With payments technology getting more and more complicated — and fraud evolving at a similar rate — how can SaaS companies build a winning payments strategy in a rapidly changing payments industry?
Nikita Skitev of Payments Strategist joins host Joshua Silver to discuss this question and much more. They covered:
- The best way to learn about payments and fintech quickly when you’re just starting out
- Hidden costs of an all-in-one “walled garden” solution, and when to choose open ecosystem providers instead
- 6 key components to payments strategy, and why platforms must proactively manage their own fintech roadmap
- Two common types of fraud, and how SaaS platforms can grow volume without taking on excessive risk
- How to holistically evaluate a payment solution from both the payer and payee perspective – and why software companies need to consider both
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Joshua: Hey everybody and welcome to another episode of the Payment Strategy Show. I’m Joshua Silver, founder and CEO of Rainforest. We help software platforms embed payment processing into their application to increase profitability and improve customer retention. I’m here today with Nikita Skitev based in Raleigh. He’s got over a decade of experience in payments product management, and he is currently the author and host of paymentstrategist.com. Nikita, welcome to the show.
Nikita: Hi Joshua, thank you for inviting, happy to be here.
Joshua: Tell us a little bit about your background. How did you first get into payments?
Nikita: It wasn’t by chance or surprise, it was very intentional. When I joined a large company as a product manager, there were so many different options where to work on and then I chose payments. And there are multiple reasons why I choose payments and why I think payments is a fascinating area. The first thing that comes to my mind is that there is always something new in payments. And if we look at the buzzwords in the industry for the last five to 10 years, right? Crypto, account to account payments, paid by bank, AI. Now it feels like a stable coin is the theme of 2025. There’s always buzzwords, there is always something new. And today’s payments, they are so different comparing to yesterday payments.
The second reason, I would say that there is always something to learn because payments are so complex. You can learn payments from the merchant perspective, but when you’re going a layer deeper, there is so much more if how to plug the payment provider to your platform and you can do it very good. There is another layer, how this payment provider works, all these integrations with acquirer, with Visa, MasterCard. And then if you know this layer, you can go again with the layers deeper and understand how settlement between banks works and all these different aspects.
So I feel like payments is the area that a person can choose and work in these for their whole life. And they will be always learning something new. There’ll be always like some kind of magic that’s still a bit unknown, you can go and learn. And another reason that I would say payments, they are attracting so many interesting people. And I really feel fortunate to be surrounded by people smarter than me and to learn from these people and being in the payments community. I really like the payments community. And again, super happy to be part of it.
Joshua: That’s great. I definitely agree with you. The FinTech community, the payments community really bands together. In other industries, people go to conferences and things, but this is one industry where there’s so much institutional knowledge, so much happens behind the scenes. I’ve seen a lot of collaboration between people more so than in some other industries.
I often get asked, if I’m new to payments, how do you learn it? Where are some of the best resources you’ve seen for maybe someone who’s taking their first journey into payments to go look to learn? Because it’s one of those things that is very deep. There’s a lot of institutional knowledge. So where are some of the ways and resources you’ve used to learn about payments and FinTech quickly?
Nikita: When I started, I was missing resources. There are not that many books about payments that you can read, that you can learn. And there are also not that many resources available. And I feel like payments area and the players in the payments, they’re a little bit protective of the knowledge they have. For some reason, you cannot just go to a card network website and learn how they work. I would say the best learning experience is to learn by work. If you can start doing something, if you have a startup or can start accepting payments, that would be the best solution. And by start doing something, you’re still start learning.
Joshua: I know you started the Payment Strategist. What inspired you to get that going?
Nikita: Yes, I recently started paymentsstrategists.com. Which is the newsletter. And a little later, I created a YouTube channel and podcast where I interview payments experts, creating the platform to share their insights. There are a couple of reasons why I noticed an opportunity for media.
Payments are getting simpler and easier for merchants to embed and start working with.
