Which Payment Gateway to Use for My SAAS Business

Payment gateways address a foundational need for your business, helping you accept online and mobile payments.

Gateways are commonly used by SAAS enterprises to collect recurring revenue and collect payments from customers. A payment token is generated for each customer. Storing tokens in a payment gateway allows you to switch freely among providers as your business’s needs change.

The alternative is a direct integration with a merchant services provider, such as Stripe or Worldpay. Direct integrations mean the provider owns the data. That makes it nearly impossible to complete a data migration and change providers later on. Use a gateway, pay the small gateway fee, and your business will have more control and flexibility.

A SAAS payment gateway makes it easy for your customers to keep up with their payments. Crucially, a gateway also makes it easier for you to easily and reliably collect those funds.

All gateways have similar costs, but differ in specific functionalities, reporting dashboards, and supported providers. Finding the best payment gateway for your company helps you provide a better experience for your customers. It can also help your enterprise save money, reducing the cost of doing business by avoiding excessively high processing rates.

How can you determine which payment gateway to use? We can help. Keep reading to learn more about the best payment gateways for SAAS businesses.

Feeling overwhelmed or unsure when it comes to payment gateways? Do you already know you won’t have the time to dedicate to researching your options in depth?

At Swipesum, we’re software developers, too. We recognize how complex this process can be, and how important it is to get it right. Our independent consultants aren’t beholden to a specific payment gateway provider, or any other service.

We help you identify the best options and negotiate to lower your rates. And we’ll provide our advice at no cost to you. Book your consultation today!

Why SAAS Businesses Need Effective Payment Gateways

Collecting recurring revenue is the backbone of many SAAS companies. It’s right there in the name: software as a service. Your customers can benefit from the ongoing development and support you provide as much as they can from the software itself.

The nature of your business means having a reliable, secure, and convenient option for managing recurring billing is critical. That’s what makes SaaS payment solutions and payment gateways so important for SAAS businesses.

What is a Payment Gateway?

Payment gateways are one of many payment solutions used by modern businesses. They facilitate the collection and secure storage of client payment information. That’s a foundational step in the payment process. In practical, customer-facing terms, the payment gateway is a webpage where customers can enter payment details.

Gateways store recurring payment tokens, which is an especially important point when it comes to SAAS business and recurring revenue. That means you can securely keep customer payment information ready to use. That remains true even if you choose to change your merchant services provider in the future.

The unique features offered by specific gateways, and the cost differences between them, are the two major factors in choosing the best fit for your business. Widely used and popular features to consider as you make your decision include:

• Automatic Level III processing
• Automatic card updating — recurring payments will still process even when the current version of a customer’s card expires
• Quickbooks plugins
• Gateway emulators

Understanding the difference between a payment gateway and a payment processor will help provide a full grasp of online payments. Online payment processing is a crucial aspect of this, as it allows businesses to manage payment collections efficiently without developing their own infrastructure.

Investopedia offers a very concise explanation of both systems. “A payment gateway collects customer card information and encrypts it for later processing. A payment processor uses that information to charge the customers’ bank or credit card provider.”

A payment processor will take the information from your payment gateway. Then, it connects with your merchant account as well as your customer’s bank. That’s the second half of completing the transaction.

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Your SAAS Business Needs a Merchant Account and Payment Gateway

Merchant accounts are more convenient than other options, such as invoicing customers using accounting software like QuickBooks. Having both a merchant account and a SaaS payment solution helps you streamline your operations.

A merchant account from a top provider is the most robust and lowest-cost way to accept payments. Your gateway will help you connect that merchant platform to accounting software, e-commerce platforms, and other software your business licenses.

To directly integrate a merchant account into your software, a gateway offers the easiest path. Gateways also offer added features and increased security.

Ideally, a SaaS company will select both a merchant account and payment gateway as it starts to generate monthly recurring revenue. That makes it as easy as possible to collect and securely store payment information, as well as the payments themselves.

It may be tempting to consider fixed-rate, closed systems. These can seem like convenient options to address your needs related to collecting customer payment information and revenue.

To be clear, big names in this space like Stripe, Square, and Braintree do offer convenience. However, they also force you to pay high fees and lack many useful features commonly found in gateways. Additionally, they ultimately own the payment tokens you generate. That makes it much more difficult to change providers later on.

The best SaaS payment gateways are open to several merchant services companies and offer multi-MID capabilities, so one gateway can manage all of your merchant accounts. That arrangement helps you get the best rates possible. You won’t be boxed in by a closed system and left paying too much simply to complete recurring transactions.

