Nowadays, software as a service is an increasingly popular business model, according to which a company develops a technical solution, hosts it in the cloud, and allows customers who buy subscriptions to use it online.
It is a win-win business model for the market. From the customers’ point of view, this model allows them to access cutting-edge software products without investing time and money in the development and hardware. For SaaS companies, subscriptions are a way of generating revenue, monetising their product, and receiving funds for further development and innovations.
The way customers pay for the SaaS solutions, or billing process, can be referred to as SaaS payment processing.
We’ve listed seven major challenges and concerns of SaaS organisations related to payments, adding some tips on fixing them.
The fact that SaaS companies charge their users on a subscription basis raises a lot of challenges in terms of invoicing and billing. A business has to keep track of which subscription plan each customer is on, when is their due date, what amount to charge them each month, and through which payment method. At scale, it’s impossible to handle it all manually, so the transaction processing solution for SaaS has to provide robust automation features, efficient invoice management tools, and various processing options. It should allow you to send invoices to thousands of recurring customers easily.
The more customers a SaaS business has, the more data it has to keep track of and control. Moreover, it has to analyse the data to uncover opportunities, highlight weaknesses and ensure overall success. In terms of payments, monitoring allows for timely detection of any malfunction in processing, while analytics helps to understand how customers prefer to pay and if you cover their needs well. Taking into account how important analytics is for SaaS companies, many rely on advanced third-party analytics solutions to conveniently generate reports and obtain insights from them.
Most SaaS businesses aim to be omnipresent, and software as a service business model itself is well-suited for this goal. But in order to make it possible, the company has to expand its payment processing capabilities in a way that serves customers across the world best. It means it should let you accept transactions in multiple currencies and display subscription plans with pricing in a customer’s currency. Moreover, every person should be able to pay for a subscription the way they prefer, be it credit card, debit card, mobile wallet, bank transfer, etc. It is a challenging task because you’ll have to ensure the proper billing and invoicing process for each payment method and currency, and maybe even integrate multiple gateways and connect several providers.
We often tell how important security is in payments, but it’s twice as important for subscriptions or recurring transactions. SaaS organisations must not only take care of safe storage of customers data but also use trusted tokenisation solutions to protect their card data used for one-time and recurring transactions. When choosing a payment processing partner for SaaS, security should be your top priority. Take into account if the provider is compliant with Payment Card Industry Data Security Standard, if it uses SSL, encryption, masking, tokenisation, and what measures it takes to secure sensitive information, mitigate risks, and prevent fraud. This way, clients will trust your business and leave their card details soundly.
Software as a service business model’s major challenge is churn rate minimisation. Transaction processing issues may affect it, too. For example, users’ card details can become invalid or expire, resulting in lost sales for you. Luckily, there’s a lot of tools and systems aimed at keeping all your customers with you and streamlining the user experience.
For modern SaaS organisations, customisation is more vital than ever. The needs of your company and your clients differ and evolve. The variety of devices and payment methods available grows. These factors make customisation features indispensable. In terms of payments, you should be able to create a custom payment page with the look, functionality, and fields you need. It also must adapt to users’ location, language, and currency. Moreover, the possibility to create custom security and fraud prevention filters will come in handy. The subscription management software, if you use any, should allow you to create custom plans with individual pricing and features.
SaaS organisations usually use numerous third-party services and providers. For example, they use accounting software, subscription management tools, marketing and sales platforms, and many other apps. That’s why connectivity and integrations are essential. When it comes to payments, a business has to integrate providers’ and gateways’ APIs, and the more partners it has, the harder this job gets. You should also ensure the compatibility of all the APIs you use and update your integrations. Alternatively, an advanced payment platform can do it for you.
Corefy is a robust payment orchestration platform, helping businesses tackle the payment hassles:
All these benefits and many more are available to you at a price lower than the salary of one developer. Request a demo today to see it all with your own eyes.