Today, it’s not a blocker for a business to enable payments. There are so many payment providers to choose and you can start working with any payment providers. But when you go to a next level and want to implement like a complex payments workflow, that’s where it’s becoming more problematic and harder to implement. There are so many different payment providers that it’s really hard to choose and navigate what offering is. I also see that there are new types of offerings appearing on the market. In addition to regular payment service providers, anti-fraud solutions, there are also marketplace solutions, platform solutions, payout solutions, chargeback management systems. So if we look at all these categories of vendors, it’s hard to pick the right one for your business and the one the merchant will be happy to implement for their lifetime.
Another reason is that it’s driven by merchants. Merchants themselves are getting into more complex payments flows. Like Uber or Airbnb, the payments flow for these types of services is extremely complex. So they are marketplace, they’re platforms, they have B2C, they have B2B, they have subscriptions, payouts, and of course like Uber, Airbnb, they’re extreme examples but there are more and more merchants for providing more complex payment solutions and payments flows. And again, to introduce this payment solution, you need to choose the right vendor and right and implement it correctly and go through all the compliance rules, all the regulations. So yeah, I see my mission and the mission of the Payment Strategist is to explain these really complex things and drive merchants to pick the right solutions and to guide them so that they don’t feel lost.
Joshua: I love when people talk about simplifying payments. One of our core values at Rainforest is to ruthlessly simplify because payments tend to be so complex when we can simplify things for our clients, it improves the ecosystem.
I saw recently you published an article talking about why some subscription merchants choose standalone billing when they really could have an all-in-one solution like Stripe billing. This was interesting because we work exclusively with SaaS platforms. We don’t actually work directly with merchants, many others do, but we see platforms wrestling with similar trade-offs. For example, a platform may be using Stripe Connect. They’re also using Stripe billing. At some point they want to move the payment volume from Stripe Connect, but they’re really dependent because they’re locked in with Stripe billing. And so, at that point, they’d have to move to a different billing engine or build their own before they can even think about moving their payments volume. And so could you maybe walk us through what are some of the unique challenges with recurring payments and how do you think about this bundling versus unbundling of recurring versus payment processing versus the other pieces?
Nikita: The topic of my post and what I see is happening that Stripe is an example of, as you mentioned, right? Like all-in-one solution, they provide billing and payments for this billing engine. For businesses who use the solution, of course it’s the easier, like the less vendors to manage and the easier option because these options work great with each other. Stripe billing with Stripe payments, merchants, satisfied with this approach, they can be happy and use this solution forever. However, I see like if you want to take a step right or step left, and if you’re considering any of the payment options not supported by Stripe, you’re limited by Stripe. You cannot use Stripe billing with other providers until recently. As Stripe is noticing that, and now with the new services, you can start accepting payments through other payment providers with Stripe billing. I think they recognize it and they see it as a limiting factor for growth of the Stripe billing. However, it’s still not possible to enable Zelle or other payment methods through this new solution from Stripe. So that’s where some merchants who are using Stripe billing can still feel a little bit limited.
So they are thinking about how they can provide more flexibility for merchants to stay in the Stripe, in the Stripe ecosystem and use different solutions, different payment methods and different payment providers. Yeah, I think it’s like very interesting dynamic on this market. And it’s at the end of the day, it’s for merchants to decide if they want to use all in one solution, right? Or multiple vendors and plug them with each other. What is really important and what I see as the mission of the payment strategist is that merchants can make these decisions when they have all the context, when they know their five years roadmap and they understand that their solution will work for them. And it’s not like the solution for this year and next year we’ll need to migrate to something else, which can be very costly.
Joshua: Absolutely. I have this conversation a lot with folks. It’s interesting. Stripe has started to meet down the path towards a more open ecosystem. I think it’s really hard though, when you look at companies like that, whose core DNA for so long was the walled garden provider. To move from that mentality, that DNA to a more open ecosystem approach, I think is really challenging. It’s one of the things when we started Rainforest, we said, we’re gonna take an open ecosystem approach from day one that feeds into product decisions, how you architect the solution, how you talk about opportunities with prospects. So I think the jury’s still out on how much adoption Stripe will see with that more open ecosystem approach versus marketing talk. Beyond recurring billing, I wish on software platforms think about all in one best of suite versus open ecosystem, best of breed approach. What are the other things I should be thinking of?
