How Stax Connect works
Growing your SaaS platform requires a powerful combination of customer retention, acquisition, creating lifetime value, and enhancing your product features. Accelerate that growth with Stax Connect’s embedded payments.
Embedded payments with payments-led growth
Using embedded payments by partnering with Stax Connect combines the monetization power of payments with the control and security of your own infrastructure. Fuel your platform by enabling embedded payments and enhance your user experience.
As a SaaS platform, you know how important it is to offer your customers a seamless, integrated experience. That’s where embedded payments come in. By integrating payments directly into your platform, you not only improve the customer experience, but you can also boost your revenue potential and potentially reduce infrastructure costs. In this guide, we’ll explore the benefits of embedded payments for SaaS platforms, how they work, and how you can implement them on your platform using Stax Connect.
What are embedded payments and how do they benefit platform businesses?
Embedded payments are a way to integrate payment processing into your vertical SaaS or ISV platform, allowing your users to process transactions for their business without ever leaving your site or application. By offering in-platform payments, you can improve the customer experience, increase revenue potential, and reduce security risks. Embedded payments benefit platform businesses by:
- Reducing user churn by having a stickier product feature
- Improving the user experience with an all-in-one platform
- Creating a new stream of revenue and increasing valuation by monetizing transactions
Embedded payments are a stickier product feature
One benefit that is often considered with embedded payment solutions is the fact that tying your users ability to take payments for goods and services makes your platform all the more important for their day-to-day.
According to a 2023 study by Salesforce, 94% of organizations were planning to consolidate their tech stacks to increase efficiency and reduce operational expenses.
If users are already using your platform for scheduling, creating invoices, business reporting, and customer management; embedded payments are a natural addition to running their business. Staying at parity with the competition, or even providing a better embedded payment solution, increases product stickiness.
Improve user experience with an all-in-one platform
Embedded payments in a vertical SaaS platform significantly enhance the user experience by offering a seamless, integrated payment process within the software itself. This eliminates the need for users to navigate to external payment portals, providing a more intuitive and efficient payment flow.
- In the realm of healthcare software, embedded payments simplify and expedite the payment process for medical services, enabling a smoother experience for both patients and healthcare providers.
- For field service software, embedded payments streamline invoicing and billing for service professionals, reducing the administrative burden and enhancing customer satisfaction.
- In the case of legal software, integrated payments facilitate secure and convenient transactions for legal services, contributing to a more client-centered approach and improving overall workflow efficiency.
By embedding payments, these diverse software solutions can elevate the user experience, offering a more cohesive and convenient journey for respective users.
Create new revenue streams and increase valuation
By embedding payment solutions directly into your platform, you’ll enhance revenue potential and attract a wider customer base. The seamless and intuitive payment experience offered by embedded payments can drive higher customer satisfaction and retention, ultimately boosting the overall value of your business.
With embedded payments, businesses can position themselves as innovative and customer-focused, laying a strong foundation for long-term growth and increased valuation in the competitive market landscape.
Not to mention, the ways in which you can monetize payments, transactions, and more. In some cases, a SaaS platform will even eliminate their SaaS fee in exchange for payments revenue generated from client transactions using their platform. Payment processing fees are often applied per transaction at a set rate for merchants.
Searching for the best embedded payments processor for your business?
Choosing the right embedded payment provider for your SaaS platform can be a daunting task. With so many options available, how can you be sure you’re making the right choice? When searching for a payment processor, consider:
- Ease of integration with your platform
- Level of support and customer service
- Security and compliance measures
- Pricing and fees
- Partnership models available
Implement embedded payments with Stax Connect
Implementing embedded payments on your SaaS platform is easier than you might think. With a partner like Stax Connect, you can integrate payment acceptance into your platform quickly and easily, without requiring extensive development resources.
Real-life embedded payments examples
In the realm of SaaS platforms, real-life examples of embedded payments are abundant, showcasing the power of seamless integration and enhanced user experience. Today, embedded payments can be found in all types of apps, like DoorDash or Uber.
