PayFac payment platforms continue to emerge, thanks to growing popularity of payment facilitator model. At the same time, SaaS platforms remain among the top candidates for becoming PayFacs. Many software platforms are facing the need to incorporate payments into their core offerings. If you are providing a software service platform to a large billing company or a network of fitness centers, integrating payments into the software would make end user’s experience smoother. No company wants its customers to be distracted by a redirect to some off-site payment gateway or processor right before they are about to make a purchase. That is why smooth payment management makes a difference, in terms of both experience and revenues.
Integrated Payment Experience for SaaS Platforms: Why’s and How’s
Why should a SaaS company incorporate payment experience into its platform? The key reasons are as follows.
- Integrated payment experience makes payment handling truly seamless.
- Payment handling is a source of extra income (in addition to the core SaaS offering).
- SaaS platform, incorporating payment experience, becomes more robust, attractive, and competitive.
- Implementation of payment functionality opens the horizons for new, extended partnerships.
SaaS platforms can follow one of the two conceptual options on their quest to smooth payment experience. If you are a SaaS company, you can either look for a payment gateway to handle payments, or become a PayFac yourself. To remind: a PayFac is authorized to underwrite merchants under a unified master merchant account and handle all merchant lifecycle-related functions for them.
Gateway Features SaaS and PayFac Payment Platforms Should Look At
Essentially, a gateway is an entity that smoothly and securely handles payments for platforms, both SaaS and PayFac. In order to accomplish this task, it needs to support a variety of features at a reasonable price (offer value-for-money).
Let us revise our previously published lists of basic and advanced gateway selection criteria. And let us try to take present-day realities and the specificity of SaaS and PayFac business models into consideration.
- Gateway fees. Indeed, transaction processing cost remains the key criterion companies look at when choosing a gateway. Be careful to check what you are actually paying for and what you are getting. You might want to take a look at our cost reduction guidelines.
- Ease of integration. What does it take to integrate your SaaS platform with this or that gateway solution?
- Smooth transaction settlement mechanisms.
- Support for your target payment types, geographies, currencies, and MCC codes. In addition to traditional card-present and CNP transactions, many present-day platforms need support for mobile and in-app payments.
- Fraud protection mechanisms. These should cover both consumer and merchant fraud. In addition to 3D-secure, AVS, P2PE, IP address and geolocation verification, the gateway should check velocity and other patterns of consumer and merchant behavior/activity.
- Transparent reporting API.
- Chargeback handling and disputing logic.
- Deduction of convenience fees and taxes. This is a tricky one, especially when international transactions are involved.
- Recurring billing and account updater logic. Many SaaS companies are subscription-based ones, so this feature is especially relevant for them.
- Card intelligence, using BIN files and other means. Elicitation of customer behavior patterns is an essential step towards devising your agile pricing strategy.
- Support for smooth merchant onboarding and provisioning. This feature concerns both PayFac payment platforms and SaaS companies that want to become ones.
- Support for several target processing platforms. If you are a PayFac, then a single processor might be unable to handle all your target MCC codes and payment types. That is why, partnership with multiple processors is an essential feature your gateway provider should have.
If you are a SaaS company, rather sooner than later, you might have to incorporate payment experience into your core product in some form. You can partner with a payment gateway provider, offering you a feature-rich robust solution. Or you can become a full-fledged or white-label PayFac. In the latter case you should opt for a PayFac payment gateway. That is, you will choose among gateway solutions, intended for PayFac payment platforms (such as UniPay Gateway, featuring a special payment facilitator program).
UniPay Gateway users include many SaaS companies and PayFacs. So, if you are a SaaS or a PayFac Payment Platform owner in search of a gateway solution, feel free to consult our payment experts. They will definitely have a targeted advice for you.