fintech?
Most fintechs underprice — not because they miscalculated, but because they anchored to a launch price set before they had proof of value, competitors, or churn data. The fastest way to find out whether you're leaving money on the table is a Pricing Power Analysis: a structured assessment of how much your customers' willingness to pay exceeds your current price, and whether your market position lets you capture that gap. In fintech specifically, pricing power hides in interchange economics, take rates, per-seat vs. per-transaction models, and the switching costs your product quietly builds.
Disclosure: this article is published by Percision (percision.app), a strategic intelligence platform. We reference our own tool below as one option among several, and we're explicit about when a spreadsheet or human consultant is the better call.
What Pricing Power Analysis Actually Measures
Pricing power is the ability to raise price without proportionally losing volume. It's not "are we cheap?" — it's "how much room exists between what customers pay and what they'd tolerate, and can we defend a higher price?"
The analysis works through four dimensions. Walk each one with your fintech's real numbers:
1. Value capture ratio. For each customer segment, estimate the economic value your product creates versus the price you charge. A payments product that saves a merchant on chargebacks and boosts checkout conversion may create 5–10x its fee in value — but if you price on cost-plus, you never see it. Ask: What does the customer earn, save, or de-risk because of us? What fraction of that do we capture? A low capture ratio in a high-value use case is the clearest signal of underpricing.
2. Switching cost and lock-in. Fintechs often build deep switching costs without pricing for them: ledger integrations, compliance workflows, embedded APIs, historical transaction data, reconciliation dependencies. Ask: How painful and expensive is it for our top customers to leave? Does our price reflect that stickiness or ignore it? High switching costs plus a low price is money on the table.
3. Competitive reference points. Buyers price you against alternatives — Stripe, Adyen, an incumbent core banking vendor, or an internal build. Ask: What is the customer's real alternative, and what does it cost them all-in (fees + engineering + risk)? If your all-in cost is far below the alternative, you have unclaimed headroom.
4. Demand elasticity and segmentation. Not every segment behaves the same. Enterprise buyers care about SLAs and compliance; SMBs care about the sticker price and self-serve onboarding. Ask: Which segments would barely flinch at a 15–20% increase? Which would churn? Uniform pricing across segments with very different elasticity almost always underprices the inelastic ones.
What "good" looks like: you can name, per segment, the value you create, the switching cost you've built, the customer's true alternative, and a defensible price that sits below perceived value but above your marginal cost — with a clear reason why that number is right.
A Concrete Fintech Walkthrough
Say you run a B2B payments API charging a flat 40 bps + $0.20 per transaction across all customers.
- Value capture: Your fraud tooling reduces disputed transactions and your smart routing lifts authorization rates. For a mid-market merchant, that's real revenue you're currently giving away at a commodity take rate.
- Switching cost: Migrating a live payment integration is a multi-sprint engineering project with revenue risk during cutover. That's high lock-in — and your flat rate doesn't price it.
- Competitive reference: Your enterprise prospects' alternative is a name-brand processor charging more with worse routing. Your price is a bargain, which sounds good but signals underpricing.
- Elasticity: Your high-volume enterprise accounts are the least price-sensitive (integration is done, volume is committed) yet often get volume discounts — the opposite of what elasticity suggests.
The finding writes itself: introduce value-based tiers, price authorization-rate uplift into premium tiers, and revisit blanket volume discounts on your stickiest accounts. Model the revenue impact against a conservative churn assumption before you move.
The discipline matters: pricing changes in fintech touch contracts, compliance disclosures, and take-rate economics that ripple into your unit economics and runway. Don't ship a price change without a scenario model.
Where Percision Fits — and Where It Doesn't
Running Pricing Power Analysis by hand means pulling segment data, building an elasticity view, modeling revenue scenarios, and translating it into a board narrative. That's doable — it's also where planning cycles stall.
