Software companies are always on the lookout for new ways to build a better product offering for their customers. This is especially true now more than ever before as Software-as-a-Service (SaaS) solutions continue to be amongst the fastest-growing segment within the tech world.
In an increasingly competitive B2B market, flexibility, agility, and adaptability are now necessities for modern-day businesses. This also means an increasing demand for easier to manage, more unified one-stop-shop experiences for business owners—and a growing opportunity for SaaS companies to further diversify their offerings.
Consumer adoption of digital solutions is accelerating at a rapid pace, with the SaaS market growing by as much as 18% year over year. As a result, SaaS businesses need to become more innovative in how their platform features and product offerings address their user’s unique operations and set of business needs.
Enter payment monetization.
Having a strategy to monetize payments gives SaaS companies an additional revenue stream while enhancing the customer experience and reducing customer churn.
While the embedding of SaaS payments may not be at the top of the list when initially building out software solutions, more businesses are looking into embedded commerce as yet another value-added offering that differentiates their preferred software solution from other competitors.
But how exactly should a SaaS company monetize payments? Here’s a look at what organizations need to know about CRM integration and monetizing SaaS payment software features.
What is Payment Monetization?
Payment monetization is the action of adding payment processing as a software feature within your platform and then charging customers when they utilize your offerings.
SaaS companies take direct control of the experience by owning the payments process. Companies that implement local payment methods of monetization create a more complete, branded payments experience tailored to the needs of their software users. This includes underwriting, risk management, and settlement experiences, which have been traditionally managed by third parties.
The Benefits of Payment Monetization for SaaS Business
There are several reasons to consider payment monetization for your SaaS platform. Consider the following advantages for your SaaS product.
Have additional revenue streams
For starters, payment monetization enables you to… well, monetize SaaS payment processing on your platform. This provides an additional revenue source for your SaaS business, which boosts your bottom line.
Processing payments helps diversify your revenue streams, thus putting your business in a better financial position.
Provide more value to software users
Incorporating payment processing into your product or service suite allows you to serve your customers better. You’re able to offer additional features and capabilities, so users can do more with your software. As a result, users get more value from your platform, which improves customer satisfaction. With SaaS billing systems, you can offer your merchants multiple tools for their own subscription services, including standard subscription models with recurring subscriptions and subscription management, they can also automate payments, or even feature more complex billing plans.
Improve the user experience
Handling the payment processing side of things enables you to offer a more seamless and consistent experience to your users.
This also means that your customers won’t have to deal with too many third-party vendors, because any concerns they have regarding software, features, and payment processing can be handled under your roof.
All the benefits mentioned above lead to lower rates of involuntary churn. Since people get better value, experiences, and capabilities from your software, they’re less likely to jump ship. Weaving in payment processing into your offerings can make you a more valuable vendor. This, in turn, reduces involuntary churn.
The Top Monetization Methods to Consider
How exactly can you monetize payment processing? We discuss some of the most common methods below.
Bundle payments into existing plans
One of the most straightforward payment monetization methods is to add payments as a feature on your subscription plans. This involves bundling recurring billing into your pricing tiers then charging accordingly.
The website provider Wix implements this by having specialized pricing tiers for merchants that need to collect payments online. While users can still use Wix’s regular Website Plans (starting at $39 a month), those that want to accept different payment methods online can sign up for the company’s “Business and eCommerce Plans” which start at $49 per month.
Offer payment capabilities as an add-on
If you’re not keen on baking payment options into your pricing plans, you can choose to offer it as an add-on service instead. This means you still provide your current pricing tiers but offer additional cost features merchants who want to access payment capabilities.
That extra fee can come in the form of a monthly cost subscription payments that’s added to whatever subscription they have with your business.
Monetize transactions made through your platform
You could also monetize the transactions made through your platform. Whenever merchants process transactions using your payment processor services, you can generate revenue by marking up those processing costs. This can be done for one-time payments or for recurring payments.
Let’s go back to Wix as an example. While merchants can choose to process credit cards through one of Wix’s many payment partners, the company also has its own payment solution—Wix Payments.
Wix Payments has its own sets of processing fees, and merchants who want their website, eCommerce, payments under one platform can choose to go this route. Wix then charges those merchants a markup when they process transactions using Wix Payments.
Charge for advanced payment processor features
You can further monetize payments by giving your merchants an enhanced payments experience. Aside from just facilitating transactions, consider offering features like recurring billing, recurring payments, pre-authorization, advanced reporting, etc.
Hindsite, a field services software provider, did just that when it offered a new feature called ProntoPay (powered by Stax). ProntoPay enabled Hindsite’s users to pre-authorize payments and store payment information to make it easy to stay on top of accounts receivables. Doing so allowed Hindsite to monetize their billing model more effectively while adding tremendous value to its users.
