Treating infrastructure solutions as partners not vendors
If you're in fintech and treat your infrastructure partners like vendors, you're going to have a bad time. In fintech, you need your partners as much as they need you. You will integrate so deeply and have such a customized flow that you vs. them will be fully entangled.
If you negotiate a deal that favors your company at their expense in a big way, it's a sure lose-lose. Fintech isn't like SaaS when it comes to the software to build your platform. There aren't many other options because every aspect is so custom, and it's not an easy integration.
Your sponsor bank, payments processor, card network and platform integrations are a core part of what you build. You are an extension of their platform and they are an extension of yours. This isn't transactional and it's not short-term.
So the standard rules of contract negotiation do not apply.
It's not crazy, it's simple. You're partners, not vendors. But yet we've seen it play out time and time again - Stripe / Fiserv, Synapse / Evolve, Goldman Sachs / Apple, Solid / Lewis & Clark Bank. If you think you won at the expense of your partner's economics, you lost.
Let me play it out for you. Let's say you get that crazy good deal. You bake it into your pricing & it seems like a win. But if it's too good, your partner is losing money on your deal & they won't continue. The partnership just doesn't make sense.
But now you're stuck.
Because now you've promised unsustainable pricing that has to change. AND you've got a partner that is deeply integrated that you can't easily escape from. Get ready to have a bad time - fintech breakups are hard.
The hard truth is - you don't have the power, the partners do. You're a growth opportunity for them. But they're a requirement for you - hard to make it work w/o a core partner. I'm lucky I learned this early in my fintech career b/c it completely changed how I negotiate.
Now I frame our deals as partnerships. I focus on clarity & data - nothing to hide. I convince partners we're the best choice and I share why I need my pricing by showing our unit economics. They know when we succeed, they also do, and we're bought in on finding the right deal.
Our StratFin team at Sift, Chime & Unit saved our startups billions (with a B!) because of that strategy. We have deals with the biggest companies in the world, and our renewals still get better and better. Because the pricing makes sense and we're all winning.