If you could implement functionality within your software platform that would improve your subscriber retention by enhancing the user experience, you’d strongly consider it, correct? And if that solution could also provide you with new revenue streams — it becomes something you’d need as part of your platform. That’s exactly what embedded payments are and why so many software platforms are including payments as part of their platform.
Embedded payments are when payment functionality is embedded directly within a software platform. That way Software-as-a-Solution (SaaS) Providers can include payments as part of their own product offering instead of needing to refer their clients to third-party payments partners if they want to accept payments.
In today’s digital world, where users expect their portals and applications to be as simple and straightforward as possible, software platforms can no longer rely on third-party payment service providers if they’re looking for payment functionality. Embedded payments facilitate a more convenient checkout experience by allowing customers to complete their transactions without having to leave your platform’s website or mobile app. SaaS providers who don’t offer embedded payment functionality are going to be outpaced by competitors.
The main reason that you want to have embedded payments functionality as part of your platform is that you get to own the experience. With no third-party redirects, you not only have control over payment functionality, but you also get to enjoy several major benefits:
- You can sell white-label payments: Owning the experience means you have full autonomy over decision making for platform features, functions and customizations. And with white labeling, your clients only see your branding, giving you full credit for the entire process. Overall, it allows you to deliver payments in a way that works best for you and your customers.
- You’ll offer an improved customer experience: Having greater control over payments allows your platform an enhanced customer experience by providing a single point of interaction, reducing the number of pain points and offering a seamless cash flow. When it’s easier for customers to make purchases, there’s less cart abandonment, a greater percentage of purchases and happy clients.
- You can reduce client churn: Did we mention happy clients? Embedded payments are not only easy for your clients to implement, features like assisted onboarding and a single point of contact offer a level of convenience that wins loyalty and makes it less likely they’ll go to a competitor. This increased stickiness increases the value of each client as, according to research from JP Morgan, software platforms that embed payments see a 2- to 5-time increase in revenue per client.
- You’ll have an additional source of revenue: Aside from an increase in value per client, you can also use embedded payment as an additional revenue stream. Embedded payments allow for new lines of business such as lending or instant payouts, in addition to new sources of revenue through transaction fees, credit interest and international payments.
- You can reduce your overall technical debt: Having to work with third-party payment solutions can lead to integration support and troubleshooting that you don’t benefit from. Having a single experience allows you to eliminate the headaches caused when clients bring their own third-party payment solutions and expect you to handle the integration.
Altogether, the benefits of embedding payments make them table stakes for today’s SaaS providers. They allow you to streamline your payment processes, accelerate revenue growth, and provide a more convenient and efficient experience for your users. How can you embed payments into your platform? Here are some tips on how to get started:
- Look for payment facilitators that have global capabilities. Your clients are global, and your payments must be as well. A lot of payment companies can manage domestic tax compliance — but only a few can help you do this on a global scale. Look for companies that have extensive global capabilities including an extensive list of currencies and payment methods, as well as robust local card acquisition to increase revenue and global compliance.
- Select a solution that offers flexibility and scalability that meet your capabilities. Every company is different, and your needs and resources should determine the level of support and service that a payment facilitator can provide. If you’re looking for faster speed to market, does the provider offer expedited onboarding? Does it promise the ability to grow with your company and serve your clients no matter where they are?
- See if they allow you options for staged risk. You should be able to decide on the level of risk that you’ll take. Is the facilitator able to manage know-your-customer (KYC) and anti-money laundering (AML) regulations? Do you have a choice if you want to take on those responsibilities? Do they provide visibility into the underwriting process? Your payments solution provider should give you different options to dial up or down the amount of risk (and reward) that you take on.
- Ask about additional features and functions that can enhance the payments experience. Don’t settle for bare functionality, look for services like:
- White-label branding options to ensure that your branding is the only one that your clients will see.
- Expert and full-time support to ensure that you and your clients don’t have to wait for days for a response to an issue.
- The capability to bring over your entire book of business through a frictionless import that’s both secure and simple.
Embedded payments are one of the most effective integrations your platform can include to increase client value and open new sources of revenue. Choosing the right payments partner provides you with the capability to build a global, customized payment experience that will win over new clients and retain existing ones.
Author/Bio
Dana Odom
Dana Odom is the Head of Global Embedded Payment Sales at BlueSnap. A US Marine Corps Infantry Veteran, Dana has more than 10 years of experience helping integrated software vendors manage their payment programs. He lives in North Carolina with his wife, three teenagers and two English bulldogs.