“The ability to accept payments through my Hindsite platform has been an absolute game-changer,” says Hindsite user Michael Rose, owner at Suburban Lawn Sprinkler.
“As a business in the service industry, we struggle with having a high accounts receivable balance, and thanks to Hindsite’s new feature ProntoPay – that’s no longer something I have to be worried about. For all those, struggling with high accounts receivable balances, I cannot recommend ProntoPay enough!”
What are the Responsibilities of Saas Companies Looking to Embed Payment Capabilities?
When you decide to monetize payments, there are a number of responsibilities you’ll need to take on. These include:
Companies that offer payment processor services must be backed by a sponsor bank. These institutions are members of an approved bank card system and they can serve as sponsors of financial services providers—e.g., credit card processing, lending, etc.
As such, when you offer payment processor capabilities, you need to build a relationship with a good sponsor bank—something that can take time and resources. At Stax Connect, we save you all the trouble by eliminating the financial burden of building a bank partnership.
When you partner with Stax Connect, you gain access to one of the best sponsor banks in the global financial industry.
Getting users onboarded to a payments platform requires a number of steps. There’s the underwriting process, which vets merchants and ensures that they’re qualified to take payments. You also need to onboard them onto your platform and ensure they have the knowledge and tools to start accepting payments.
Stax Connect streamlines the enrollment process for SaaS companies. Our team can validate each merchant using AML, KYC, Credit Check, and OFAC to ensure that they’re fully vetted.
As for merchant account onboarding, we offer flexible options to get users onto your system in the best way possible. Stax Connect can deliver a branded enrollment system within your software so you can fully own the process. Another option is to enable your users to sign up for payment processing through a white-glove service.
Whatever your enrollment needs, Stax Connect has got your merchant account covered.
As a SaaS business payments provider, you must stay on top of security. This includes monitoring for fraud and preventing data breaches. At Stax Connect, we make this easier for SaaS companies thanks to our in-house risk team who constantly monitors and validates transactions and stays abreast of regulatory requirements. Plus, Stax Connect is PCI DSS security compliant with ROC and SOC 2 certifications so our system can mitigate risk for you and your merchants, which assists with .
The settlement process is all about ensuring that funds are distributed to merchants and are deposited into their bank account. Since your users expect funds to hit their accounts in a timely manner, it’s incredibly important to have a tight and efficient settlement process.
Fortunately, this is 100% doable with Stax Connect. We take ownership of the distribution process so your merchants get paid. As one of our SaaS partners, we let you choose when to close batches and initiate user deposits—no manual settlements or payouts required.
Payment methods and hardware support
Accepting payments requires the right tools, particularly as customers start using various payment methods (e.g., mobile payments, SMS payments, ACH, eChecks, etc.). To be a competitive payments provider, you must be able to support the modern payment options of today.
Stax Connect supports various SaaS payment processing types, including:
- Credit card and debit card payments
- Online payments / eCommerce
- In-person payment methods
- Keyed In transactions
- Automated billing / subscriptions
- …and more
What’s more, our platform works with leading POS systems, payment terminals, and equipment. As a Stax Connect partner, you can leverage these capabilities to provide comprehensive payment solutions to your users.
Last but not least is customer support. When offering payment gateway and processing services, concerns around funding, security, and chargebacks will inevitably arise. During these situations, it’s essential that you be there for your merchants and ensure that they are supported.
You can accomplish this by fielding payment-related issues in-house or by teaming up with a provider that offers superb customer service—like Stax Connect!
Enabling users to make or accept payments through your platform requires a process called payment enrollment. When implemented correctly, SaaS payment enrollment paves the way for smooth transactions and ensures that you and your customers are able to pay—or get paid—efficiently.
In this post, we’ll explore payment enrollment in more detail and discuss how it relates specifically to SaaS companies.Learn More
What is Payment Enrollment and How Does it Works for SaaS Platforms?
What is Payment Enrollment?
Payment enrollment refers to the process of onboarding users onto a platform that facilitates payments.
The process itself varies depending on the business. For example, a company that needs to pay its vendors may ask its suppliers to fill out a payment enrollment form so they can be entered into the company’s system and get paid. Or, a service provider that offers payment plans may ask their clients to enroll into their payment system subscription plan so the provider can charge their cards automatically via a secure payment gateway.
A payment gateway is what connects a customer to a merchant. When you sell items in person this payment gateway is built into your point-of-sale (POS) system for processing payments, but in the realm of SaaS businesses, payment enrollment takes place when the software company wants to enable its users to accept or facilitate payments using its solution.
