So, you’re a SaaS company that’s starting to implement payment monetization—great! Having payments as a service or feature within your software opens up several potential benefits, including higher annual revenue per user (ARPU), increased customer satisfaction, and faster business growth.
That being said, in order to fully unlock these advantages, you need to ensure that your payment initiatives are successful.
Part of doing that lies in measuring certain KPIs. If you’re offering payments, there are a number of SaaS metrics that can shed light on the performance of your initiatives. They can tell you if your efforts are successful or if you need to correct the course.
Let’s take a look at some of the key SaaS metrics that ISVs and SaaS companies should track when providing payment services to software users. Monitoring these key metrics is key for the SaaS model of business, whether you run successful SaaS businesses or for brand new SaaS startups.
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1. Payment attachment rate
One of the fundamental SaaS metrics you should monitor is your attachment rate. This is the percentage of users that signed up for your payment offerings. A high attachment rate means that a good amount of your customer base has payments as part of their contract, while a low figure could mean that not enough people are signing up.
Tracking this metric can give you an indication of how successful your sales and marketing efforts are when it comes to payments.
If you’re dealing a low attachment rate, you could consider:
- Increasing the visibility of your payment offerings on your marketing channels
- Incentivizing your sales team to include payments when selling your software
- Encouraging your customer success team to convert existing software users onto your payment offerings
Whatever the case, the first step to improving your attachment rate is to track it, so keep this KPI top of mind at all times.
2. Number of users who are actually processing
Already have a good payment attachment rate? If so, the next question to ask is: Are the users who CAN process payments actually doing it?
After all, it’s one thing to get your acquired customers to sign up for payments, but the effort will have little impact on the business if people aren’t processing transactions. If you see that you have users who aren’t taking advantage of payments, it’s worth prodding them to do so.
Typically, if you can get the customer (i.e., the submerchant) to process somewhere between five to seven times, you’re going to get the most value you could ever get out of them.
Simply put, you will get more value per user faster by encouraging them to use your payment services. That’s why it’s important to encourage your paying customers to keep processing through your platform.
3. Payment user penetration
Looking at your user penetration rates when it comes to payments will help you forecast the payment revenue you can get from each customer—and determine the customer lifetime value.
For example, if a merchant does a million dollars a month in volume, and your average penetration rate is 50%, then you know you’re going to get 500K from that merchant in volume.
It’s a good way to set benchmarks and goals for your payment initiatives and estimate monthly recurring revenue. For instance, if your goal is to hit $50,000 in monthly recurring revenue through payments, you can work backward to determine your ideal user penetration and use that figure as your goal.
Just bear in mind that payment penetration needs to be separated into two groups:
- Net new penetration
- Existing user penetration
These segments will have distinctly different payment journeys, and your efforts will vary depending on who you’re trying to convert.
Existing customers may have trouble letting go of their current ways of payment processing—new can be scary, and this will affect the effort needed for existing customer acquisition. Your new SaaS customers have a variety of barriers to get over before they can begin acquiring customers through your SaaS or ISV platform, but it may be an easier sale since they are already in a growth and change mindset.
4. Initial payment volume
Depending on your SaaS payment processor and application process, your users may be approved for a certain payment volume amount for individual tickets or invoices. For example, a retailer selling T-shirts may have a typical ticket amount of $40 per order, while a manufacturer of medical equipment could have ticket values north of $10,000.
It’s worth paying attention to the approved payment volume amount versus how much they’re actually processing. If there’s a large discrepancy between the two figures, then there might be issues with the account, and you need to look into it.
Monitoring SaaS metrics for how much revenue your users bring in, their average revenue, and any discrepancies can alert you to potential stumbling blocks that your customers are experiencing, and it can help reduce your customer churn rate. Your customer retention and customer churn rate (and the coordinated revenue churn) have a big impact on your bottom line and your average customer lifetime value.
5. Payment processing velocity
It’s also worth looking at the velocity at which your users process payments, as this can open up conversations about the growth of their business.
For example, if a customer is processing 10 invoices a month, and then they begin doing 15, then 20—you may want to reach out to that customer to have a health check. See if there’s anything you can offer to add value to their scaling business.
Starting those conversations can lead to opportunities to talk about other software offerings. If a user’s business is scaling rapidly, for example, you could potentially upsell them on a larger plan, which increases your customer lifetime value, and this can also help decrease your customer churn.
6. Percentage of invoices that include a payments link
By now, you know the importance of monitoring payment processing adoption and volume to see if customers are actively using your services.
