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5 Benefits of Integrated Payment Systems for SaaS Companies

Integrated Payment Systems for SaaS Companies

The SaaS market has become increasingly competitive as startup after startup has realized the structural advantages and benefits of integrated payment systems. With new SaaS businesses constantly entering the market, consolidation is already taking place in popular verticals. As a result, it is increasingly important for companies to find differentiators, especially those that can boost the bottom line and improve the overall business. That’s where integrated payment systems come in.

What are integrated payments? Integrated payments refer to payments made through an integrated payment system, which is a payment processing solution connected to a SaaS business’s existing software or hardware (such as a point of sale system, CRM, accounting software, etc.). When integrated payments are processed, the transaction and payment data are automatically routed to the appropriate channels for accounting and recordkeeping. 

The Benefits of Integrated Payment Systems

Integrated payment systems offer a way for any SaaS business to improve its own bottom line, offer customers greater efficiencies, increase customer engagement and satisfaction, and open a new line of business. Here are some of the basic ways that adopting an integrated payments system can boost your bottom line.

Grow Revenue

One of the benefits of integrated payments is that it helps increase revenue for SaaS businesses. That increase can be as much as 2 to 5 times your current revenue. How does it work? 

First, with payments integrations, you enable your customers to accept payments using a frictionless checkout process inside your software, so they see better conversion rates, resulting in direct revenue increases. Second, using an integrated payments platform, you earn a portion of the processing fees from every transaction completed on your platform, generating an additional stream of income you can count on. 

Improve Customer Experience

Integrated payment systems can be added in many ways. However, a key benefit of a full payments integration is that it is also integrated into the user experience, resulting in a streamlined payment process. Rather than being redirected to an external checkout page, customers remain in your environment within the planned application flow. This simplified payment process results in more completed sales, engaged customers, and greater retention.

Using a payments integration platform to provide payments also means that you can more easily offer other related finance services, such as loans or credit cards, to your customers through your application, again increasing the value for customers and potentially driving new business for your platform.

The final advantage of a full payments integration in terms of experience is that you can also dramatically increase the speed of merchant onboarding. Other payment solutions typically have a disconnect during merchant onboarding and often a long waiting period for account approvals. With an integrated payments system, you can onboard merchants directly within your application and typically receive approvals the same day. 

Boost Retention

By adding value to your software through payment acceptance, you also boost customer retention, creating faster overall growth for your ISV or SaaS platform. Andreessen Horowitz says, “[integration] results in higher margins and a stickier product overall. It creates a more seamless customer experience—for example, a loan application offered through a familiar interface rather than being redirected to a third-party site. With an embedded service, the software provider can draw on a proprietary data seta—such as contractor sales to inform lending or product information for better warranties—to underwrite risk, factoring in things like seasonality to better tailor the service to each customer’s needs and risk profile. Ultimately, that produces better margins on fintech products and new go-to-market options.”

Outsource Payment Complexity

One of the key benefits of payment integration services is that you are outsourcing the complexity and risk of your payment operations. You get all the key benefits of integrated payments, but someone else handles the payment complexity, like underwriting, funding, and security. Outsourcing payment complexity also means you don’t need to create special payment operations teams to manage these functions. And (as long as you pick your provider wisely) you have an experienced partner helping you run the payments function.

Outsourcing payment complexity allows you to concentrate on your primary business and the payment functions that are truly differentiating and valuable to you—a unified integration and a better experience that will make your software even more attractive.

Outsourcing payment complexity also allows you to benefit from the most advanced payment technology when needed. For example, you don’t have to worry about adding the latest digital wallet. With the right payment partner, you can offer these value-added features with minimal lift.

Increase Company Valuation

As we discussed, it’s been shown that adding payment acceptance within your software increases revenue and, in turn, your company’s valuation. Adding payments is a new revenue stream that makes your business more attractive to potential investors. The combination of increased revenue and retention means your business will have visibly better financials, translating to better valuations.

Integrated payment systems are a powerful option for introducing payment acceptance to your customers. The benefits of integrated payment processing and using the right payment integration software will help drive multiple success factors for your business, take the operational burden out of your hands, and leave room to focus on ensuring your platform’s and business’s success.

Want to learn more about integrated payment systems? Check out our blog on finding the right integrated payments provider

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