Why your software payment processing should be an embedded experience 

Updated on November 30, 2023

When it comes to technology, the user experience is everything. Every interaction is inter-connected within a single website, an app, or software powering a business. Payments are a critical piece within that infrastructure.

Customers don’t usually think about payments until something doesn’t work. Software businesses are starting to realize the payment experience must be a core feature in order to ensure their users’ businesses run smoothly and they can efficiently run their business. Embedding payments within your software makes it easier for your users to securely manage payments and you get the benefit of tailoring the experience for your user base.

Further, with the right Embedded Payments solution, you can grow a new revenue stream while strengthening user retention and revenue per user.

User experience is critical for software companies

With numerous payment software options available for various industry verticals, software companies must set themselves apart. Ensuring that your software is fit for purpose and makes it easy for your users to run their business is table stakes, so the user experience (UX) must be seamless.

No matter what problem your solution addresses, your users expect an intuitive experience. Features such as thoughtful UX design (including clear iconography and navigation), plus a range of APIs that allow integration with your users’ other business systems, contribute to providing an unrivalled UX. And payments are one more piece to the puzzle.

Payments are essential for a seamless UX

Offering payment processing as a feature of your software is an integral part of providing a market-leading UX. Enabling payments functionality within your software allows you to create a more unified user experience. Once payments are embedded, your partner ensures everything runs so smoothly that your users don’t even know they’re there. The entire payments experience becomes part of the functionality of your software.

When it comes to selecting a payments business model, your software platform has a few options: referral partnerships, payment facilitation (PayFac®), and payment facilitation as a service (PayFac-as-a-Service).

Integrated referral partnerships are the simplest path to monetization. Payments become integrated into the software, and you refer new merchants to the payment partner to price, market, sell, service, and manage.

Becoming a PayFac® means that you’ll essentially become a payments company and take on every responsibility your payments partner currently handles. The technology becomes white-labeled, and your payment partnership takes place entirely in the background. There’s typically a team in place to support you with the technology and to keep you apprised of new products and new business opportunities as they arise.

PayFac-as-a-Service is considered the sweet spot for many software companies. It’s the first step towards payment facilitation that includes more responsibility and typically more revenue while your payments partner still handles the burden of underwriting and risk.

What to consider before you implement PayFac-as-a-Service

When you implement the PayFac-as-a-Service model, you work with an embedded payments provider like Payrix to embed payments directly into your software using payments APIs. When your users process payments on your platform, it’s fully white-labeled, and the entire payments experience looks exactly like your software.

However, in the background, your embedded payments provider manages the risk, compliance, and any other administrative tasks and complexities. And because you’ll have an expert team by your side, the in-house resources required to manage PayFac-as-a-Service are typically minimal. You’ll want to consider that you’ll be marketing, selling, servicing, and managing payments for your user base so here are a few key things that your software company should consider to determine if you’re ready to take on PayFac-as-a-Service.  

  • Are you prepared to sell payments?
  • Are you prepared to manage the needs of your subscriber base?
  • Do you have employees that can service payment issues when they arise?
  • Are you prepared to dig into compliance and security to help your users understand the importance?

Get your embedded payments right with Payrix

Implementing the PayFac-as-a-Service model for your payment solution will give your software platform the control and customization it needs to bring your payment operations in-house while your embedded payments provider manages the administrative and compliance burden. Not only can working with Payrix help you deliver a better UX, but offering Embedded Payments provides more functionality, increasing user retention and lifetime value.

If you’re looking for even more information, check out our ebook, A Complete Guide to Embedded Payments. It walks through the three key embedded payment models and what to consider for each. No matter which path you choose, we’ll build a program that suits your software business and your goals.

Payment experiences designed for your software

Unleash powerful Embedded Payments technology that delivers on a better experience.