You’ve onboarded your merchants and set them up to accept payments — but what happens next? Getting paid.
For software providers offering embedded payments, payouts are a critical part of the merchant experience. If funds don’t flow smoothly and predictably, it can lead to frustration, support issues and even churn. But payouts don’t just impact your merchants — they affect your bottom line, too.
Payouts happen on two levels:
- Merchants receive funds from their completed sales — the faster and more reliably, the better
- You earn revenue through residuals (the fees collected on transactions) and splits (your share of those fees)
Unless you’re operating as your own payment facilitator, your payment processing partner plays a key role in how these funds move. Finding a partner that can offer a frictionless, transparent payout process is essential for both your merchants and your business.
In this third part of our series on SaaS merchant journeys, we’ll break down the payout journey — what a smooth process should look like, common hurdles that can get in the way, and how to ensure timely, accurate payouts for both your users and your business.
If you missed our earlier posts, part one covered merchant onboarding, ensuring a seamless sign-up process. Part two explored payments acceptance, helping your users start transacting with ease. Now, let’s dive into what happens behind the scenes to move those funds.
In a Competitive Industry, Speed Matters
The longer your users have to wait to receive payouts, the more dissatisfied they’ll be with their payments experience. With no shortage of competitors trying to earn their business, that makes quick payout a key part of standing out in a crowded market.
Everyone wants their money as soon as possible — and with very good reason. Fast payouts on sales help your users with everything from cash flow management and emergency planning to reduced credit dependence, better supplier relationships and beyond.
There are also good reasons why payouts are usually subject to pre-defined delays, called standard holds. These holds allow for better risk management, refund processing, chargeback defense and fraud mitigation.
But your users really don’t care about any of that. So, delivering an exceptional payments experience means you’ll need to partner with a provider that can disburse funds as quickly as possible. A hold is to be expected, but anything beyond one or two business days on average will start to put you at a disadvantage.
Good Payout Reporting is an Absolute Must
Payments is a data-dense business. Although the fees earned on any given transaction are small, when multiplied across thousands, hundreds of thousands or even millions of individual transactions, you stand to earn a significant amount of additional revenue.
However, all those transactions can make tracking and understanding your payments business a huge headache if you have substandard reporting tools.
Building your own reporting dashboard is an option, but it’s expensive, time-consuming and requires deep expertise. Luckily, the right payments partner will offer you a reporting dashboard designed to make it fast and easy to generate reports on your payments business. Good reporting tools will offer high-level and granular insights into user performance, transaction histories, residual payouts and everything in between.
Learning the ins and outs of your residuals reporting tools will ensure you always have a clear picture of how your payments monetization efforts are performing and how they can be refined to maximize your revenue.
What Comes After Payout?
Fast, frictionless payouts are one of the most important parts of creating a great payment experience for your users. It’s also key to making payments monetization a headache-free proposition for your company. But money movement is one function that can’t really be custom-built in-house, so finding a partner that can offer you a great payout journey is a critical part of success in software payments.
To find out more about payouts and the other three critical payments journeys, keep an eye out for part three or reach out to a member of our team.
