SaaS payment processing has many unique qualities, like the need for a subscription-based workflow. Learn more about payment processing for SaaS companies.
Software as a Service (SaaS) companies don’t deliver a discrete physical or digital product to their customers. Instead, they supply access, hosting, maintenance, and support for a software application.
Therefore, subscription fees are a crucial part of the foundation for SaaS businesses. These companies count on recurring revenue from their customers to manage the ongoing costs of providing effective and useful software. And to turn a profit, of course.
Effective SaaS payment processing needs to align with this unique business model. That includes efficient and secure methods for managing recurring payments.
SaaS businesses have a specific formula for success that requires a relevant and reliable payment processing workflow. Keep reading to learn more about SaaS payment processing and the unique considerations that come along with it.
Already know your SaaS company needs to make a change when it comes to payment processing? Interested in monetizing payment processing for your clients, but not sure where to start?
Swipesum can put SaaS payment processing experts on your side. Our independent consultants can help you find the best solution for payment processing, from souring options to negotiating fees. Learn more about how we support SaaS companies with effective payment processing solutions.
A recurring billing system is the backbone of just about every SaaS business. Whether SaaS clients are businesses or individuals, many of them count on continued access to the application. Recurring billing with an automatic monthly fee for a SaaS product makes sense for both the provider and the users.
The focus on recurring payments means subscription management capabilities are important as well. That includes security as a top priority. However, it also involves supporting many other general and specific needs related to recurring payments.
In many one-off transactions, the burden often falls on the customer to complete a transaction if a problem arises. They take the lead in fixing an error or trying a different payment method.
With a payment method kept on file, the business faces more of a burden. It needs to remind customers to make an update if their card is expired or declined.
There are also different subscription models to consider. Unless your SaaS application has just one subscription option, different tiers at distinct price points need to be established. Additionally, what if you charge customers based on usage, or other variables?
For SaaS applications that help users collect payments from their own customers, there’s even more to consider. A SaaS provider may want to monetize this payment processing feature, for example.
The right SaaS payment solution streamlines recurring billing. It can make managing those subscription tiers and additional variables easier. It can help with reminders and dunning for expired cards and declined payments, too.
The good news is these tools are already mature and used by SaaS companies large and small. The key is to find the best possible SaaS payment gateway and overall SaaS payment solution. In other words, the solution that best aligns with your specific business needs.
We just reviewed the distinct payment environment in which SaaS companies have to operate. Unique features in the SaaS business model require a different approach to payments than most other enterprises.
We also know that it’s entirely possible to address these challenges. A variety of SaaS payment processors and gateways are available — and are used with great success by many SaaS providers. How do SaaS companies with an effective payment processing solution benefit from them?
Payment processing solutions designed for recurring subscriptions automate billing and scheduled transactions.
There’s no need for staff to manually complete transactions or send invoices. They don’t need to slowly work their way down a list of customers and subscription types. That means eliminating much of the potential for human error from a crucial, revenue-focused process.
Offering a variety of subscription plans can be difficult or even impossible with a payment processing solution designed for individual transactions. That can lead to manual work by staff on the back end. Employees use valuable time to bridge the gap between your business model and the solution’s limitations.
SaaS payment solutions are designed with the unique needs of the industry in mind. They’re built to make things easy for both providers and customers. It’s easy to automatically generate reports and send reminders to clients who’ve missed payments.
It’s also easier to allow costumes to make tier or subscription changes themselves. That also provides a better user experience, which is vital for success as a SaaS company.
Do your users truly enjoy or gain a business benefit from your software? The last thing anyone wants in that situation is a billing and payment system that leads to a poor experience.
A user interface designed around recurring billing makes things simpler overall for customers. It streamlines otherwise complex tasks, like updating credit card information or changing subscription tiers. That means higher customer satisfaction and, potentially, more loyal users.
Leading SaaS payment processing solutions automatically generate reporting related to revenue, subscription trends, and more. They also work with other financial tools and systems used by SaaS businesses to automate key processes.
Why have staff spend time on important but rote and error-prone bookkeeping tasks when your payment processing solution can do it for you?
The broadly relevant benefits for SaaS businesses we just reviewed are obviously helpful. However, there are many SaaS payment platforms available. Finding the right one for your needs is just as important as moving to a SaaS payment processing solution in the first place.
Swipesum can help your business do exactly that. Our payment industry experts find the best possible solution and negotiate merchant account and other fees on your behalf. They’ll provide support for ongoing optimization and performance management, too.
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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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