How to create your embedded payments experience the right way
As software companies continue to offer more seamless and integrated payment experiences, the need for Embedded Payments has become more crucial than ever. While plug-and-play options may seem like an easy solution, they often fall short of delivering the tailored experience that merchants are looking for. As a result, software companies are seeking ways to implement Embedded Payment solutions that meet not only their unique needs but also those of their customers.
This article outlines the key factors that software companies should consider when evaluating the best way to implement an Embedded Payment solution. It highlights how true payment partners stand out in the market by providing a comprehensive suite of embedded payment features that can be tailored to meet the unique needs of software companies and their customers.
Plug and play vs “solutioning” your Embedded Payments
There are a range of Embedded Payment solutions on the market, ranging from plug and play to options that allow for full customization ensuring that you’re in control of the entire experience. The option you choose impacts the experience your customers will have.
If your solution is plug-and-play with limited customization, it might be fast to implement, but it may not address all of your and your customer’s payment needs. In contrast, “solutioning” your embedded payments solution means that you’ll work with a provider who guides you through the entire process and helps you build a payment experience unique to your software and your customers. You’ll gain access to valuable features and functionality that drive revenue growth and delight your customers. Below is a summary of the differences between plug-and-play and customizable Embedded Payments solutions.
Plug-and-play Embedded Payments solutions
- Integration with your SaaS platform
- Standardized revenue structures through set processing fees
- Bring onboarding and payments processes in platform
Customizable Embedded Payments solutions
- Intuitive integration with your SaaS platform
- White-labeling available
- Control over pricing
- Fast and efficient onboarding
- Enhanced reporting capabilities
- Reduced customer service issues
With customizable Embedded Payments solutions, your software company is in the position to further own the customer experience and continue growing by taking ownership of the pricing allowing you to sell additional features and funtionality. For instance, by choosing the right Embedded Payments solution, you can increase revenue per user by 2-5x. From here, further opportunities, such as the ability to offer other embedded finance products (lending, banking as a service, etc), provide additional avenues for growth that many software companies are already considering or have started.
Your Embedded Payments solution provides the clearest line of sight to payments revenue
Today’s software platforms have numerous revenue streams, including licensing, subscriptions, metered use, free trials, and freemium offers. Having visibility over how these revenue streams convert from trial or freemium offers into the company’s premium offerings is critical to understanding the customer journey. When you layer on payments revenue and any other embedded finance offerings, it’s important to have insight into which streams are impacting the customer experience.
Implementing an Embedded Payments solution that provides full visibility and control over customer onboarding and payment processes gives your software access to the clearest line of sight to payments revenue.
With this level of insight, you get key data points that software companies need to continually monitor and improve to remain competitive and grow. At a minimum, your Embedded Payments partner should have the functionality to provide a dashboard with real-time insights into the following:
- Monthly recurring revenue (MRR): Tracking MRR provides a guide to influence the company’s strategy and product development direction. Whether MRR is growing consistently or it’s recently experienced a downturn, continually tracking this data point provides an important high-level signal for company performance.
- Average revenue per account (APRA): It’s also important to drill down into the data points that make up MRR, and APRA is a key metric that software platforms must monitor. The performance of this metric can also drive new strategies and ideas to increase revenue per user and lower the cost of customer acquisition.
With an Embedded Payments solution that provides real-time updates, software companies can track what brings value, streamline onboarding and account activation processes, and lead to quantifiable retention and renewal insights. These insights can provide a competitive edge, allowing software companies to promptly address churn and customer acquisition issues. And with noncash transactions growing at a compound annual growth rate (CAGR) of 13% in developed markets and a projected CAGR of 15% up to 2026, capturing some of this growth through ensuring your Embedded Payments solution is fit for purpose is critical.
Experience the Payrix difference on your platform
Embedded Payments are a game changer for software companies looking to gain more control and visibility over their customer onboarding process and payments experience. But not all Embedded Payment options are created equal. Your chosen Embedded Payments provider should view your engagement as a partnership and work together to make all parties successful. That’s the Payrix difference. Whether your company is interested in PayFac®-as-a-service or becoming a full PayFac®, Payrix is a true partner throughout your entire payments journey. Our team of payments experts work closely with software companies to not only generate revenue from payments but make it a central part of assessing and improving the company’s top-line revenue through continually improving the customer experience. Book a demo today to see how Payrix’s Embedded Payments solutions will create more value for your business and its customers.