For instance, if you’re a project management software company and want to give your users the ability to offer payment solutions through your platform, you would need an enrollment process to properly onboard them to your payments solution.
How SaaS Companies Can Implement Payment Enrollment
The specific steps involved in your SaaS payment enrollment process will depend on several factors, including your technology capabilities, the type of software you’re offering, and the user experience you want to create.
When it comes to SaaS payment enrollment, the first thing that almost all SaaS companies must do is to find the right payments partner.
While there are numerous companies that can facilitate payments through your software, not all of them can serve as a reliable partner that can help you establish and run smooth payment processes (including enrollment).
As such, it’s critical that you do research and select the right payments provider.
At Stax Connect, for example, we ensure that our SaaS clients are set up for success by providing different enrollment options and guiding them through the process.
3 Payment Enrollment Methods for SaaS Platforms
There are three common ways to enroll users into a SaaS payments platform. Below, we’ll discuss the ones provided by Stax Connect. (Note: Not all payment providers can offer or support these methods, so be sure to have thorough conversations with vendors before selecting a payments partner.)
1. Full API enrollment
With this method, your payment enrollment process happens right inside your app, so users won’t have to leave your software. They’ll fill out a form within your app and go through the approval process on your platform.
The main benefit of a full API enrollment is it enables you to create a payment process that’s 100% on brand. Since everything happens within the four walls of your software (so to speak), the user has a consistent branding experience every step of the way.
However, the full API enrollment method requires substantial developer resources and API knowledge. You’ll need a developer team who can build that process into your app using the Stax API.
While large companies have the resources to accomplish this, small to medium SaaS businesses may not have the developer resources to do so. In this case, the following two options may be a better fit.
2. Hybrid API enrollment
With the hybrid API method, you can start the payment enrollment process within your app, then redirect merchants to a co-branded landing page where they can complete their application. This method leverages the Stax Signup Application using Single Sign On (SSO) capabilities to smoothly and securely direct users from your software to the web-based application form.
The hybrid enrollment method still enables you to offer a branded experience without a massive requirement for developer resources. Since you’re not embedding the entire enrollment procedure into your software, there’s no need for a large or dedicated team.
Think of it as getting the best of both worlds: you can offer a certain level of customization without doing all of the technical heavy lifting.
3. White-glove enrollment
The white-glove enrollment process involves more hand-holding on your part. Instead of letting your users enroll through a self-service platform, you’ll be the one filling out the form for them. This is easily implemented and doesn’t require any technical or developer work. All you have to do is fill out the enrollment form within the Stax Connect platform.
While you won’t have to dedicate developer resources for white-glove enrollment, you will need a good customer-facing team who can facilitate the process for your merchants.
See Documentation: Enrollment: Stax API
How to Decide Which Payment Enrollment Method is Right for You
There’s no one-size-fits-all SaaS payment processing enrollment process, as each company is different. If you’re trying to decide which method is best for your platform, you’ll need to consider the following:
Level of customization. Questions about branding and control will naturally come up when deciding on an enrollment method. Do you want the payment enrollment process to be 100% on brand? Would you prefer to have more say over your user’s in-app journey?
Developer resources. Some methods require more coding than others, so take an honest look at your technical resources and factor that into your decision.
The preferences of your users. At the end of the day, it’s all about providing a great user experience, so figure out the preferences of your merchants. Are they ok with a self-service enrollment method or would it be better to do it for them?
Weighing in these factors will help you decide on the best route forward. For instance, if you want to provide a branded experience but don’t have a lot of dev resources, you may want to consider using a hybrid approach. Do your customers need more hand-holding when it comes to payments? Then a white-glove method may be a good option.
It All Starts with Your Payments Partner
Once again, the “right” payment enrollment process will depend on your needs, capabilities, and users. The good news is with the right payments partner, you’ll be able to figure out the best method and launch it with ease.
If you’re a SaaS company that needs to facilitate payments for your existing or new customers, get in touch with Stax. Not only will we help you figure out the payment enrollment process that fits your requirements, but we’ll also give you the support you need to get everything up and running.
Stax Connect Empowers Software Companies to Monetize Payments
Payment monetization helps software companies take their revenue, user experience, and overall business to a whole new level. That’s why if you’re thinking about how you can improve your offerings, it’s worth exploring ways to monetize payments.
If you’re already considering SaaS payment processing monetization and need a partner to bring your strategy to life, get in touch with Stax Connect.
Our robust platform enables you to fully own and monetize the payment details experience. Stax Connect supports you and your merchants every step of the way—from onboarding all the way to hardware and customer service.