Nikita: One example I have is similar to web hosting providers. There are different clouds like AWS, Google Cloud, Microsoft Azure. Some businesses decided, okay, to live in one cloud. Some businesses only use AWS, for example. And if AWS experienced some issues, that’s a known risk. And they’re accepting it, but they’re using all the AWS services and they’re relying only on AWS services. So if Google introduced something new and something interesting, they can use it, but they’ll start take their data to use with Google and that will be like not very convenient option. And some businesses, they go like multi-cloud or even their own cloud. So I think in payments, it’s also very, yeah, is quite similar that some businesses, they rely on the single provider and they can help with this. So they’re using something like all in one solution. But again, I wish all businesses, they make this decision when they have all the context and when they know what they’re choosing. One very specific option, what I think is very important that I see that a lot of businesses, they actually introduce a marketplace model. I see that a lot of businesses want to be in a business of moving funds and touching funds. So for these platforms staying in one solution, maybe beneficial because they are not touching funds themselves, right? They are collecting funds through the platform and they’re sending payouts and taking their fee without touching funds. I see it can be a little bit problematic to introduce a multi-provider approach if you don’t want to touch funds. You need to take funds from one provider, send it to another. It can be a little harder to introduce comparing to all in one solution.
Joshua: And how big do you think a payments platform or merchant needs to be before they would even consider?
Nikita: That’s a great question. I love this question. Should merchants actually from the beginning think about solutions like multi-provider and going through payment orchestration layer? I feel it’s very important for businesses to understand their roadmap timeline and complexity of their payments since the beginning. If they’re just doing a simple e-commerce store or a simple subscription service, maybe it’s not their core problem to solve. So just to relying on different providers that may be not the biggest problems that they need to solve. But again, they need to understand how complex would be their payment infrastructure in five, in 10 years, and to make a decision based on this and to design the system based on this.
Joshua: You’ve got a lot of experience managing payments products. You work with SaaS, you work with fintech, you work with merchants. I’m sure you have strong opinions about what payments experience, both for merchants and for end customers, should look like any best practices or lessons learned that you could share with some of our listeners.
Nikita: That’s actually how I name my resource payment strategist and I see you are thinking quite similar. I think the best advice I would give to all merchants is to create payment strategy. Basically to collect all the insights internally and to think about their business strategy and how this business strategy should be supported from payments.
I define 10 different parameters in the payment strategy. Basically is to understand their checkout, their risk model, their anti-fraud model, their chargeback management, refund management, their geo-expansion, and to think about all these things and how they affect each other. Because I think it’s also very important to understand that in payments, if you move like one parameter, it affects all others. So if you remove the certain checkbox from the checkout page, now the conversion is higher, but you’re violating some compliance rules. Or maybe you can see a higher chargeback rate.
I would say that’s the biggest advice I would give to all merchants, to try to think internally and define this payment strategy, what I would also prefer to call proactive versus reactive approach. So being less reactive to market and less reactive to what your provider is going to suggest to you. Hey, we have a new feature. Did you try this? Hey, we have a new payment method. I think the payment strategy should be very proactive, defined from the business needs, not from what’s available. Because I’m always observing these reactive approaches where businesses are like, hey, we heard about these new cool things, but I think that’s more distracting rather than supporting the business. So having a payment strategy, I would say that’s the key and that’s the most important part, with understanding how different parameters of this strategy affect each other.
I would say another important part for, or for platforms and marketplaces, in my opinion, is the risk management. There are so many different attack vectors for platforms and marketplaces that the payment strategy should definitely include the risk management strategy.
I’m not saying you need to write all these documents and they should be like a 20 pages doc, but at least should have a plan and understanding of potential attacks and how to react to them. For platforms, it can be very tricky because platform manage both sides of the transaction like in buyer and the seller, and actually nobody is prohibiting the bad actor to register to account as a buyer and seller and sending to each other from stolen cards. That can happen very often, having a plan monitoring in place and having some tools in place that can limit this or resolve these problems. I think it’s very important. So I would say two things for SAS and for platforms, having a strategy and understanding the risk profile and all the risk factors.
