Payments Will Be Software’s Holy Grail
Why the most successful SaaS companies will grow on the back of payments
Getting Real About Payment Facilitation
The payments industry has been generating significant noise lately, but the reality is the space is still largely occupied by legacy players who are consolidating and giving the appearance of innovation without actually changing the game for their clients. Without new solutions, payments will remain an unnecessarily complicated utility for companies processing transactions. And while the industry’s favourite buzzwords of payment facilitation paint a golden picture for monetization potential among clients with high payments aptitude and an appetite for risk, they paint an incomplete picture of payment’s future potential.
To be clear – monetizing payments is a critical ingredient for the growth and success of the SaaS companies and digital marketplaces. But so few of those on the cusp of becoming the next Shopify, or GoFundMe, or Mindbody employ a payments professional let alone a full staff for payments risk and compliance. The tip of the spear for these is the promise of revenues from payments and a solution that is more tech-focused – a payments software as a service. But that’s not enough. Too many emerging players sell the idea of the software company becoming a payments company and leave their clients halfway to the promise-land: stuck with the cumbersome responsibility of full integration, risk boarding and compliance.
So how do tech businesses navigate around this? Let’s first start by clearly defining the newest models in the payments space – from payment partners to payment facilitation. I’ll start with the hot topic at hand, payment facilitation. When software companies are sold the idea of becoming a payments company, they’re buying into becoming a payment facilitator. In short, this makes the software a master merchant account provider who through a contract with an acquiring bank can board sub-merchants and facilitate payment transactions for them. That payment facilitator has ultimate ownership of their payments contracts, not just pricing but all associated risk. Beyond the basics of what it is, the path to facilitation can be an arduous journey – filled with due diligence, card brand registrations, tech development, certifications, and more. Conversely, integrated payments via a partner are a software platform’s simplified route to accepting payments through a facilitator’s master merchant account. With this, a platform is up and running quickly and relies on the payments partner to do the heavy lifting of technology maintenance, risk and compliance. With Payrix’s acquisition of Integrapay in Australia, both options can be provided and scaled to support customers maturing payment needs.
Building Total Enterprise Value
Having spent the past two decades working in payments I’m excited by the real promise of what payments revenue can bring to software companies’ total enterprise value. The key is finding the sweet spot between partner to payment facilitator for each SaaS provider. When I joined Payrix I saw that gap in the market that could balance the simplicity and convenience of a click-to-apply partnership with the flexible and dynamic nature of a fully-owned payments experience. Payment facilitation is a huge opportunity that allows software companies to take control of their payments experience as a part of their integrated software offering and maximize top-line revenue, however, many providers prefer to mature to this destination through an aligned payments partner.
Payrix is the only fully progressive payment facilitation solution. Our flexible platform is designed to empower tech-led businesses to control the payment experience and optimize revenue for maximum growth, whether customers are all-in on payment facilitation or better suited for a payment facilitation-like solution such as the Integrapay model.
As more vertical SaaS providers turn to embedded commerce to innovate their product, increase lifetime client value and build enterprise value Payrix’s continued laser focus on client success resulted in the company joining forces with Integrapay in October 2020.
“We’ve listened to our clients and many have exciting plans to expand globally – it became clear we needed to eliminate obstacles that were holding them back,” said Payrix CEO, Eric Frazier. “We believe our market-leading technology, customer-centricity and local presence will deliver the seamless user experience and growth results our clients need to scale smart.”
Payrix enables software companies to jump-start a high-growth payments business, as well as those ready – to fully seize the embedded payments opportunity as a payment facilitator. Payrix’s out-of-the box, full production platform is seamlessly layered into a client’s platform, mobile app or marketplace. This creates a world-class customer experience and allows clients to tap into additional revenue streams that accelerate growth.
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