For years, payments was a capability that SaaS companies didn’t give much thought to. It was a nice-to-have feature that was bolted-on and integrated a bit roughly – just a box to check. Today, that mindset is outdated. Embedded payments have become a core part of how SaaS platforms compete, grow and retain customers. It’s become a strategically important function that, in some cases, can even become a SaaS platform’s primary revenue generator.
If you’re building B2B SaaS, it’s time to start viewing payments through a different lens. Here are three reasons why:
- Vertical SaaS customers expect payments to be built in
- The revenue opportunity from payments monetization is now too big to ignore
- The UX improvement offered by well-integrated payments creates stickier, loyal and long-lasting customers
The Shift Towards Vertical SaaS Makes Payments a Core Product Function
Business software used to be highly horizontal, and platforms were stitched together using bolt-ons, third party-tools and external integrations that were often clunky and inconsistent. Today, the trend is overwhelmingly toward vertical SaaS.
An entire wave of new, industry specific B2B SaaS platforms has emerged, covering every small business you can imagine, from your doctor to your mechanic to your dog walker and beyond. These SaaS companies win by doing one thing exceptionally well. They reduce complexity and digitize processes. They centralize, unify and automate workflows that used to require three or four different vendors, and that increasingly includes payments. Because every merchant client needs to get paid.
And in a vertical SaaS world, payments is no longer “just a feature.” It’s part of the core product experience. If your software helps a plumber schedule jobs, track parts, manage service calls and generate invoices, but doesn’t provide a robust way to accept payments, the platform feels incomplete.
Payments Monetization Becomes Too Big for SaaS Platforms to Ignore
Software revenue models used to be pretty straightforward. At first, you’d sell perpetual licenses. Then the industry evolved and you’d sell subscriptions, and that was pretty much it. But the industry has evolved again. Diversified revenue is increasingly important to success. That’s one reason so many SaaS companies are turning to payments monetization – the chance to turn payments from a cost center into a core revenue driver that can even exceed subscriptions revenue.
The reason is simple. When payments is treated as a feature, your platform helps merchants get paid, but the value of those transactions flows past your business. You absorb the development work, the support burden, and the integration effort, but the economics go elsewhere. When you monetize payments, you become the provider. That means the commissions earned on transaction fees (known as residuals) go into your pocket instead of a third party payment provider. That’s a massive strategic shift, and you can’t ignore it, because your competitors are already embracing it.
Seamless Payments Improves UX and Creates Long-Term Customers
The strongest SaaS platforms don’t just offer payments, they make payments feel native. That matters, because payments is one of the most sensitive moments in the customer journey. It’s where trust is tested, friction shows up and drop-off happens. Payments that are bolted on tend to feel bolted on. And even in the best case, that creates a clunky experience: Merchants have to source merchant services separately, figure out how to connect everything and they often need support to make it work smoothly. In the worst case, poorly integrated payments can be jarring. It can pull users (and their customers) out of the workflow, erode trust and potentially result in customers walking away.
But when merchants can manage payments directly through your platform, something changes. Your software becomes more embedded in how they run their business, switching becomes harder and it improves retention. And if the payment experience is seamless, that benefit doesn’t stop with your users, it flows through to their customers too. At that point, you’re not just processing transactions, you’re helping merchants deliver better customer experiences, improve their retention and increase their lifetime value – while increasing yours.
Payments are Too Strategically Important to Go It Alone
Payments is now a must-have for SaaS platforms, but it’s also extremely complex. Compliance, regulatory and security factors mean that doing it right requires expertise, and that’s expertise that most SaaS companies don’t have in-house. That is why finding the right payments partner matters.
If you’re ready to make payments a key part of your growth strategy, you need a partner that can support you not only at launch, but at every stage as you scale and evolve. NMI’s modular payments acceptance platform is designed to turn that vision into reality.
Want to learn more? Listen to Peter Galvin talking more on this topic to the Leaders In Payments Podcast.
NMI can serve as a payments technology enabler at every stage of your journey. To find out more reach out to a member of our team.