Joshua: I think that’s great advice. I often tell my leadership team and new executives and folks I mentor, don’t let your email inbox be your task list. If someone’s pushing you things and telling you what to do, those are the most important things in your business. Just because a payments company releases a new feature, that doesn’t mean for you that is the next most important thing. Being true to the strategy that you’ve outlined and understanding what your needs are, if you’re in business, making sure you’re focused on the most important things, couldn’t overstate how important that is. And then the second piece, let’s talk more about the risk. This is an area where I see folks who are not in the payment space and the least understanding. I think people intuitively, I go to a restaurant, I run my credit card and it processes. The risk management is one of those things that’s just below the surface. So I see people see it. We talked to a lot of our clients and SaaS companies about who’s on the hook for risk. Are you, is the merchant, is your payments provider? Where does that balance sit? And there’s a lot of conversations about different levers that you can pull. For example, I can eliminate all of your fraud, 100%. I just won’t process any payments, right? So your approval rate goes from 90 something percent to zero, but you have no fraud. But first, so we can get your approval rates way up, we’re gonna have 100% approval, you’re definitely gonna have some fraud. And so finding the right balance between approval rates, fraud, the costs, risk management, that’s really challenging. And it’s unfortunate, because I’ve seen a lot of people fly too close to the sun, so to speak, they get burned by a fraud incident. Your example of closed loop fraud, where a bad actor signing up is both the merchant and the payer just cycling funds through, it can get really bad, really fast. We’ve definitely seen that from some of our platforms and bad actors there. We have a whole risk team that monitors that. If a software platform or a merchant wants to figure out how to drive down fraud, any other tips you’d have for them? I think that risk management piece is just so important.
Nikita: It’s very important to understand different types of fraud and to classify them. The first fraud is a typical e-commerce fraud, when someone is using stolen cards to purchase items on a website.
Merchant, they won’t see immediate effect from this fraud. What they’ll see, they’ll actually see increase in sales, and maybe they will be happy for the day or two. But then the next day they’ll see, oh, I started getting the chargebacks for the transactions that already happened. For this type of fraud, the kind of typical anti-fraud management systems and verifications of each transactions, these are really important. I’m a big fan actually, and maybe it’s a little controversial opinion. A big fan of 3D secure and of the PSD2 regulation in Europe and to require the validation from the customer for their initial payment or when they’re adding payment method to the provider. I think that’s a great thing, and I’m really a big supporter of the idea that we need to have something similar in the United States. It’s very important for merchant to analyze how is critical for them to have this fraud because if merchant is selling just digital services, so they basically don’t care. They can, of course, they don’t want to violate card networks rules, but the cost of good for them is zero, so they would most likely prefer to prioritize the authorization rate.
Let’s talk a little bit about the different fraud. The type of fraud that I witnessed a lot is the account takeover. So basically for services that allow to attach card or to another payment method, there are bad actors who are brute forcing accounts on the platform with the payment method attached, and they use these accounts to purchase goods on the platform. And again, it’s hard to identify at the beginning, but what here, what I would advise is that if the platform understands the tricky customer or they’re logging in from another payment provider, maybe you can request a CVV code again.
And another type of fraud, what I already mentioned, where an actor can create buyers out of account on the platform. And don’t think there are a lot of actually solutions to identify and to manage it. There are some platforms there like taking care of this, but I would say here it’s more on the platform side to manage it themselves rather than on a payment provider. So yeah, that’s not a very good use case to have. Most of the platforms they’re solving it with strict rules for the sellers for onboarding and like with hard KYC requirements, right? With identifying their identity. So it’s not that easy to create like a seller profile, but these can result in lower seller adoption. So again, that’s a balance here as to all the previous fraud. So that’s not what we mentioned, but luckily there are some tools right now that merchants just need to be aware and to implement.
