What Pay Theory does

Pay Theory is a Cincinnati-based private fintech founded in 2019 that operates an embedded payments platform targeted primarily at K-12 education and small-to-mid merchants. The platform accepts credit cards, debit cards, ACH bank transfers, and — distinctively — cash via a barcode-based cash-to-digital network redeemable at 88,000+ US retail locations (CVS, Walgreens, 7-Eleven, Family Dollar), explicitly addressing the one-in-six US households that are unbanked or underbanked and the one-in-three K-12 families that rely primarily on cash.

The technology stack centers on a GraphQL API plus native SDKs for JavaScript, Apple iOS, and Android, supporting tokenization, recurring billing, virtual terminal, payment links, invoicing, dispute management, and a self-serve merchant portal. Distribution is multi-modal: developers integrate via SDK/API for full embedded experiences, non-technical merchants self-onboard through the portal and no-code payment links, and OEM/embedded partnerships place the technology inside host platforms. The most material embedded partnership is ClassDojo Payments, which will make Pay Theory the payment rail inside ClassDojo's communication platform used in 95% of US schools and reaching 45M+ families globally, with launch scheduled for late 2026.

Pay Theory's revenue model is purely transactional, charging percentage-plus-fixed fees per transaction (e.g., 2.9% + $0.30 on card payments via Merchant Fee mode, 0.4% + $0.40 on cash, 3.95% + $0.30 with a $1.95 minimum under Service Fee mode where the payor absorbs the cost). The company has raised approximately $6.35M cumulatively across a $0.35M pre-seed (2019, Loud Capital), a $2M seed (February 2022, led by Zeal Capital Partners with Ohio Impact Fund and Loud Capital), and a $4M round (October 2023, led by Naples Technology Ventures with Gaingels, Ironwood Ventures, and Zeal Capital Partners). Headcount sits in the 11-50 range, with co-founders Brad Hoeweler (CEO), Eric Fulkert (CTO), Joe Miramonti, and Aron Price, plus a CMO.

Name

Pay Theory

Legal name

Pay Theory

Website

https://paytheory.com

Company type

Private

Founded year

2019

Operating status

Operating

Headcount range

11–50 employees

Short description

Pay Theory is a Cincinnati-based embedded payments platform that processes card, ACH, and cash-to-digital transactions for SaaS platforms and SMB merchants, primarily in K-12 education, via SDKs, a GraphQL API, and a self-serve merchant portal.

Ownership category

akta.pro rank

Product category

Embedded Payments Platform

NAICS

Financial Transactions Processing, Reserve, and Clearinghouse Activities (52232), Financial Transactions Processing, Reserve, and Clearinghouse Activities (522320), Activities Related to Credit Intermediation (5223)

SIC

Services-Prepackaged Software (7372), Finance Services (6199)

akta.pro primary industry

Embedded Payments (Pay-ins, Pay-outs, Wallets) (FSAGALAB)

akta.pro secondary industries

Merchant Payment Gateways (API/Hosted Checkout) (FSAMACAA), Recurring Billing, Subscriptions & Tokenized Payments (CRAFALAH), Bill Pay, Invoicing & Payables Platforms (BPAMAFAF)

Keywords

• Embedded payments platform
• Cash-to-digital payments
• Payment processing API
• SDK payment integration
• Education payments

Headquarters

HQ city

Cincinnati

HQ country

United States

HQ region

North America

Offices1 record

Markets served

GTM type

B2B

Offering type

Software

Cost components

Technology or R&D, Personnel, Operations, Infrastructure, Marketing or Sales

Revenue model

1. Transaction Fees: Pay Theory charges transaction fees on each payment processed. The fee structure varies by payment method (card vs cash) and who bears the cost (merchant fee vs service/payor fee). These are percentage-based fees plus flat per-transaction amounts, representing the primary revenue stream.

Pricing tiers

Go-to-market motion2 records

Distribution channels5 records

Marketing channels3 records

Core offering

Pay Theory operates an API-first embedded payments platform that enables SaaS platforms, merchants, and educational institutions to accept credit card, debit card, ACH, and cash payments through SDKs (JavaScript, iOS, Android), a GraphQL API, and a self-serve merchant portal. Its distinctive capability is a cash-to-digital barcode payment network redeemable at 88,000+ U.S. retail locations, which extends payment acceptance to unbanked and underbanked households. The platform is offered to merchants directly via self-serve onboarding and embedded into partner platforms such as ClassDojo for the K-12 education market.