From healthcare companies to HR organizations, there’s a plethora of businesses out there using integrated payment solutions. Some examples of embedded payments include:
- Subscription-based SaaS platforms implementing seamless recurring payment processing directly within their software
- Field service management software enabling service professionals to accept payment on-site through their mobile app
- Online learning platforms incorporating integrated payments for course enrollment and tuition fees
- Event management software streamlining the ticketing and registration process by embedding payment capabilities directly into the platform
- Healthcare software platforms facilitating easy and secure payment processing for medical services and telemedicine consultations
- SaaS platforms catering to the legal industry integrating payment functionalities for invoice management and client billing
- Property management software simplifying rent collection by embedding payment processing within the platform
- Project management software allowing for seamless payment handling and invoicing within project collaboration spaces
How do embedded payments work?
Embedded payments work seamlessly within a SaaS platform to streamline the payment process for users. Here’s a step-by-step guide on how embedded payments function:
- Integration: The SaaS platform integrates a payment API or in some cases, a payment gateway, directly into its interface, allowing users to make transactions without leaving the platform.
- Initiating Payment: When a user decides to make a payment, they are presented with a payment form or window within the platform itself. Invoices can also be created with direct payment links to streamline capturing payments.
- Secure Payment Processing: The embedded payment system securely collects the user’s payment information, such as credit card details or digital wallet credentials. Some embedded payment solutions also capture card information in a process called tokenization, which securely stores the credit card details for later transactions.
- Record-Keeping: The platform stores details of the transaction for future reference, such as in user account histories or invoices.
- Pricing: Platforms with embedded payments can set up transaction fees or charge a set amount of basis points per dollar for users. It is common for small to medium sized businesses to shop for the best deal on merchant services, making it imperative for the SaaS platform to stay competitive in order to increase payment attachment rates.
In summary, embedded payments work by using a payment API or payment gateway to integrate payment processing directly into your platform. This allows users, such as business owners or operators, to take payments without ever leaving your site, creating a seamless in-platform experience. The payment API securely stores and transmits payment information, so you as the platform owner don’t have to worry about security risks.
Embedded payment technology
Navigating the intricate terrain of embedding payments within platforms requires some level of background knowledge. These versatile methods offer tailored approaches to embedding payments, each with its unique nuances and benefits, resonating with the goals and requirements of diverse businesses as they venture into the realm of seamless and integrated payment processing.
Payment APIs
Leveraging an Application Programming Interface (API) allows for deep integration of payment processing directly within a platform. This method provides a high level of customization, enabling seamless user interactions and a consistent branding experience.
Payment gateway
Integrating a payment gateway facilitates secure and efficient transaction processing by linking the platform to the payment ecosystem. This method serves as a conduit for transmitting payment data between the platform, the payer, and the payment processor, ensuring robust security and adherence to industry standards.
White-label payment portal
A white-label payment portal presents the ability to integrate a customizable and branded payment solution within the platform. This approach offers a tailored payment experience, allowing businesses to maintain a unified brand presence and user interface throughout the payment process.
Hosted payment pages
Employing a hosted payment page involves redirecting users to a secure payment page hosted by the payment processor. While slightly distinct from direct embedding, this method offers a balance between security and simplified integration, as the payment page maintains a consistent look and feel with the platform.
Payment facilitator (Payfac) model
Utilizing the payfac model streamlines payment facilitation by enabling sub-merchants to process transactions under a master merchant account. This model enhances operational efficiency, simplifies onboarding, and reduces the complexities associated with acquiring individual merchant accounts.
Embedded payment partnership models
Stax Connect offers a range of customizable partnership models, including referral, reseller, and Payfac, to help you find the best fit for your business. Additionally, Stax Connect offers a flexible and scalable technology platform that simplifies the work required on your end to embed payments. White-label the Stax Pay portal, integrate the full Stax API to embed financial services directly on your platform, or scale quickly with a hybrid solution.
Traditional payment facilitator (payfac) model of embedded payments
If you’re end-goal is total control of the user experience from processing fees, pricing, underwriting, enrollment, and risk management, the payfac model is the most lucrative. However, it also requires the most investment in resources from development, operations, and sales talent.
