Which Payment Gateway to Use for My SAAS Business

Wondering which payment gateway to use for your SAAS business? Learn more about payment gateways and selecting the best option for your company.

Payment gateways address a foundational need for your business, helping you accept online and mobile payments.

Gateways are commonly used by SAAS enterprises to collect recurring revenue. A payment token is generated for each customer. Storing tokens in a payment gateway allows you to switch freely among providers as your business’s needs change.

The alternative is a direct integration with a merchant services provider, such as Stripe or Worldpay. Direct integrations mean the provider owns the data. That makes it nearly impossible to complete a data migration and change providers later on. Use a gateway, pay the small gateway fee, and your business will have more control and flexibility.

A SAAS payment gateway makes it easy for your customers to keep up with their payments. Crucially, a gateway also makes it easier for you to easily and reliably collect those funds.

All gateways have similar costs, but differ in specific functionalities, reporting dashboards, and supported providers. Finding the best payment gateway for your company helps you provide a better experience for your customers. It can also help your enterprise save money, reducing the cost of doing business by avoiding excessively high processing rates.

How can you determine which payment gateway to use? We can help. Keep reading to learn more about the best payment gateways for SAAS businesses.

Feeling overwhelmed or unsure when it comes to payment gateways? Do you already know you won’t have the time to dedicate to researching your options in depth? 

At Swipesum, we’re software developers, too. We recognize how complex this process can be, and how important it is to get it right. Our independent consultants aren’t beholden to a specific payment gateway provider, or any other service. 

We help you identify the best options and negotiate to lower your rates. And we’ll provide our advice at no cost to you. Book your consultation today!

Why SAAS Businesses Need Effective Payment Gateways

Collecting recurring revenue is the backbone of many SAAS companies. It’s right there in the name: software as a service. Your customers can benefit from the ongoing development and support you provide as much as they can from the software itself. 

The nature of your business means having a reliable, secure, and convenient option for managing recurring billing is critical. That’s what makes payment gateways so important for SAAS businesses.

What is a Payment Gateway?

Payment gateways are one of many payment solutions used by modern businesses. They facilitate the collection and secure storage of client payment information. That’s a foundational step in the payment process.  In practical, customer-facing terms, the payment gateway is a webpage where customers can enter payment details.

Gateways store recurring payment tokens, which is an especially important point when it comes to SAAS business and recurring revenue. That means you can securely keep customer payment information ready to use. That remains true even if you choose to change your merchant services provider in the future.

The unique features offered by specific gateways, and the cost differences between them, are the two major factors in choosing the best fit for your business. Widely used and popular features to consider as you make your decision include:

  • Automatic Level III processing
  • Automatic card updating — recurring payments will still process even when the current version of a customer’s card expires
  • Quickbooks plugins
  • Gateway emulators

Understanding the difference between a payment gateway and a payment processor will help provide a full grasp of online payments. 

Investopedia offers a very concise explanation of both systems. “A payment gateway collects customer card information and encrypts it for later processing. A payment processor uses that information to charge the customers' bank or credit card provider.” 

A payment processor will take the information from your payment gateway. Then, it connects with your merchant account as well as your customer’s bank. That’s the second half of completing the transaction.

A woman holds up her credit card as she makes an online payment with a laptop computer.

Your SAAS Business Needs a Merchant Account and Payment Gateway

Merchant accounts are more convenient than other options, such as invoicing customers using accounting software like QuickBooks. Having both a merchant account and a SAAS payment gateway solution helps you streamline your operations.

A  merchant account from a top provider is the most robust and lowest-cost way to accept payments. Your gateway will help you connect that merchant platform to accounting software, e-commerce platforms, and other software your business licenses.

To directly integrate a merchant account into your software, a gateway offers the easiest path. Gateways also offer added features and increased security.

Ideally, a SAAS company will select both a merchant account and payment gateway as it starts to generate monthly recurring revenue. That makes it as easy as possible to collect and securely store payment information, as well as the payments themselves.

It may be tempting to consider fixed-rate, closed systems. These can seem like convenient options to address your needs related to collecting customer payment information and revenue.

To be clear, big names in this space like Stripe, Square, and Braintree do offer convenience. However, they also force you to pay high fees and lack many useful features commonly found in gateways. Additionally, they ultimately own the payment tokens you generate. That makes it much more difficult to change providers later on.

The best SAAS payment gateways are open to several merchant services companies and offer multi-MID capabilities, so one gateway can manage all of your merchant accounts. That arrangement helps you get the best rates possible. You won’t be boxed in by a closed system and left paying too much simply to complete recurring transactions.

Does Your Software Facilitate ACH or Credit Card Payments on Behalf of Customers?

Here’s an important exception when it comes to the value of payment gateways for SAAS businesses.

If your clients use your SAAS solution to manage money themselves, a payment gateway won’t be the best solution. You’ll need a more specialized and effective approach. Integrated payments and payment facilitation are your best bet.

This is an opportunity for merchant services to become a revenue source for your business. When your software also acts as the payments company, there are many ways to monetize the volume of payments running through your software.

What are Some of the Best SAAS Payment Gateways?

As independent payment consultants, we stay up to date on the biggest names in the industry, emerging competitors, and every service provider in between. When it comes to payment gateways for SAAS companies, we believe these are some of the very best:

Support from the Experts: Better Results with Swipesum

You know that finding the best possible payment gateway for your SAAS company is a top priority. For many business owners and decision-makers, the obstacle to finding that gateway isn’t a lack of understanding. It’s a lack of available time, resources, and expertise.

Payments are especially complex. Unless you’re in the industry yourself, it’s all too easy to feel overwhelmed when you start reviewing and comparing options. And, even if you truly want to build a deep understanding of payment gateways, can you find the time to take away from the core needs of your business?

At Swipesum, we’re payments experts. Our independent consultants know how to identify your needs and priorities, then find solutions that match them. We’re committed to not only connecting you with the best possible service, but eliminating unnecessary fees and saving you money as well.

We’ll stay with you throughout the process to provide integration assistance and hands-on implementation support. We’ll help monitor the health of your accounts as time goes on, too. Best of all, we deliver this service at no cost to your organization.

Find the very best of the best among many payment gateway options for your business: Book Your Free Consultation!

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Michael Seaman

Michael Seaman

Michael is the co-founder and CEO of Swipesum. A veteran of the payments industry, Michael and his brother Stephen have led Swipesum since its inception in 2016. In his free time, Michael enjoyes time with his three children.

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