Innovative Software Companies are Integrating Payments
As a vertical software company that serves business focussed customers, you play a big part in how your customers serve their customers, and part of that is allowing them to accept payments through your software. Your platform needs to make accepting these payments easy and straightforward, for both your customers (the businesses using your software platform) and their customers (the end consumer).
For example, if your software is designed for field services companies to manage their work, from quotes and scheduling through to invoicing and payment, integrating payments into your platform makes life easier for both the companies that use your software (the field services companies) and their customers who are paying for services through the platform. Integrated payments creates a seamless, white-labeled experience for the onboarding of your customers; allowing them to start accepting payments faster, and often with lower fees. The payment experience is also better for customers, as they’re not required to pay through a 3rd party website.
The smartest software companies know that payments processing is a great opportunity to generate revenue. Revenue from software fees is finite. Especially if you are focused on a specific vertical. To continue growing revenue, you either need to diversify and offer more features, or you can offer the power of payments through your platform and take a piece of every transaction conducted through it.
Shopify is one of the best examples of this. They started as an ecommerce platform that charged monthly fees, but their Shop Pay product (that allows their customers to process payments from the online stores) is now their biggest stream of revenue.
Integrated Payments are the Best Way to Diversify SaaS Revenue
We wrote a blog post last year that looked at how much revenue software companies leave on the table if they don’t integrate payments into their platform. You can only grow your subscription revenue so much, especially if you serve a limited vertical (and a lot of SaaS companies do these days). Once you have hit max market share in your vertical, the best place to grow is in owning payments processing and the profit that comes from them.
Building Payments Infrastructure is Hard and Expensive
It’s pretty clear that integrating payments into your software platform is a smart choice, but it can also be intimidating. Payments infrastructure is not easy to build due to the slew of regulatory and fraud protection technologies needed, as well as the customer experience factor influenced heavily by the quality of payments technology. Some large software companies (think Uber) have chosen to build their own infrastructure, but this kind of venture requires hundreds of engineers and millions of dollars to build.
The great news is that you can integrate payments and get in on the profit center by allowing your customers to accept payments on your platform by partnering with a payments infrastructure company like Finix. It’s a much lower lift than building technology in-house and you’ll be up and running much faster.
The Gross Payments Volume Threshold is Lower than you Might Think
So, do you have to be processing billions of dollars in payments before you can access the profit center that is integrated payments? Nope.
There was a time when Finix didn’t think it was feasible for a company processing less than $50 million in Gross Payment Volume (GPV), but we’re happy to report that we were wrong about that. That’s because you don’t actually have to become a Payment Facilitator to start reaping the benefits of integrated payments. Instead, you can work with a payments infrastructure company that will allow you to own more of the payments experience and revenue, while avoiding the work and cost that comes with building your own infrastructure and getting certified as a PayFac.
How do you choose a payments infrastructure company to partner with?
Now that you know that you don’t have to build payments infrastructure in-house, how do you know which partner is right for you? There are a lot of factors to consider, which is why we put together a guide to help you find the right partner. Download the free guide and get on the path to payments ownership today.