Payfac-as-a-service model of embedded payments
The Payfac-as-a-Service model of embedded payments involves partnering with a payment facilitator (Payfac) to handle payment processing on your behalf. The Payfac handles all aspects of payment processing, including onboarding, underwriting, and risk management, while you focus on your core business activities.
The revenue share is split based on contract terms arranged with the Payfac, but still gives the platform some level of control of the user experience without as much investment.
Referral model
The referral model of embedded payments involves partnering with a payment provider who handles all aspects of payment processing, while you focus on your core business activities. A referral partner will work to penetrate your merchant back-book, convert existing software users to your embedded payment solution, handle the merchant application, onboarding, and more.
For platforms that are looking to stay at parity, make additional revenue from payments, and improve the user experience without a team of experts to prioritize payments, a referral model makes a lot of sense.
The future of embedded payments
If there’s one thing consumers love, it’s convenience. In an increasingly fast-paced world, finding ways to save time and money remains a top priority for most companies. One area in the business landscape that’s undergone a major paradigm shift is digital payments infrastructure.
The future of embedded payments is bright, with new technologies and innovations set to revolutionize the payments industry. By partnering with Stax Connect, you can stay ahead of the curve and offer your customers a seamless, integrated payment experience.
Embedded finance is a growing, multi-trillion-dollar market
The market is hot for embedded finance. With a $237B valuation in 2022, the global SaaS market is projected to grow to $908B by 2030. And while it’s a rapidly expanding and shifting market as companies move away from more traditional payment methods, there’s still a lot of confusion around the topic.
By integrating payment processing into your platform, you can tap into this growing market and create new revenue streams for your business.
Four ways embedded finance will change fintech
The future of embedded finance is set to revolutionize the payments industry, with new technologies and innovations set to change the way we think about payments. Four ways embedded finance will change fintech include:
- Rearranged relationships between financial providers and consumers
- Increased access to financial services
- Improved customer experience
- Streamlined payment operations
Rearranged relationships between financial providers and consumers
As embedded financial solutions become more widespread, we can expect to see a rearrangement of relationships between financial providers and consumers. By offering financial services directly within non-financial products or services, embedded finance providers can reach new customers and offer more comprehensive solutions.
Increased access to financial services and financial institutions
Embedded finance has emerged as a transformative force, significantly enhancing access to financial services for SaaS platforms and their users. SaaS platforms can leverage embedded finance to empower users with streamlined access to services like invoicing, payroll management, and business loans, fostering operational efficiency and financial well-being.
By embracing embedded finance, platforms can elevate the overall value proposition of their offerings, fortifying their position as holistic business solutions while cultivating a more robust and loyal user base. This unified approach not only enriches the user experience but also opens doors to previously inaccessible financial services, firmly establishing SaaS platforms as comprehensive, reliable, and indispensable partners in the financial journey of their users.
Improved customer experience
Giving SaaS platform users the ability to accept payments from the same application they use to run their day-to-day business objectively improves the customer experience. By embracing embedded finance, SaaS platforms position themselves as comprehensive solutions that go beyond core functionalities. They become trusted financial partners, simplifying operations, enhancing efficiency, and providing indispensable value to their users. The future of customer experience on SaaS platforms lies hand in hand with embedded finance, and together they create a foundation for seamless, specialized, and empowering financial interactions.
Streamlined payment operations
With embedded finance solutions, the ability to accept payments becomes frictionless and tailored to the unique needs of users. Whether it’s processing transactions for services rendered, managing subscriptions, or facilitating peer-to-peer transactions, SaaS platforms can optimize payment operations to enhance user satisfaction and operational efficiency.
Furthermore, embedded finance empowers SaaS platforms to offer diverse payment options to accommodate varying preferences and requirements. From credit card payments to digital wallets and ACH transfers, users can choose the method that best suits their needs, all within the unified ecosystem of the platform.
Launch embedded payments with Stax Connect
Ready to launch embedded payments on your SaaS platform? With Stax Connect, you can easily and securely integrate payment processing directly into your platform, creating a seamless, integrated payment experience for your customers.
