Futureproofing B2B SAAS companies through embedded payments
Since Elon Musk took over Twitter, there has been a flurry of announcements from the new CEO about his vision for the company. Among them are his plans to add banking and payment services to the platform, which could include high-yield money market accounts, debit cards, and peer-to-peer transactions. Musk’s Twitter isn’t the only one overseeing the banking space: Many big Tech companies are ready to enter this field.
While the current chaos on Twitter is not a template that companies want to follow, it is important to look at their own checkout processes and find ways to integrate payment features into their products. that many software companies need to consider.
SaaS companies of all sizes have the opportunity to revolutionize their software platforms with integrated payments. Investing in in-app payments allows them to generate new revenue streams, optimize user experience, and improve product engagement. As a result, the technology rapidly separates the software group, with those that have adopted in-app billing leading the pack and those that don’t lag behind. In a difficult macroeconomic environment, no one wants to be last.
Switch to in-app payments to drive growth
There are several strategies that businesses can adopt to increase revenue. For example, it may expand its service offering or seek to expand into new markets. Both represent important strategic shifts. They require significant investment, expertise and management time.
That’s not to say they’re bad ideas, but there could be potential revenue under the noses of software companies – in the form of in-app payments. To visualize the size of the opportunity, consider Shopify. The e-commerce software giant has around two million sellers worldwide, each paying a monthly subscription fee of between $29 and $299. However, Shopify’s market capitalization stands at $33 billion. You don’t have to be Warren Buffet to see that something isn’t right here.
As it turns out, the secret to Shopify’s success is in-app billing. That is to say, it is one of the largest SaaS companies to go from asking its customers to engage with third-party payment providers to arming them with the technology to become an official payment processor. With its software, Shopify makes it easier for merchants — helping them increase average cart size and retain customers — by processing their own payments. It also provides a smooth customer experience and generates significant additional revenue for Shopify, earning a percentage of each transaction.
In-app billing is an easy win
People spend about $22 billion a year on Shopify. Now, not every B2B SaaS platform is seeing this volume – but even a platform that handles a tenth of that amount generates revenue for payment gateways and processors, instead. that can go straight to the title itself.
This is a classic example of the fruit at hand. Investment and income will come. As a software platform, you generate revenue on every transaction. Your client may not be a fintech company, so going out and hiring a payment processor is outside of their core competence (and probably one they’ll be grateful for). when outsourcing). The end customer also benefits from a simplified checkout process that takes place entirely within the merchant’s distribution channels (instead of being redirected to a third-party site for payment).
In short, software companies that don’t take advantage of in-app payments are leaving out revenue, with analysts estimating that the vast in-app funding opportunity could be worth more than 7,000. billion dollars by the end of the decade.
Partner with a payment coordinator
As mentioned, fintech companies tend to not stand out in the typical SaaS company’s customer portfolio. Similarly, many software companies may not accept the idea of becoming a fintech. While it is reasonable for some major SaaS vendors to invest eight-figure sums in acquiring and maintaining the necessary licenses and financial approvals, this is not a one-size-fits-all model. everyone.
But you, as a software publisher, don’t need to be a payment provider to offer in-app billing. Instead, SaaS providers can achieve similar goals by partnering with a payment coordinator. This is when a software vendor works with an established and trusted payment gateway to integrate the relevant payment processing software into their own platform.
There are several mechanisms that can be applied, including turnkey, white label and hybrid solutions. In other words, software vendors can collect data and walk or run through their integrated payments journey. It’s important to choose the right option for your business, based on the needs of your customer portfolio, how fast you want to move, and your broader business goals.
Can you catch it?
Of course, all that talk about low-hanging fruit worth a trillion dollars in sales sounds too good to be true, and it’s natural to wonder what could be. Done correctly, however, the answer is “very little”.
Every MBA graduate’s favorite tool is the value triangle – because it can be applied to almost anything. In-app payments are no exception because customers and customers want cheap, fast, and reliable payments.
The risk lies in not respecting one of these parameters. Competitive pricing is simply watching the market. These are two other indicators that often see SaaS vendors choosing to partner with established payment processors. The payment system must be reliable and secure, or your brand reputation will suffer. And to scale quickly, you need instant access to a payments infrastructure that is ready to integrate with your own systems.
Software vendors can choose to manage their payments themselves, and over time this can bring a number of benefits. But for many, this is too risky a decision, as they are now financially responsible and may not have the resources or expertise to do so. That’s why partnering with a payment organizer is a smart move. This allows SaaS companies to rapidly scale their offering and increase revenue, increase customer loyalty, and improve the checkout experience for end users –
