You’ve likely heard, or been told, that payments are the number one future growth opportunity for SaaS companies. They make your customers stick, you get a competitive edge, and you can even use it to drive a whole new revenue stream.
It’s no secret that customers, like yours, are looking for a better way to accept payments, and as their software provider, you’re an ideal candidate to provide one.
So how do you do it?
You’ve likely come across a plethora of forum posts, articles, guides, and endless legislation around becoming your own payment facilitator, and you may be thinking, oh dear.
But it’s important to remember that there’s more than one way to incorporate payment processing into your business. This hasn’t always been the case, but recent developments around incorporating payments are generating great new opportunities for SaaS companies selling to vertical markets. No doubt that’s why you’re reading this.
Thanks to continuous innovation, there are a growing number of options that can enable you to offer (and benefit from) integrated payments. Choosing the right model comes down to your goals and how much you want to take on as a business.
First, let’s define what integrated payments are. Simply put, integrated payments refer to a payments solution that is built (or integrated) into your software. Integrated payments is often the final piece in creating an all-in-one business management solution for your customers, and (bonus!) also adds a new revenue stream to your bottom line.
Which payment processing business model is right for you?
Offering payments as part of your software solution isn’t just reserved for the big guys anymore. Neither is being able to monetise them. Nowadays, there are three primary business models a software company can use to generate revenue from payments.
- Offer integrated payment solutions with full support
- Set up payment facilitation as a service (PayFac-as-a-Service)
- Become a PayFac® (a.k.a. payment facilitator)
Here’s more about each model
Integrated Solutions - More control with full support
Payfac-as-a-Service - Fast, simple, and smart
The PayFac Model - Maximised revenue potential
| Integrated Solutions | Payfac-as-a-Service | The Payfac Model |
|---|---|---|
| Instant account-servicing solution for you and your customers | Path to becoming a full PayFac | You become the processor |
| Revenue with full support | Revenue from customisable pricing/processing fees | Maximised revenue potential |
| Fully managed customer underwriting and risk assessment | Partner assumes all of the risk and build-costs associated with processing the payments | Increased risks and costs |
Faster onboarding with full control of customer experience | Choose your level of control | Responsible for technology infrastructure, underwriting, onboarding, and customer service |
| Customisable portals, customer onboarding, and underwriting | Seamless integration with your SaaS platform | |
| Full-suite of payment capabilities | Fast and efficient onboarding | |
| Billing and funding protection for you and your partners | Customisable as you grow and scale | |
| Decreased time to market | ||
| Integrated technology solution |