Does Your Software Facilitate ACH or Credit Card Payments on Behalf of Customers?

Here’s an important exception when it comes to the value of payment gateways for SAAS businesses.

If your clients use your SAAS solution to manage money themselves, a payment gateway won’t be the best solution. SaaS payments, which involve recurring billing and subscription management, require a more specialized and effective approach. Integrated payments and payment facilitation are your best bet.

This is an opportunity for merchant services to become a revenue source for your business. When your software also acts as the payments company, there are many ways to monetize the volume of payments running through your software.

Challenges in SaaS Payment Processing

SaaS payment processing can be complex and challenging, especially when it comes to managing recurring automatic payments and handling international payments. These challenges can impact the efficiency and reliability of your billing system, making it crucial to choose the right payment gateway.

Managing Recurring Automatic Payments

Managing recurring automatic payments is a critical aspect of SaaS payment processing. SaaS companies need to ensure that they can handle recurring payments efficiently and effectively, without any disruptions or errors. This includes managing subscription plans, handling payment failures, and providing customers with flexible payment options.

To overcome these challenges, SaaS companies can use a robust payment gateway that supports recurring payments, such as Stripe or Braintree. These payment gateways provide features such as automated payment retries, customizable payment schedules, and real-time payment notifications. By leveraging these features, SaaS businesses can ensure a seamless and reliable payment experience for their customers, reducing the risk of failed payments and improving customer satisfaction.

Handling International Payments

Handling international payments is another significant challenge in SaaS payment processing. SaaS companies need to ensure that they can accept payments from customers in different countries, while also complying with local payment regulations and tax laws.

To overcome these challenges, SaaS companies can use a payment gateway that supports multiple currencies and payment methods, such as PayPal or Stripe. These payment gateways provide features such as currency conversion, international payment processing, and compliance with local payment regulations. By using a payment gateway with robust international support, SaaS companies can expand their customer base globally and provide a smooth payment experience for international customers.

Best SAAS Payment Gateways

As independent payment consultants, we stay up to date on the biggest names in the industry, emerging competitors, and every service provider in between. Subscription management is crucial for automating billing processes, handling subscription fluctuations, and managing customer payment information. When it comes to payment gateways for SAAS companies, we believe these are some of the very best:

Authorize.Net:

Authorize.Net is a longstanding payment gateway under Visa, designed for small to medium-sized businesses needing flexible payment solutions. It supports various payment types and provides key security and compliance features to protect merchants and customers alike. Some of the key features of Authorize.Net include:

• Recurring Payment Support: Authorize.Net offers tools for managing subscriptions, including automated billing, customizable payment intervals, and dunning management. This is useful for merchants aiming to offer subscription-based services.
• Multiple Payment Methods: Supports credit and debit cards, ACH transfers, and even digital wallets like Apple Pay and PayPal, offering flexibility for merchants to provide a seamless customer payment experience.
• International Payment Support: While primarily focused on U.S.-based businesses, Authorize.Net supports international payments, making it possible for merchants to accept various currencies.
• Security and Compliance: Authorize.Net is PCI-DSS compliant and includes advanced security tools like tokenization and encryption, along with an Advanced Fraud Detection Suite (AFDS) for mitigating risks and ensuring compliance.

NMI (Network Merchants, Inc.):

NMI is a payment gateway aggregator providing a white-label solution designed for ISOs, VARs, and SaaS companies looking to offer customized payment processing. Its platform focuses on adaptability and scalability, which is ideal for businesses needing more flexibility and control over payment processing. Key features include:

• Omnichannel Payment Support: NMI supports payments across multiple channels, including online, mobile, and in-store, offering businesses a truly unified solution for payments across various environments.
• Merchant-agnostic: As a fully customizable gateway, NMI allows merchants to work with a range of acquiring banks and processors. This flexibility enables merchants to switch processors or banks without disrupting their payments infrastructure.
• Advanced Security Features: NMI’s security measures include encryption, tokenization, and fraud prevention, as well as tools for monitoring and managing chargebacks.
• White-label Capabilities: NMI’s platform can be white-labeled, allowing SaaS companies and ISOs to brand it as their own, providing a seamless experience for merchants who require a branded payment gateway.