Product overview

Pay Theory is an embedded payments platform that offers a unified merchant portal with multiple integrated modules including a virtual terminal, payment links, invoicing, recurring payments, and cash-to-digital payment capabilities. The platform includes developer tools (JavaScript, Android, and Apple SDKs) and GraphQL API for custom integrations. A notable partnership enables ClassDojo Payments, where Pay Theory's payment infrastructure is embedded in the ClassDojo education platform used across U.S. schools.

Differentiator

Problem solved

Functional benefit

Products and services

• Merchant Portal Self-serve web dashboard at start.merchant.dashboard.paytheory.com where merchants create accounts, generate payment links, send invoices, use the virtual terminal, view transactions, process refunds and voids, manage disputes, and export payments and settlements data as CSV. Available globally to merchants of all sizes as a no-code onboarding path to the Pay Theory platform.
• ClassDojo Payments Embedded white-label payment solution powered by Pay Theory's infrastructure and integrated natively inside the ClassDojo education platform. Enables K-12 schools and districts to collect fees, manage fundraisers, and accept digital payments (cards, ACH, and cash-to-digital at 60,000+ retail locations) directly within ClassDojo, reaching unbanked and underbanked families. Targeted at U.S. school districts with launch scheduled for late 2026.

Quantifiable outcome

• 1 in 6 U.S. households are unbanked or underbanked and can be served through cash-to-digital payments
• +1 more outcomes

Named customers1 record

Segments3 records

Ideal customer profiles3 records

Technology focussed Yes

API detail

Has API

Yes

API docs

API detail

Core technology

AI maturity

App detail

Feature4 records

Partnerships

Two partnerships are on record, tiered core and supporting.

• ClassDojocoreStrategic or Co-development Partner · 1 February 2026ClassDojo powers its 'ClassDojo Payments' embedded payment solution using Pay Theory's technology. This enables 95% of US schools (45M+ families globally) to collect fees, manage fundraisers, and accept digital payments including cash-to-digital at 60,000+ retail locations. Launch scheduled for late 2026.
• CVS, Walgreens, 7-Eleven, Family DollarsupportingTechnology or Integration · 1 February 2026Cash-to-digital payment network partners enabling customers to pay with cash at retail locations. Barcodes generated through Pay Theory can be redeemed at these 60,000+ locations across the United States.

Scale indicators4 records

Recent moves6 records

Expansion highlights5 records

Broad incumbents

• Stripe: Stripe Connect and Stripe Terminal offer embedded payment infrastructure for platforms and SaaS companies, directly competing with Pay Theory's API-first embed model for developer-led integrations at scale.
• Adyen: Adyen offers unified commerce payments for platforms and large merchants, including embedded/integrated processing; while not focused on SMB/SaaS, it competes for platform partnerships at the higher end of the market.
• Square (Block): Square offers developer APIs, payment processing, virtual terminal, invoicing, and SDKs that overlap directly with Pay Theory's product suite, especially for SMB merchants and platform integrations.
• PayPal Braintree: Braintree (a PayPal service) provides embedded payment processing for marketplaces and SaaS platforms with vault, recurring billing, and multi-method acceptance, overlapping Pay Theory's core embed offering.

Direct peers

• Finix: Finix provides embedded payment infrastructure for SaaS platforms with onboarding, underwriting, and full-stack processing APIs, making it a direct competitor to Pay Theory's platform-embed GTM motion.
• FluidPay: FluidPay offers embedded payment processing and developer-friendly APIs for software platforms, with comparable merchant services features (virtual terminal, recurring billing, tokenization).
• Tilled: Tilled is a PayFac-as-a-Service platform that enables SaaS companies to monetize payments through embedded APIs with sub-merchant management, directly comparable to Pay Theory's platform-embed motion.
• Stax Payments: Stax provides flat-fee payment processing with developer APIs and platform integrations, targeting SMBs and software platforms similarly to Pay Theory's SMB/PLG motion.

Emerging players

• PayNearMe: PayNearMe enables cash payments at retail locations (including 7-Eleven, CVS, Walgreens) via barcode, directly overlapping Pay Theory's cash-to-digital retail network feature for bill-pay use cases.
• PayIt: PayIt provides government and education payment platforms with embedded bill-pay and inclusive payment options, comparable to Pay Theory's K-12/government inclusive payments positioning.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat4 records

Key risks5 records

Key highlights6 records

Customer concentration

Revenue estimate

Valuation estimate

Number of profiles

Profiles5 records

Funding overview

Funding rounds4 records

Investors10 records

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Pay Theory