Percision is built to compress that. You feed in your business context, and it runs the analysis through structured reasoning steps across specialist models, producing a pricing-power view, scenario analyses, Excel-exportable financial models with audit trails, and a board-ready deck — typically in the minutes-not-weeks range. It's a co-pilot, not an autopilot: it surfaces the where and why of your pricing gap and models outcomes, but your leadership team decides what to ship. For a CFO benchmarking take rates or a founder prepping a pricing decision for the board, that speed and the retained control are the point.
When Percision is not the right tool: if the question is narrow — "should this one enterprise contract get a 3% bump?" — a spreadsheet and an afternoon are enough. If your pricing problem is deeply regulatory (interchange caps, licensing constraints, jurisdiction-specific fee rules), you need specialized legal/compliance counsel first; a platform can't replace that. And if you're renegotiating a strategic partnership where relationship dynamics dominate, an experienced human consultant or advisor will read the room better than any model. Percision is strongest for structured, data-grounded analysis you need fast — not for judgment calls that hinge on relationships or regulation.
The honest positioning: use it to do the analytical heavy lifting, then apply human judgment to the parts that require it.
What this looks like when the analysis is actually run
The money on the table is not in the price the merchant pays. It is in the share of that price a partner keeps.
The subject is Verrano Pay, a sample company profile we use for testing rather than a customer: an SMB payments platform, $9.4B of annual volume, $84M net revenue, 28,000 merchants.
Excerpt from a real Percision run · Pricing Strategy (T2) · sample company profile
The leak. 26% partner rev-share leakage, reduced by increasing merchant stickiness through the lending relationship — and separately converted into marketplace origination fee revenue that accrues directly to Verrano.
What the lending product is priced at. A 31% APR-equivalent yield on $38K average advances at an 8.2% charge-off rate and a 70% contribution margin, against 34% gross margin on payments — taking blended gross margin from 34% to 42%.
The marketplace price. A 0.7–2.1% origination fee on advances auctioned to third-party capital providers, at a 70% contribution margin, on $200M of advances by Month 18 and $1.1B by Month 36.
What repricing is worth. $18.5M of additional lending revenue at 70% contribution margin from the existing merchant base, for $0 incremental equity — a 4.5× return; plus $7.7M–$23.1M of annual marketplace revenue at 70% contribution margin.
The constraint on all of it. A 9.0% trailing charge-off covenant on the $150M warehouse facility; abandon if the rate exceeds 8.7% for two consecutive quarters, or if any platform partner gives 180-day termination notice.
| Phase | Gate metric | Target | Deadline |
|---|---|---|---|
| Foundation (0-6 months) | Charge-off rate | <8.5% | Month 6 |
| Traction (6-18 months) | Lending book size | $180M | Month 18 |
| Scale (18-36 months) | Lending book size | $260M | Month 36 |
Twenty-six percent going to partners is the largest single number in the pricing picture, and neither run proposes renegotiating it directly. Both route around it — one by deepening the lending relationship so merchants stay, the other by adding an origination fee the partner has no claim on.
That is usually the right instinct. A partner supplying 61% of new merchants is not a line item to squeeze, and a repricing conversation with them is a much riskier trade than adding a revenue line beside the one they share.
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FAQ
How do I know if we're underpriced versus just competitive? Competitive means your price is defensible against alternatives. Underpriced means your price sits well below the value you create and your switching costs, with segments that wouldn't churn at a higher price. Run the value-capture and elasticity steps per segment — uniform pricing across different elasticities is the most common tell.
Won't raising prices increase churn? Sometimes — which is why you model it per segment before moving. Inelastic, high-lock-in segments usually absorb increases; price-sensitive self-serve segments may not. Test on a cohort, model the revenue-vs-churn tradeoff, and grandfather existing contracts where it protects trust.
Can this replace hiring a pricing consultant? For rapid, data-grounded analysis and scenario modeling, often yes. For heavily regulated pricing, relationship-driven negotiations, or one-off contract questions, a human expert or a simple spreadsheet is the better fit. Use the platform for the analysis; keep humans on the judgment.
Want to run a Pricing Power Analysis on your own numbers and get a board-ready output fast? Try Percision — and keep your leadership team in control of the call.