Joshua: Yeah, and just for our viewers who may not know, 3D secure is a message that merchants can employ to shift buyability for high value goods and services. So we see this in the US primarily in industries like travel and leisure, where you buy an airline ticket or hotel, you can get a reservation ahead of time that’s prepaid. And you may see as a consumer, a pop-up that says go to your bank and verify, or you may get a text message out of band from your bank with the codes. Very unusual in the US to see broadly, but really mandated in Europe. And so we can learn a lot, I think from the European model at the same time in the US, we benefit from the ease of checkout and that low friction. So back to what we talked about earlier, the contention between having higher friction at checkout, but lower risk and vice versa. At Rainforest, we actually are one of the platforms that offers 3D secure. And we, for several industries, had a lot of fraud that way, even in B2B industries like trucking, towing, transportation, logistics, we see it employed for some super high value goods and services, high end jewelry, things like that, where the merchant wants to know that they’re protected and there’s high intent to purchase are always good places. And so I would recommend if you are having fraud problems as a merchant or a platform, make sure that your payments provider offers these types of tools and figure out how to situationally apply them. It’s very often not one size fits all, it’s don’t run every transaction through. You need to figure out where that right balance between the friction and the risk is.
Nikita: I like what you said that in the US 3D secure is a little unusual. And I would say it’s, I think it’s a little bit like an understatement. I think a lot of customers, they’re surprised to see the 3D secure pop up. They’re like, what’s going on this website? And I think most of them think that it’s something fraudulent, comparing to Europe, where it’s just the standard experience and everybody already knows how to use it.
Joshua: For sure. We’re almost out of time. Anything else that we haven’t covered, any particular nuggets of wisdom that you’ve learned over your decade plus of payments that you want to share?
Nikita: From the higher level perspective on the payments for platforms, I would say there are three things which are important here. We can maybe divide by three groups, like all the important parameters of the payments performance. Buyer side, the seller side, and everything in between. Classification like this really helps to define the vendor or to create a payment strategy that will help you to better define the partner.
On the buyer side, of course, it’s the checkout experience that widgets or SDKs, that platform can embed to their checkout process. Maybe it’s not only on checkout, but maybe some other buyer reporting deals, different payment methods, like 3D secure, what we just discussed. It’s authorization rate and that’s performance. So everything on the buyer side, it’s basically all traditional payment performance parameters.
And on the seller side, that’s like a unique factor for platforms because they have sellers. And it’s not only onboarding. Onboarding, of course, is important, and KYC is very important. But if we think about it, again, we’ll take a step back and we’ll think about, for example, scalability. If a platform wants to start offering their services to sellers in a new country, for example, next year, they need to think that their payment provider supports onboarding in all these countries and is compliant with the regulations.
Also, on the seller side, it’s important to provide, because sellers are also users, also customers, and it’s important to provide great customer experience. So here, we need to think about relevant payment options or maybe we can call it payout options. And also, when they’re receiving funds, maybe timing of the receiving funds is also important. Can they receive– Yeah, the payout timing. Yeah, like a payout timing, or maybe something about the loan they can receive sooner before they receive the payment itself. So yeah, there are actually a lot of parameters that we can think about on the seller side and how to provide a better seller experience on our platform for our sellers. Again, from the payments perspective, for them to be happy. If the platform operates more on the B2C market, also where sellers are businesses, that’s where you can think about all the reporting, reconciliation, basically. That’s another experience that you need to take into consideration for these sellers.
And when I talk about everything in between, it’s basically all the tooling of the platform that your platform will be using. And there are actually also a lot of things here, like all the management of chargebacks if it’s on a platform. So the tool that you need to consider, all the risk management, what we just discussed, monitoring, reporting, these are the tools that you will be using as a platform to manage payments between buyers and sellers. When businesses are evaluating platforms, I would be thinking about these three groups and will think how this helps me to drive my business.
Maybe one thing, just a little bit outside of it, is that looking at the data and at the payments performance is really important. Right. And I know not many merchants are looking very deep into their data. And for platforms, I think it’s crucial, and again, to understand your buyer side and the seller side. And when I talk about monitoring and analysis, these are two different things. With analysis, you can really deep look into the data and understand your success rate, authorization rate, refund rate. And for monitoring, that’s where you want to stay ahead of a sudden drop of authorization rate or sudden increase of chargebacks.
I would say use all the data and create a great tool for payment analysis that’s important and also a great tool for monitoring to stay on top of things.
Joshua: All valuable things as you’re thinking about payments performance. Thank you so much, Nikita, for being with us. You can contact Nikita. He is the author of paymentstrategists.com. Thank you so much for being with us. I’m Joshua Silver with Rainforest. Have a good day.
Nikita: Thank you so much.
