Europe Fintech Thought Leadership

m3ter: How Clever Pricing Strategies can Create Fintech Heavyweights

With both funding and deals in the fintech space slowing down dramatically and market volatility persevering, many fintechs are struggling to scale. Fintechs may be leaving money on the table by sticking with the same pricing strategy they decided on day 1.

Griff Parry, CEO and co-founder of pricing operations platform m3ter shares his thoughts on what fintech businesses need to know about identifying and implementing the right pricing strategy to help them clear a path to profit

How clever pricing strategies can create fintech heavyweights
Griff Parry, CEO and co-founder of m3ter

As we enter the latter half of 2023, the industry continues along a path of market volatility, slow funding environments and regulatory compliance pressure that’s preventing companies from scaling effectively.

For fintech leaders, the key to navigating these economic challenges and driving sustainable profit is to make sure every tool in your holster is mobilised to support optimal growth. Most often the simplest growth levers are overlooked in favour of churn and conversion, leaving money on the table, and nowhere is this clearer than pricing.

Embracing the great fintech shift

The global fintech market is a highly saturated and competitive space, subject to the gruelling implications of the economic downturn. Deal value plummeted by 92 per cent  at the end of 2022, and companies are facing high demand from their customers, putting pressure on fintechs to differentiate themselves and continue to scale.

One competitive weapon under the spotlight is pricing optimisation. Fintech success story, Stripe, recently advised that both early and later-stage companies should prioritise the assessment of their pricing processes for greater stability and optimised revenue.

As customer demands and the funding environment evolves, pricing model transformation can be an invaluable lever to drive growth, reduce churn and increase profitability. In fact, a study by Y-Combinator found that if businesses increase efforts by 1 per cent on acquisition, it will bring an average return of 3.32 per cent, but moving that same effort to retention delivers 6.7 per cent, with pricing securing the most impact. Yet despite its benefits, many businesses – especially those involved in any legacy finance processes – are in the habit of keeping to pricing models set out at launch.

Kickstarting transformation

Companies can be hesitant about changing their strategy because it poses a number of implementation challenges, and there are a lot of customers at stake if pricing goes wrong. While careful planning is indeed necessary to successfully launch new pricing models, with many alternate growth levers slowing down, the benefits outweigh the costs. Those reassessing their pricing architecture can also find, and fix, severe revenue leakage that they didn’t know existed, saving them time and efficiency in auditing – a familiar headache in the fintech space.

The best place to start is to assess current pricing strategies and work out where there is room to innovate. If a company has not touched its pricing for four years or more, it’s likely they have collected some serious leverage through product updates, good customer relationships and positive use cases.

From here, businesses should understand where their product is successful, which functions have been added to the product but not yet incorporated into pricing and packing, and where the customer finds true value – is it determined by the price, or in product benefits?

It’s also important to look at the cost of customer acquisition to determine if the product is a hard or easy sell. Taking into account usage, session timings and use-cases, fintechs should have a solid data-driven understanding of their customer profile and how they interact with the product. Armed with this full picture, fintechs will have the knowledge required to start testing behind the scenes with pricing to unlock optimal models that may not have seemed possible prior to experimentation.

One size fits all, and other myths

Fintech companies can utilise many different complex pricing structures, such as usage-based, subscription, and hybrid models. The optimal model depends entirely on your unique business architecture and customer needs. Usage-based pricing, for example, is challenging for businesses who require predictable revenue forecasting, yet ideal for streamlined customer onboarding with fewer upfront costs.

Several misconceptions about pricing stand in the way of businesses finding success with new strategies. One common myth is considering pricing as merely a finance concern. In reality, pricing has far-reaching influence across a business, impacting sales, customer success, business intelligence, and product. It’s a huge undertaking that requires department heads to work together to unlock growth potential.

The second misconception is the notion that usage-based pricing is a niche approach. In reality, this pricing strategy is often working alongside a second strategy as part of a hybrid model. Hybrid pricing is a popular tool amongst fintech businesses because it leaves room to experiment with multiple levers and determine what works best and to capture more revenue from heavy existing users who see strong value.

If a company anticipates that a customer will want to cut back spending in the coming months, introducing a hybrid model is an increasingly common tactic to keep them on board through a bespoke pricing option. In the past, it was considered too complex an option, but solutions today make it possible to test and implement a new strategy in a gradual and controlled way.

The secret to a solid strategy and lasting success

Implementing a successful pricing strategy necessitates a well-defined plan that is built on accurate and clean data. Luckily, many of today’s fintech products are highly data driven, making it a clearer path to approach pricing in a similar manner. Usage-based pricing in particular will not be successful unless the product feature being monetised clearly aligns with where the customer finds value. On top of this, usage and billing information must be transparent, requiring clear data streams and costing calculations for well informed customer conversations.

Every pricing transformation project requires consensus across a company. Firstly, the strategy and go-to-market plan must be clear and fine-tuned. If it’s not, there’ll be disconnect across teams with disastrous consequences, breaking the customer pipeline for marketing and sales, or breaking customer promises set by sales teams at the product onboarding stage. The second element is operationalisation, because pricing touches finance, product and GTM teams, and will impact all departments if poorly implemented, including customer billing and the customer experience.

Transformation also requires strategic timing. In a period where many customers are dreading price increases, a proposal for a new pricing strategy should be designed to put the customer at ease and not scare them away. In this sense, the value proposition must also be clear, and explain the benefit of a new model from the customer viewpoint.

To stay relevant in an increasingly crowded industry, fintechs should be using every leaver at their disposal to deliver value to the customer and drive growth. A pricing transformation is a surefire way of demonstrating customer understanding and reducing churn, whichever model you chose.


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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