Software and payments are a powerful combination — especially in a world where speed and convenience are priorities. In the past, merchants had to combine solutions from two or even three completely separate providers to sell their products and services. Now, embedded payments are putting the entire payments experience — starting at sign-up — into the software platforms that businesses worldwide use every day. That offers significant benefits to software-as-a-service (SaaS) providers, tech-savvy independent sales organizations (ISOs), business users and the end consumers making payments.
In the first part of our series, we explored what embedded payments are and where the market is headed. Now, in part two, we look at those benefits and why software-led payments are taking on such an important role in commerce.
Build Your Own Platform: The Old Method of Integrating Payments
Integrating the ability to take payments into software isn’t a new idea. But, until very recently, merchants who wanted to do that had to bring their own payment processing services. They needed a merchant account from one vendor, a payment gateway from (likely) another vendor and then the software. That three-part process wasn’t always complex, but it was incredibly cumbersome since it required three separate sales processes, bills, support teams, etc.
Fully Embedded: The New Way of Integrating Payments and Software
Today, software companies and next-generation ISOs have realized two important things: the old way of integrating payments caused too much friction, and forcing merchants to find their own payment solutions left money on the table.
To deal with both issues, more SaaS providers are incorporating payment processing and merchant services like gateways directly into their platforms. That way, instead of using a third party, merchants can sign up for payment processing and merchant services directly with the software vendor, simplifying the entire experience.
Some software vendors become registered payment companies to make this deeper integration possible. But, in most cases, software developers let a partner power the back end of their payment offerings. With that arrangement, the merchant signs up for services directly through the software provider, but the information is instantly and invisibly passed to the payment provider behind the scenes. The merchant is then issued an account and can get a payment gateway or any value-added services (VAS) they need.
The payments partner provides all the payment services, but the entire user experience appears to be happening through the software company. That provides both frictionless sign-up and service delivery on the payments side and a completely seamless, branded user experience on the software side.
Why Seamless Embedded Payments Are So Important for SaaS Providers
Software-driven embedded payments offer significant benefits to everyone involved — software providers, merchants using the software and the merchant’s end customers.
Embedded Payments Provide Merchants With an Essential Feature: Convenience
Embedded software payments make things extremely convenient for merchants. From point-of-sale (POS) software in retail stores to client management systems at service businesses like doctors, gyms and spas, most companies already have software services at the core of their operations. Building a complete payments experience into those software platforms provides businesses with even more utility and value.
With embedded SaaS payments, signing up for payments can be reduced to minutes. Instead of spending days searching for, selecting, and communicating with an outside payment processor, merchants can partner with a SaaS provider who they already know and trust. Then, if technical issues ever arise, the merchant has access to a support team they already have a relationship with.
Embedded Payments Help Provide Customers With a Frictionless Omnichannel Experience
Modern consumers expect to be able to pay when and where they want, whether it’s at the counter, online or on their phones. Software-driven solutions naturally lend themselves to these types of digital, omnichannel payment setups, making it easier for merchants to give customers the options they demand.
For example, a dentist using embedded payments built into their client management system can easily take a card payment at the front desk. However, they can also drive payments through the software in other ways. With the patient’s contact information stored in the system, the dentist can automatically email or text an invoice with a click-to-pay link.
Embedded SaaS Payments Unlock Hidden Revenue Streams
Embedded SaaS payments represent a huge competitive advantage for software vendors, as well as a lucrative source of revenue. In part three of this series, we’ll look at how offering payment services can help SaaS companies tap into their existing user base to unlock new revenue that they might be neglecting.
To find out more about how NMI can power your SaaS payments journey, reach out to a member of our team today.
Don’t just turn on payments, transform the way you do business
- Generate New Revenue By adding or expanding payment offerings to your solution, you can start earning higher monthly and transaction-based recurring revenue.
- Offer the Power of Choice Allow merchants to choose from 125+ shopping cart integrations and 200+ processor options to streamline their onboarding.
- Seamless White Labeling Make the platform an extension of your brand by adding your logo, colors and customizing your URL.