CyberSource

CyberSource, a Visa subsidiary, is a robust payment management platform suitable for enterprises with high-volume transactions and complex payment needs. CyberSource focuses on scalability, international support, and advanced security, making it a preferred option for larger companies and SaaS providers. Key features of CyberSource include:

• Global Payment Processing: Supports 190 countries and over 50 currencies, with multi-currency conversion and cross-border transaction management, which makes it ideal for large businesses with international clientele.
• Fraud Management and Security: CyberSource’s Decision Manager leverages machine learning and over 260 validation tests to detect and manage fraud, along with PCI-DSS compliance, tokenization, and data encryption.
• Integrated eCommerce Solutions: CyberSource integrates seamlessly with eCommerce platforms and offers SDKs for more custom integration, making it adaptable for various business models.
• Comprehensive Analytics and Reporting: Provides detailed transaction analytics, helping businesses make informed decisions through insights into customer behavior, payment success rates, and fraud data.

BridgePay

BridgePay is a flexible payment gateway and processor that offers a range of integration options and a high level of configurability. It supports merchants across various industries and is known for its versatile API, which allows for custom payment solutions. Key features of BridgePay include:

• Flexible Payment Processing: Supports a wide range of payment types, including credit, debit, ACH, and gift cards. Its versatility makes it an appealing choice for merchants requiring a more customized approach.
• Integrated Fraud Prevention Tools: Includes multiple layers of fraud protection, with tools like encryption, tokenization, and PCI-DSS compliance to secure transaction data.
• Seamless API Integrations: BridgePay’s API is adaptable for custom software, allowing integration into most POS systems and eCommerce platforms.
• Multiple Merchant Support: Allows merchants to manage multiple accounts from a single interface, which is helpful for franchises or businesses with multiple locations that need a consolidated payment platform.

Stripe

Stripe is a popular payment gateway that provides a range of features and tools for SaaS companies to manage their payments. Some of the key features of Stripe include:

• Recurring Payment Support: Stripe provides automated payment retries, customizable payment schedules, and real-time payment notifications. These features help SaaS companies manage recurring payments efficiently and reduce the risk of failed payments.
• Multiple Payment Methods: Stripe supports multiple payment methods, including credit cards, debit cards, and bank transfers. This flexibility allows SaaS companies to offer their customers a variety of payment options, improving the overall payment experience.
• International Payment Support: Stripe supports payments in multiple currencies and provides features such as currency conversion and international payment processing. This makes it easier for SaaS companies to accept payments from customers around the world.
• Security and Compliance: Stripe provides robust security and compliance features, including PCI-DSS compliance and encryption. These features ensure that customer payment information is secure and that SaaS companies comply with industry standards.

Braintree

Braintree is another popular payment gateway that provides a range of features and tools for SaaS companies to manage their payments. Some of the key features of Braintree include:

• Recurring Payment Support: Braintree provides automated payment retries, customizable payment schedules, and real-time payment notifications. These features help SaaS companies manage recurring payments efficiently and reduce the risk of failed payments.
• Multiple Payment Methods: Braintree supports multiple payment methods, including credit cards, debit cards, and PayPal. This flexibility allows SaaS companies to offer their customers a variety of payment options, improving the overall payment experience.
• International Payment Support: Braintree supports payments in multiple currencies and provides features such as currency conversion and international payment processing. This makes it easier for SaaS companies to accept payments from customers around the world.
• Security and Compliance: Braintree provides robust security and compliance features, including PCI-DSS compliance and encryption. These features ensure that customer payment information is secure and that SaaS companies comply with industry standards.

In conclusion, SaaS payment processing can be complex and challenging, especially when it comes to managing recurring automatic payments and handling international payments. However, by using a robust payment gateway such as Stripe or Braintree, SaaS companies can overcome these challenges and provide their customers with a seamless payment experience.

Support from the Experts: Better Results with Swipesum

You know that finding the best possible payment gateway for your SAAS company is a top priority. For many business owners and decision-makers, the obstacle to finding that gateway isn't a lack of understanding. It's a lack of available time, resources, and expertise.

Payments are especially complex. Unless you're in the industry yourself, it's all too easy to feel overwhelmed when you start reviewing and comparing options. And, even if you truly want to build a deep understanding of payment gateways, can you find the time to take away from the core needs of your business?

At Swipesum, we're payments experts. Our independent consultants know how to identify your needs and priorities, then find solutions that match them. We're committed to not only connecting you with the best possible service, but eliminating unnecessary fees and saving you money as well.

We'll stay with you throughout the process to provide integration assistance and hands-on implementation support. We'll help monitor the health of your accounts as time goes on, too. Best of all, we deliver this service at no cost to your organization.

Find the very best of the best among many payment gateway options for your business: Book Your Free Consultation!