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# Peace of Mind as a Product: How ToolTime Turned Payment Friction into Their Next Revenue Stream
- URL: https://www.embeddedfinancereview.com/podcasts/peace-of-mind-as-a-product-how-tooltime-turned-payment-friction-into-their-next-revenue-stream-2fa2d/
- Published: 2025-07-08T13:09:18.000Z
- Updated: 2026-09-14T20:10:29.000Z
- Description: Discover how ToolTime built embedded finance for German craftspeople, choosing embedded banking over open banking. Real revenue insights from 20K+ users.
- Author: Lars Markull
- Tags: Podcast, Embedded Payments, Embedder, Vertical SaaS, Germany, Craftmen, ToolTime, Adyen

📄

Prefer to read? The full transcript of this episode is available [here](https://www.embeddedfinancereview.com/marcel-mansfeld-tooltime-transcript/).

[Marcel Mansfeld](https://www.linkedin.com/in/marcelmansfeld/?%5Fbhlid=84ff7dec474e2eec0801ab920cffa390bc9d4099&ref=embeddedfinancereview.com), co-founder and CPO of [ToolTime](https://www.tooltime.app/?%5Fbhlid=c119c97e630547e17a57d28c35cfcfebbb137e64&ref=embeddedfinancereview.com), joins the Embedded Finance Review podcast to share how his company transformed from a digital workflow solution for German craftspeople into a comprehensive embedded finance platform. After raising €55 million and serving over 20,000 customers, ToolTime launched ToolTime Pay to address payment friction in the traditionally cash-heavy craft industry. This in-depth conversation reveals the strategic decisions, technical challenges, and customer insights that guided their embedded finance journey from concept to successful implementation.

## Building Embedded Finance Products for Vertical SaaS Companies

- **Start with product maturity first** \- ToolTime waited until they had established core ERP functionality before adding financial services, ensuring their primary value proposition was solid
- **Customer base size matters** \- With 20,000+ customers, ToolTime had sufficient scale to make embedded finance viable since most sales happen within existing customer base rather than new acquisition
- **Resource commitment is significant** \- Embedded finance requires dedicated product teams, ongoing customer service, and long-term maintenance that diverts resources from core product development
- **Regulatory considerations** \- Adding financial products means navigating compliance requirements and following specific rules for digital payment processes

## Payment Methods and User Experience in B2B Embedded Finance

- **Bank transfers dominate European B2B** \- Despite offering card payments, bank transfers represent 98-99% of payment volume, with cards only capturing 1-2% of transactions
- **Mobile-first payment experiences** \- Integration with email invoices and one-click payment buttons improves collection speed and reduces friction for busy tradespeople
- **Industry-specific payment behaviors** \- Higher transaction amounts in craft industry (renovations, installations) make card payments less suitable compared to traditional bank transfers
- **User experience trumps technology** \- ToolTime prioritized seamless workflows over technical solutions like open banking APIs that create authentication friction

## Open Banking vs Embedded Banking: Strategic Technology Decisions

- **Authentication challenges with open banking** \- PSD2 requirements create user experience friction that doesn't align with less tech-savvy customer segments
- **Integration limitations** \- Open banking APIs don't provide the same level of balance integration and project efficiency tracking that embedded accounts enable
- **Customer trust factors** \- Traditional craftspeople prefer familiar banking relationships and are hesitant to adopt new authentication methods or bank switching
- **Technical flexibility advantages** \- Embedded banking platforms like Paymi offer more customization options for building industry-specific financial workflows

## Revenue Models and Monetization Strategies for Embedded Finance

- **Transaction-based pricing structure** \- ToolTime charges 1% on bank transfers (capped at €10) and percentage fees on card payments for transparent cost structure
- **Value beyond payment processing** \- Primary monetization comes from automated invoice reconciliation, payment tracking, and dunning processes rather than pure transaction fees
- **Peace of mind positioning** \- Customers pay for complete workflow automation that eliminates manual payment tracking and reduces time spent chasing receivables
- **Revenue diversification benefits** \- Embedded finance provides additional revenue streams beyond core SaaS subscriptions while strengthening customer retention

## Customer Success Factors in Embedded Finance Implementation

- **Customer-driven product development** \- ToolTime's 50,000+ customer insights database guided feature prioritization and payment method selection
- **Industry-specific pain points** \- Addressing cash flow challenges where unpaid invoices can threaten small business operations creates strong customer value proposition
- **Integrated workflow benefits** \- Seamless connection between project documentation, invoicing, payment, and financial reporting reduces administrative overhead
- **Gradual feature rollout** \- Starting with basic payment processing and expanding to automated reconciliation and dunning allowed for iterative improvement based on user feedback

## Future of Embedded Finance in Vertical Software Markets

- **Expansion beyond payments** \- ToolTime plans additional financial services including business accounts for supplier payments and potential lending products for project financing
- **Generational shifts driving adoption** \- Younger craftspeople more open to embedded financial solutions compared to traditional banking relationships
- **Market consolidation trends** \- Vertical SaaS companies increasingly need embedded finance to remain competitive as customer expectations evolve
- **Long-term strategic advantage** \- Deeply integrated financial services create switching costs and differentiation that pure software solutions cannot match