Monetizing payment processing can be a great decision for your software platform or business, as long as you’re prepared. Learn more about monetizing merchant services.
Monetizing payment processing can be a great decision for your business, as long as you’re prepared. Learn more about monetizing payment processing.
Monetizing payment processing can be as simple as finding the right partner. Experienced consultants can help you monetize and manage payments while you continue to focus on the core business operations.
Owning, managing, and monetizing payments can be an especially lucrative decision for your business. A range of Software-as-a-Service (SaaS) companies can take advantage of this opportunity. Adding a useful, revenue-generating service to your existing platform creates a win-win situation. It benefits your business itself as well as your customers.
However, introducing such a crucial service also requires careful planning and strategy to create the best conditions for success. When clients depend on your payment service, they need a secure, reliable solution and the support to match.
That said, there are effective solutions for providing the level of service your clients expect. Swipesum has the industry knowledge, experience, and connections needed to set up integrated payment systems for your SaaS platform. Crucially, we go beyond only the initial setup. We can help you manage your payments operation going forward as well.
Want to learn how we can help? Set up your free consultation.
Want to learn more about integrated payment processing and payment facilitators (PayFacs)? Keep reading to learn more about the basics of monetizing payment processing.
Payment monetization is the process of generating revenue from payment processing services. By integrating payment processing features into a software platform or application, users can make payments seamlessly, enhancing their overall experience. For software companies, this strategy opens up new revenue streams beyond traditional subscription fees. Monetizing payments not only increases revenue potential but also improves customer retention by offering a more comprehensive service. Additionally, it enhances the user experience, making it more convenient for customers to complete transactions within the platform. This approach can be particularly lucrative for software companies looking to diversify their income and provide added value to their users.
As complex as the payments industry can be, monetizing payment processing is a very straightforward concept. It simply means making money by providing payment processing services.
Working with payment providers can offer various benefits and challenges, including reselling their services and negotiating revenue sharing deals. As Paylosophy points out, monetizing payments helps your business create new revenue streams. This is a valuable opportunity. Monetizing payment processing leverages your existing tech and customer base and adds value for your customers.
Companies that already help clients collect payments through a SaaS platform are in an excellent position to monetize that workflow.
Your organization will need to find a payments provider to work with. In the early stages of the partnership, you’ll decide on buy-rates — the base pricing for those services. Then, your company sets a price point above those buy-rates. The difference between the two is revenue for your company.
Finding the right partner is crucial for success. The solution itself is the most important consideration in payment processing. A SaaS platform has to ensure its payment processing component is just as useful as the rest of its features.
Carefully consider the specific capabilities your business needs, and make sure any potential partner can provide them. Ask for proof of similar projects completed in the past to ensure a partner is suitable. If the solution is effective, you can negotiate the pricing to get it where you need it to be.
The specifics of your SaaS platform and the needs of your customers determine whether integrated payments or becoming (or working with a) PayFac is the best solution.
All SaaS companies can integrate payments and monetize the volume of payments flowing through their software. Integrating payment services within your software can streamline operations and enhance revenue potential.
PayFac is a much more specialized consideration. It’s only relevant for your business if your customers need the option to create an account and accept payments immediately.
If your SaaS platform requires time to set up before beginning full use, you don’t need to worry about working within the PayFac model. Even if that setup period spans just a few days, a standard integrated payments relationship is all that’s needed.
When it comes to pricing payment processing services, software companies have several options to consider. One common approach is to mark up the baseline processing costs, adding a margin to the transaction fee. This margin can be a flat rate or a percentage of the transaction amount, allowing for flexibility based on the company’s pricing model. Another effective strategy is tiered pricing, where the transaction fee decreases as the payment volume increases, incentivizing higher transaction volumes. Additionally, offering discounts for bulk payments or loyalty programs can encourage users to make more payments through the platform, further boosting revenue. By carefully selecting and implementing these pricing strategies, software companies can maximize their earnings from payment processing services.