Aside from the above-mentioned tactics, you can get a further glimpse of your customers’ payment-related activities by checking if they’re adding payment links or embedding payments into their invoices. If you find that your existing customers aren’t doing it yet, remind them about the importance of enabling payments in their invoices.
Educate them on the fact that adding a payment link improves the experience of their customers and allows them to get paid faster—a win-win situation.
RELATED: What is an ISV partner, and what are the benefits?
Final words about important SaaS metrics
Successfully offering payments isn’t just about putting your programs out there and hoping users will sign up. You need to actively market your payment offerings and find ways to improve your attachment rate.
On top of that, it’s also essential to ensure that users who signed up are taking full advantage of your payment services.
Taking the steps above will allow you to maximize your payment revenues and ultimately boost your bottom line.
Here at Stax Connect, we collaborate closely with SaaS companies to ensure their payments initiatives are thriving. When you team up with us, you’re not just getting a service provider; you’re gaining a partner who’s committed to your success. We’ll provide you with the guidance, resources, and support you need to market your payment programs, onboard users, and ensure you and your customers are well taken care of.
Quick FAQs about SaaS Metrics
Q: Why should SaaS companies track payment-specific metrics separately from standard SaaS metrics?
Payment services create a revenue stream with different adoption, usage, and volume patterns than software subscriptions. Tracking payment-specific metrics helps SaaS companies and ISVs understand whether customers are signing up, actively processing payments, and generating enough payment volume to support revenue growth.
Q: What is a good payment attachment rate for a SaaS company?
A good payment attachment rate depends on your market, customer base, pricing model, and how central payments are to your software. Instead of relying on a universal benchmark, SaaS companies should track attachment rate over time, compare performance across customer segments, and look for steady improvement through sales, marketing, and customer success efforts.
Q: What is the difference between payment attachment rate and payment user penetration?
Payment attachment rate measures the percentage of customers who have signed up for your payment offering. Payment user penetration measures how much of a customer’s actual payment volume is being processed through your platform. A customer can be attached to payments but still have low penetration if they process only part of their transactions through your system.
Q: Why is it important to track customers who sign up for payments but do not process transactions?
Customers who sign up for payments but do not process transactions are not generating meaningful payment revenue. Tracking this gap helps identify onboarding issues, product friction, training needs, or customers who need follow-up from customer success to begin using the payment feature.
Q: How can SaaS companies improve payment adoption among existing customers?
SaaS companies can improve payment adoption by making payment features more visible, educating customers on the benefits, adding payment prompts in the product, training customer success teams to promote payments, and showing how embedded payments can help users get paid faster and improve their customer experience.
Q: Why should net new payment penetration and existing user penetration be tracked separately?
Net new customers and existing customers often have different adoption barriers. New customers may be more open to using embedded payments as part of their setup process, while existing customers may already have a payment processor and established workflows. Tracking them separately helps SaaS companies tailor their conversion strategies.
Q: What does payment processing velocity tell a SaaS or ISV business?
Payment processing velocity shows how quickly a customer’s payment activity is increasing or decreasing over time. Rising velocity can signal that a customer’s business is growing, creating opportunities for account reviews, upsells, or additional software features. Declining velocity may indicate potential churn risk or customer friction.
Q: How can initial payment volume help identify customer issues?
Comparing a customer’s approved payment volume with their actual processing activity can reveal potential problems. If a customer is approved for a certain volume but processes much less, they may need onboarding support, product education, or help resolving issues that prevent them from using payments fully.
Q: Why should SaaS companies track invoices that include payment links?
Tracking the percentage of invoices with payment links helps determine whether customers are using payment features in practical workflows. If few invoices include payment links, customers may not understand the feature’s value or may need reminders, training, or product prompts to embed payments more consistently.
Q: How do payment metrics affect customer lifetime value?
Payment metrics can influence customer lifetime value by showing how deeply customers use your payment services. Higher adoption, stronger payment penetration, and increasing processing volume can increase revenue per customer, create more product stickiness, and support better retention over time.
Q: Which teams should be involved in improving SaaS payment metrics?
Sales, marketing, customer success, product, and payments operations should all be involved. Marketing can increase awareness, sales can position payments during the buying process, customer success can drive adoption, product can reduce friction, and operations can monitor processing issues or volume discrepancies.
Q: How often should SaaS companies review payment monetization metrics?
SaaS companies should review payment monetization metrics regularly, often monthly or quarterly, depending on transaction volume and growth stage. High-growth companies or businesses actively scaling embedded payments may benefit from more frequent reviews to identify adoption gaps and revenue opportunities quickly.
