- Finding the right billing solutions, marketing strategies, and payment processing services is crucial for SaaS businesses to stay ahead of the competition.
- The role of payment processors and payment gateways directly impacts retaining customers for SaaS businesses.
- Certain factors should be considered before choosing the SaaS payment processing service.
Online payments? Check. Credit cards? Check. Easy transaction? Check. SaaS payment gateway? Unsure? Then know this – If you are ready to conquer the world of SaaS, you will require cutting-edge billing solutions, game-changing SaaS marketing strategies, and seamless payment processing services. According to Statista, global eCommerce retail sales will increase by 50% reaching around 7.4 trillion dollars. The rise of online transactions has made SaaS businesses adopt electronic payment gateway. No wonder SaaS businesses are on the prowl for the best tools to stay ahead of the competition.
But with the plethora of options, how does one navigate the maze of SaaS payment gateways and find the perfect fit for your SaaS venture?
Here we’ll delve into key factors to consider when selecting a SaaS payment processing service based on the insights from industry experts and their perspectives on what matters most in this dynamic landscape.
Role of Payment Processor and Payment Gateway During the Payment Process
The ability of companies to collect payments from clients without having to deal with the complexity of constructing and maintaining their payment processing infrastructure is referred to as SaaS payment processing. This is achieved through a third-party payment processor, which manages every facet of online payment processing from beginning to end.
A payment processor is a mediator that lets a business and its customer manage transactions to ensure successful revenue generation in merchant accounts. Payment processors and payment gateways frequently need clarification. Yet, they have various functions during the payment process:
- The payment gateway sends confidential data to the payment processor and approves or rejects a transaction.
- To transmit the required funds, the payment processor relays this information to the originating and acquiring banks.
Using a reliable payment processor becomes crucial for SaaS companies when they gain subscribers. Therefore, the processor must include pricing models that can be scaled and optimized in the recurring billing model. Moreover, a payment processor is beneficial in terms of the following:
- Improving customer experience – Helps customers to update and change their billing plan.
- Simplifying accounting and reconciliation– You may reconcile your revenue instantly for thousands of memberships.
- Automate recurring billing – Offers a fully customizable billing solution with automatic card processing at intervals.
Factors to Consider When Choosing a SaaS Payment Processing Platform
Not all SaaS payment processing services perform equally. Here are some key factors to ensure you find the right choice for your business.
Is it PCI-compliant?
In an online transaction, a customer’s financial data is of foremost concern. One survey reported that the percentage of businesses fully compliant with the Payment Card Industry Data Security Standards (PCI DSS) was less than 28% and is declining yearly. Therefore, any SaaS payment processing service should be PCI DSS compliant. However, tokenization is the standard way to learn whether the potential credit card processor is fully compliant. This standard method removes card data and adds an extra layer of protection.
Various Payment Options
You can miss out on opportunities for quick growth if you don’t provide a wide range of payment alternatives. Customers have preferred payment methods, whether it be via a credit card, PayPal, ACH, or SEPA debit, and if you don’t allow one of them, at least part of them will abandon your site and make their purchase from a rival.
Don’t overlook the elements needed for the best possible client relations and conversions, such as discounts and promotions, personalized invoicing, and refund policies.
When comparing the subscription business model, you should look at the complete list of payment methods they may accept, including a list of currencies. Therefore, payment localization features are a win-win.
Fraud Prevention and Security
It’s critical to enquire about the precise security procedures in place to safeguard your data in addition to PCI compliance. A reliable payment processing solution should provide encryption, tokenization, and fraud detection technologies to protect your clients’ information. Beyond safeguarding consumer data, accepting payments online puts your business in danger. Although SaaS providers may not be the most common victims of payment fraud, it does occur.
Be sure the provider can manage all of your current offers, payment alternatives, and billing localization. Does it support both one-time and recurring payments? Do you provide advanced membership plans or usage-based programs?
Ensure you have access to dependable customer care in case of any problems or inquiries. A solid payment processing solution must provide various assistance options, including chat, email, and phone. To ensure that you can address any problems quickly and effectively, evaluating the quality of support offered and the response time is crucial.
Businesses are often willing to pay the price of convenience. Stripe and Braintree are prime examples of all-in-one services. They are super convenient as a payment processor, even with basic features for subscription management. The reason? They are super easy to use – hence user-friendly, if not efficient, is a top priority for many.
Easy Website Integration
The payment system must be simple to integrate with your current website and have a strong API.
You must pick a simple payment gateway solution to incorporate into your online store. Otherwise, the payment procedure takes too long, degrading your website’s user experience. Choose a platform with easy-to-follow integration instructions and reachable customer support whenever you need help with the payment system.
Your pricing strategy will directly influence your choice of software as a payment solution for your SaaS.
Be sure the solution you choose has the features to support your SaaS payment model because one-time sales and subscriptions are handled differently (including your pricing strategy and payment terms).
Pay particular attention to the following:
- Options for monthly, quarterly, and annual payments
- Create payment schedules, discounts, and fees
For instance, usage-based or user-based pricing is handled differently and necessitates distinct functionalities from your payment processor.
Ensure you are entirely aware of the cost before employing a SaaS payment processing solution. Payment processing is fundamentally complex. Several sorts of transactions have different costs attached to them. For instance, processing a credit card is more expensive than processing an ACH transaction. But it’s crucial to know any unstated costs, such as those for setting up a gateway or a merchant account.
Check to see if there are any additional fees for foreign transactions besides the transaction fees. For instance, some solutions could impose a cross-border or currency conversion fee, which can quickly mount up and affect your costs. A feature in high demand for B2B Credit Card payments in SaaS (and also true for direct bank transfers) is the capacity to manage several currencies.
Be sure your payment processing software can handle these currencies if you intend to expand to other nations. Because switching has a considerable cost, it is preferable to plan ahead.
Scalable as the Business Grows
Be sure the solution can scale up and expand along with your organization. See if the program can process a large number of transactions without crashing or slowing down. Check for any restrictions on the variety of transactions, accepted payment methods, or supported currencies.
A practical payment processing solution should be adaptable and expandable to meet your company’s changing needs.
Dunning is a persistent problem for B2B SaaS businesses. Check to see if these procedures are adaptable or match your demands because various payment processing software will have different rules set up when a payment fails.
Finding a business that provides dunning management, which retries cards after a failed transaction and sends delinquent accounts reminder messages, is advised. Dunning management is essential if you sell subscription plans to lower subscriber churn.
Instead of hovering on review pages for the best SaaS billing software, you can easily explore Segpay. It is a global payment platform specializing in online credit card processing for subscription-based content providers and retailers. Clients are offered the best solutions-based processing, including payment facilitation, direct merchant accounts, and secure gateway services.