Flexible programs

Implement referral, reseller, or managed and traditional PayFac, supported by industry-leading experts

Scalable technology

Simplified API with white label capabilities to enable embedded payments quickly and easily

Adoption expertise

Leverage our experts to speed up payments adoption through sales, marketing, and go-to-market strategies

How it works

People and technology to power payments

Our Stax Connect partner program combines the technology, processes, and people required to help maximize the revenue opportunities from embedded payments.

The Stax API and integration tools enhance the developer journey, ensuring seamless integration and operation, while our high-touch sales and marketing programs increase integrated payment adoption rates for new and existing customers.

SaaS payment processing with payments-led growth

Stax Connect combines the monetization power of payments with the control and security of your own infrastructure. Fuel your SaaS platform by enabling integrated payments and enhance your user experience.

SaaS payment processing

The software as a service (SaaS) industry is an ever-growing one, with the United States being the biggest contributor to its global revenue. In fact, the global SaaS market is projected to grow to $908B by 2030.

As more and more SaaS startups burgeon, SaaS businesses need to get their payment strategy right if they want to stay ahead of the competition. That means choosing a payment processing service that gives their customers a secure, seamless, and efficient way to purchase and pay for their SaaS products.

Unfortunately, though, SaaS payment processing isn’t all that simple. There are several moving parts involved all through the customer lifecycle. These need to be as optimized as possible so that SaaS companies can deliver seamless customer experiences while collecting steady payments.

What is SaaS payment processing?

Any business that wants to accept payments from customers needs the services of a payment processor. This entity will act as a go-between and ensure that customer transactions are properly carried out so that the merchant gets their funds in their merchant account.

In a regular eCommerce transaction:

  • The customer typically makes a one-time payment using a payment gateway.
  • The gateway securely handles the payment data and transmits it to the payment processor.
  • The processor routes the transaction appropriately and delivers the payment to the merchant.

As such, SaaS payment processing refers to payment processing for SaaS companies. In other words, it’s the process of accepting and managing payments for SaaS products. Here’s why it’s more complex than standard payment processing.

Because SaaS businesses charge users on a subscription basis, it makes the billing and invoicing process quite challenging. For starters, the company must keep track of each customer’s subscription plan, due date, how much to charge them, and via what payment method. Handling all this manually is a mammoth task and isn’t practical at scale.

SaaS businesses must, therefore, choose a payment solution that has robust automation and processing features along with effective invoice and billing management tools. It should allow users to make online payments via credit cards or other digital payment options and be able to manage refunds, recurring payments, and other billing-related tasks.

Ready to partner with Stax?

Talk with a payments-led growth expert about maximizing your revenue with embedded payments.

Types of SaaS billing systems

There are several types of SaaS billing models, some of which are discussed below. The best option for any SaaS company will depend on a variety of factors, such as the type of service they offer, the target market they cater to, etc.

1. Subscription or recurring billing

Also known as flat-rate billing, this SaaS pricing model involves recurring payments for access to a service on a monthly, quarterly, or annual basis. Customers are charged the same recurring amount depending on their chosen frequency. While it’s quite easy to understand, this billing model doesn’t offer flexibility when users want to scale. Zoom, for example, charges a recurring subscription fee (on a monthly or annual basis) for the use of its services.

2. Per-user billing

One of the simplest SaaS billing models, per-user billing charges customers based on the number of users who access the service. The main drawback of this model is that it restricts the number of active and potential users of the software, thus preventing greater adoption of the product. Slack, a SaaS-based team communication platform, is an example of a product that uses this type of SaaS billing.

3. Usage-based (or Pay-as-you-go)

In this type of billing model, customers are charged based on their actual usage of the service such as data usage, storage usage, number of processed transactions, bandwidth consumed, etc. An example of a service that uses this model is the cloud computing platform, Amazon Web Services (AWS), which charges its users based on how much of its services (computing, storage, network, etc.) they have consumed.

4. Metered billing

Metered billing is quite similar to usage-based billing but with more granular control over the pricing model. Customers are charged based on specific usage metrics like the number of API requests they make. For example, Algolia charges customers based on the number of search requests they make.

5. Tiered billing

Also known as feature-based billing, this model involves offering different pricing tiers based on the features and services included in each, with customers being charged accordingly. The main advantage of this billing model is that it allows businesses to serve a broader base of customers. HubSpot, for example, offers different pricing tiers based on the features and services included in each.

6. Freemium

In this model, a basic version of the product (with limited features) is offered free of cost, while users must pay to access more premium features or services. The project management and collaboration tool, Trello, uses this billing model.

7. Value-based

In this model, the pricing is directly tied to the value customers receive from using the product, such as increased revenue, reduced costs, or improved customer satisfaction. Prices are set after detailed analyses of customer behavior—how much they are willing to pay. For example, Xero, a cloud-based accounting software, charges customers based on the number of invoices and bills they process each month.

8. Customized payments

In general, all types of SaaS billing can be considered customized payments if they provide flexibility in the billing and payment process. For example, the ability to offer different billing frequencies (monthly, annual, etc.), promotions and discounts, or alternate payment methods. By offering customized payments, SaaS companies can meet the needs of individual customers and provide a better overall customer experience.

How to choose a payment/billing solution for your SaaS business

Owning the payment experience for your software users definitely has its advantages. For one, this presents an opportunity to create an additional revenue stream for your business. It also helps you rise above the competition by offering greater convenience to your customers.

The best part is that you don’t necessarily have to develop this from scratch. There are many plug-and-play solutions available today that can help you facilitate payments for your SaaS customers.

However, not all payment solutions are created equal. Make sure you consider the following parameters when choosing a partner for your business needs.

  • Proven track record. Check popular review forums to see what customers are saying about their services.
  • Fraud prevention. Make sure the solution is PCI compliant and uses tokenization to store payment info to safeguard your business and customers against data breaches.
  • Affordable costs. Understand their fees and costs and what’s included in them. Watch out for hidden fees or long-term contracts that may be difficult to get out of.
  • Multiple payment methods. Ensure the solution supports a variety of payment methods including card-not-present transactions.
  • Robust analytics. This is necessary for the timely identification of critical issues and opportunities for growth.
  • Integration capabilities. Review the system’s API documentation carefully to see how easily it can integrate with your existing solution.

Ready to partner with Stax?

Talk with a payments-led growth expert about maximizing your revenue with embedded payments.