Decision Tree – SaaS Payments: What is the Best Embedded Payments Model for Me?
What’s Right For You
When deciding on the best embedded payments model for your business, you’ll need to consider your resources, desired business outcomes, and ideal launch time. Here are some questions to help guide you during the decision-making process:
1. How much overhead are you willing and able to put in?
Do you have the time and capital to build custom payment features – or potentially a full payment tech stack? If you are limited in terms of both time and money, then pursuing a traditional referral partnership or becoming an ISO likely makes the most sense. If you have slightly more resources but you’re still looking to keep costs relatively low, then partnering with a managed PayFac is a great option.
2. Are you in need of a fast ROI time, or are you in it for the long game?
Referral partnerships and PayFac partnerships will get you on track to monetizing payments much faster. On the other hand, becoming an ISO – or even more, so a full PayFac – means it’ll take longer to see your ROI.
3. What business drivers are most important to you?
What are your main goals for integrating payments? For example, if innovative and embedded payment functionality is a key driver, then you’ll want to stick with the PayFac model – either by operating as a full PayFac or by partnering with a managed PayFac.
4. What are your in-house development resources?
Becoming an ISO or entering into a referral partnership keeps in-house development to a minimum, as does partnering with a managed PayFac. On the other hand, building a full PayFac infrastructure requires a full development team on staff.
5. How much responsibility are you willing to shoulder for underwriting merchant accounts?
As an ISO or full PayFac, you’ll be more closely involved with onboarding accounts – and this means you’ll be taking on some risk. With a referral partnership or PayFac partnership, however, your partner takes on more of the burden and risk.
Start Monetizing With Exact Payments
Our managed PayFac solution enables software companies to embed powerful payment processing features and enjoy generous revenue-sharing opportunities. With our low-code integration options, you’ll be able to get up and running fast with embedded payment functionality, a powerful end-user experience, and a profitable revenue stream. Plus, once your processing volume gets high enough that you would consider becoming a full PayFac (i.e. at$100 million annually+ in volume), our tech is able to help you transition to the full PayFac model – even further boosting your revenue potential and business valuation!
Need some guidance on what the best option is for your business? Click here to set up a quick, no-commitment chat with a member of our team! We take pride in helping software leaders like you to navigate the payments landscape. Contact us today!