Mercoa’s B2B Payments API Is Squeezing Bill.com’s SMB Base

The API-First Challenger Taking On a $2 Billion Incumbent

Bill.com built its business by making accounts payable bearable for small and midsize companies – a SaaS layer over messy invoice workflows that became a go-to for accountants and bookkeepers. It worked well enough to take the company public and push its market cap past $2 billion at its peak. But the product was designed for an era when the biggest ask was “can you stop sending paper checks?” The ask has changed.

Mercoa is betting that what modern finance teams actually need is not a dashboard to log into but an infrastructure layer to build on. Its B2B payments API lets companies embed invoice management, vendor onboarding, and payment rails directly into their own platforms – without routing users through a third-party interface. That distinction sounds technical. The business consequences are anything but.

Why the Embedded Model Threatens Bill.com’s Core

Bill.com’s model works on a relatively simple premise: pull SMBs and their accountants into a centralized platform, charge per user, per transaction, and per feature tier. The friction of switching keeps customers in place. But the companies building SaaS products for those same SMBs – vertical software for restaurants, contractors, medical practices, law firms – increasingly want to own the payments experience themselves. They do not want their customers leaving the platform to pay a vendor somewhere else.

Mercoa hands that capability to the builders. A vertical SaaS company can use Mercoa’s API to wire bill payment, approval workflows, and vendor ACH or check rails directly into its own product. The end user never sees Mercoa. That invisible infrastructure model is precisely how Stripe took card processing away from first-generation gateways, and it is the same logic playing out now in B2B payables.

The SMB Market Is More Fragmented Than It Looks

Bill.com’s pitch has always leaned on its network – a large database of vendor payment information that theoretically speeds up supplier onboarding. That network effect is real, but it matters most when both payer and payee are already Bill.com users. For the long tail of small businesses operating through niche vertical software, that overlap is thin.

The SMB segment is not a monolith. A small landscaping company using field service software has radically different payables needs than a boutique architecture firm or a regional food distributor. The horizontal platform model that Bill.com runs struggles to serve all of them with the same depth. Vertical SaaS builders, on the other hand, can tune the payment experience to match the exact workflow of their specific industry – and they are increasingly choosing infrastructure partners that let them do exactly that.

Mercoa’s approach also carries a structural pricing advantage. When payments are embedded at the platform level, the SaaS company captures the transaction economics and Mercoa takes a piece as the infrastructure provider. Bill.com, by contrast, sits between the SMB and its vendors as a visible intermediary, which makes its pricing a visible line item that customers can question and cut. Embedded infrastructure does not show up on anyone’s cancellation checklist.

The vendor onboarding problem is also worth examining. Getting suppliers to accept electronic payments – especially ACH – has historically been a manual, high-touch process. Mercoa has built automated vendor onboarding into its API stack, reducing the lift for any platform that embeds it. That matters because the onboarding bottleneck is often what delays SMBs from switching away from check-based payments altogether. Removing it programmatically, rather than through a customer service team, is a meaningful operational difference.

Bill.com Is Not Standing Still

To its credit, Bill.com has not ignored the competitive pressure building beneath it. The company acquired Divvy for expense management and Invoice2go for invoicing, extending its footprint beyond pure accounts payable. It has also pushed into mid-market accounts where deal sizes are larger and switching costs are higher. But those moves largely reinforce the existing platform model rather than address the embedded infrastructure gap.

The acquisitions also introduced integration complexity. Running multiple products under one umbrella is a different engineering and go-to-market challenge than offering a clean API to developers who want to build their own experience. Bill.com is essentially competing on two tracks at once – which is manageable but rarely tidy.

What the Competitive Pressure Actually Means

Mercoa is not trying to win the accountant’s desktop. It is going after the platform builders who serve the accountant’s clients. That is a different customer acquisition motion – longer sales cycles, developer-centric pitches, and revenue that accrues gradually as embedded platforms grow their own user bases. It does not show up in Mercoa’s headline metrics the same way SaaS subscription counts do, which is part of why the threat can look smaller than it is from the outside.

The SMB payables market is large enough that multiple players can generate real revenue without directly cannibalizing each other – at least for now. But as more vertical SaaS companies embed their own financial workflows, the pool of businesses that would choose to sign up for a standalone Bill.com account gets smaller by default. You do not switch away from Bill.com if you never needed to sign up in the first place.

The more interesting question is whether Bill.com attempts to build or acquire an API-first offering of its own. A platform that tried to compete with Stripe by also offering a developer product would not be a new story in fintech. What would be unusual is executing that transition without undermining the dashboard product that existing customers – and the accounting partners who recommend it – actually use. That tension does not resolve neatly, and Mercoa has no reason to wait around while Bill.com figures it out.