Payment monetization offers several compelling benefits for software companies. Firstly, it provides an additional revenue stream, significantly increasing the company’s revenue potential. Secondly, it improves customer retention by offering a seamless and integrated payment experience, reducing the likelihood of users switching to alternative platforms. Thirdly, payment monetization enhances the overall user experience, making it more convenient for users to make payments within the platform. This added convenience can lead to higher user satisfaction and loyalty. Finally, by offering a unique value proposition through payment monetization, software companies can differentiate themselves from competitors, standing out in a crowded market and attracting more customers.
When your SaaS platform incorporates payment processing, providing effective support to your users must be a top priority. Integrating bundle payments into your pricing plans can enhance customer retention and attract new customers by showcasing a robust features list.
It’s not a particularly complicated concept. If your clients depend on your software for payment processing, they need and deserve as much uptime as possible. If their payment processing terminal goes down, it’s a critical issue. They’ll expect you to get it back up and running as soon as possible.
The last thing your organization wants is to ruin the overall customer experience with your platform. The added revenue has to be backed up by effective service and support.
Your company almost certainly has the software and industry experience needed to offer, maintain, and update a specialized and useful SaaS platform. Can the same be said about serving as a payment processor?
Don’t be discouraged if the answer is no. Your company hasn’t had to provide that kind of support to its customers in the past. It’s only realistic that a complete system to support users isn’t in place. And there’s an effective and convenient option available for providing support, too.
Swipesum offers complete solutions for both integrated payments and PayFac. We have the internal expertise and experience to effectively, confidently, and fully run your new payments offering for you. Instead of building out an internal payments team, you can leverage our capabilities and knowledge to handle these needs.
That means more time to focus on the center of your business, ensuring customers are satisfied and well-served with the core features of your platform. Your business will still enjoy the revenue that comes from monetizing payment processing. However, it won’t need to build new teams and workflows from scratch, or jeopardize existing or future customer relationships.
At Swipesum, we’re dedicated to our role as provider-agnostic consultants. Because we’re not owned by or in an exclusive partnership with payment processing companies, we put our customers’ needs first.
We develop individualized solutions, taking your company’s unique payment needs into account. We can help you find the best integrated payments partner, come out on top in negotiations, and manage your payments operation moving forward.
Want to learn more about monetizing payment processing for your SaaS company? Set up your free consultation today!
Consider a software company that processes 1 million transactions per year, with an average ticket price of $100 per transaction. By implementing a payment monetization strategy with a 2% transaction fee, the company can generate $2 million in revenue annually. If the company decides to mark up the transaction fee by an additional 1%, it can earn an extra $200,000 per year. This hypothetical case study demonstrates the significant revenue potential of payment monetization, even with a modest margin. It highlights how software companies can leverage payment processing to create substantial new income streams, contributing to overall business growth and profitability.
To successfully monetize payments, software companies should follow several best practices. Firstly, choosing a payment provider that offers competitive pricing and flexible payment options is crucial. This ensures that the company can offer attractive rates to its users while maintaining profitability. Secondly, it’s essential to ensure that the payment processing system is secure, reliable, and compliant with industry regulations, protecting both the company and its users. Thirdly, offering transparent pricing and clear payment terms helps build trust with users, avoiding any hidden fees or surprises. Finally, continuously monitoring and optimizing the payment monetization strategy is key to maximizing revenue potential. By adjusting pricing and payment options as needed, software companies can stay competitive and responsive to market demands.
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Michael Seaman
Michael Seaman is the co-founder and CEO of Swipesum. A veteran of the payments industry and former employee at one of the largest payments companies, Michael, along with his brother Stephen, has led Swipesum since its inception in 2016. Swipesum is committed to providing innovative payment solutions and exceptional service to its diverse clientele. In his free time, Michael enjoys traveling with his wife Kelsey and their three children, pole vaulting, and engaging in typical Midwestern dad activities.
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