Payments will be software’s holy grail

Why the most successful SaaS companies will grow on the back of payments

Getting real about payment facilitation

The payments industry has been generating significant noise lately, but the reality is the space is still largely occupied by legacy players who are consolidating and giving the appearance of innovation without actually changing the game for their clients. Without new solutions, payments will remain an unnecessarily complicated utility for companies processing transactions. And while the industry’s favourite buzzwords of payment facilitation paint a golden picture for monetisation potential among clients with high payments aptitude and an appetite for risk, they paint an incomplete picture of payment’s future potential.

To be clear – monetising payments is a critical ingredient for the growth and success of the SaaS companies and digital marketplaces. But so few of those on the cusp of becoming the next Shopify, or GoFundMe, or Mindbody employ a payments professional let alone a full staff for payments risk and compliance. The tip of the spear for these is the promise of revenues from payments and a solution that is more tech-focused – a payments software as a service. But that’s not enough. Too many emerging players sell the idea of the software company becoming a payments company and leave their clients halfway to the promise-land: stuck with the cumbersome responsibility of full integration, risk boarding and compliance.

So how do tech businesses navigate around this? Let’s first start by clearly defining the newest models in the payments space – from payment partners to payment facilitation. I’ll start with the hot topic at hand, payment facilitation. When software companies are sold the idea of becoming a payments company, they’re buying into becoming a payment facilitator. In short, this makes the software a master merchant account provider who through a contract with an acquiring bank can board sub-merchants and facilitate payment transactions for them. That payment facilitator has ultimate ownership of their payments contracts, not just pricing but all associated risk. Beyond the basics of what it is, the path to facilitation can be an arduous journey – filled with due diligence, card brand registrations, tech development, certifications, and more. Conversely, integrated payments via a partner are a software platform’s simplified route to accepting payments through a facilitator’s master merchant account. With this, a platform is up and running quickly and relies on the payments partner to do the heavy lifting of technology maintenance, risk and compliance.

Building total enterprise value

The key is finding the sweet spot between partner to payment facilitator for each SaaS provider. Payment facilitation is a huge opportunity that allows software companies to take control of their payments experience as a part of their integrated software offering and maximise top-line revenue, however, many providers prefer to mature to this destination through an aligned payments partner.

Our flexible platform is designed to empower tech-led businesses to control the payment experience and optimise revenue for maximum growth, whether customers are all-in on payment facilitation or better suited for a payment facilitation-like solution.

We enable software companies to jump-start a high-growth payments business, as well as those ready – to fully seize the embedded payments opportunity as a payment facilitator. Our out-of-the box, full production platform is seamlessly layered into a client’s platform, mobile app or marketplace. This creates a world-class customer experience and allows clients to tap into additional revenue streams that accelerate growth.