Benchmarks · Fintech (payments)
What investors check first in a fintech startup
Healthy ranges for a fintech startup at an early stage: gross margin 30%–60%, monthly merchants churn up to 2.5%, year 1 net take rate (after interchange & losses) 0.5%–2.0%, year 2 tpv growth per merchant / month 0%–2%.
How a fintech startup makes money
Merchants x payment volume x take rate.
That one line is the revenue engine. Every number in it should be something you can measure today and defend with your own data. Investors rebuild it in their heads in the first five minutes, so your model should too.
The benchmark ranges
| Metric | Healthy (green) | Watch (amber) |
|---|---|---|
| Gross margin | 30%–60% | 20%–70% |
| Monthly merchants churn | up to 2.5% | up to 4% |
| Year 1 net take rate (after interchange & losses) | 0.5%–2.0% | 0.3%–3.0% |
| Year 2 TPV growth per merchant / month | 0%–2% | 0%–4% |
Year 1 net take rate (after interchange & losses). Net take rate is what you really earn on each dollar of volume.
Year 2 TPV growth per merchant / month. Volume growth from existing merchants must be backed by cohort data.
Ranges are rules of thumb for early-stage companies, used by the Model Health Score in the Fintech (payments) edition. They are not market data; check current sources and talk to founders who raised recently.
The drivers in the model
These are the inputs the Fintech (payments) edition asks for, with the values used for the sample company, Ledgerly Pay Ltd. (payments and invoicing for small businesses). Where a value changes over five years, the first and last are shown.
| Driver | Sample | Why it matters |
|---|---|---|
| Merchants at start (month 0) | 120 | Active merchants you already have before month 1. |
| Organic / referral new merchants in month 1 | 6 | Word of mouth, SEO, referrals, partnerships. |
| Organic new-merchant growth per month | 5% → 2% | Compounds monthly. Above 10% a month needs strong evidence. |
| Paid marketing spend | $12,000 → $90,000 | Ads, sponsorships, paid campaigns (people costs are in Headcount). |
| Paid CAC (cost to win one merchant via paid channels) | $1,100 → $1,500 | Paid new customers = paid spend / paid CAC. CAC usually rises as you scale. |
| Monthly churn | 2.5% → 1.6% | Share of merchants who stop processing each month. |
| Payment volume (TPV) per merchant per month at start | $25,000 | Total payment volume processed for one merchant. |
| TPV growth per merchant per month | 1% → 0.5% | Merchants grow and move more volume onto you. |
| Take rate (fees charged on TPV) | 2.5% → 2.4% | Gross processing fee you charge. |
| Software subscription per merchant | 49 | Invoicing, reporting, add-ons. |
| Interchange & scheme fees (pass-through cost) | 1.7% | Paid to card networks and issuers. |
| Fraud & credit losses | 0.1% | Chargebacks and losses not recovered. |
What the sample model looks like over five years
| Ledgerly Pay Ltd. | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|
| Revenue | $1.74M | $4.35M | $8.81M | $15.1M | $23.7M |
| Gross margin % | 32% | 32% | 31% | 29% | 29% |
| EBITDA | -$456k | -$942k | -$910k | -$655k | $739k |
| Cash at year end | $2.43M | $9.54M | $8.78M | $8.21M | $8.95M |
| Active merchants (year end) | 288 | 630 | 1,125 | 1,762 | 2,532 |
| Revenue run-rate (year end) | $2.51M | $6.03M | $11.4M | $18.5M | $28.2M |
| Headcount (year end) | 9 | 16 | 22 | 28 | 30 |
| LTV : CAC | 5.9x | 5.4x | 5.6x | 6.1x | 7.4x |
| CAC payback (months) | 6.8 | 8.4 | 9.0 | 9.1 | 8.5 |
Fictional sample company, Base case. Figures are illustrative and come from the SAMPLE file of the Fintech (payments) edition.
Fintech (payments) terms to know
- TPV
- Total payment volume processed.
- Take rate
- Fees charged as a % of TPV.
- Interchange
- Fees paid to card issuers on each transaction.
- Net revenue (payments)
- Gross revenue minus interchange, scheme fees and losses.