Payment Facilitation: Software’s Holy Grail

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Bob Butler, Chief Commercial Officer, Payrix

The payments industry has generated significant noise lately, but the reality is that 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 unnecessarily complicated for companies processing transactions, and a difficult path for those wanting to fully harness payments’ possibilities. And while the industry’s favorite buzzwords of payment facilitation paint a golden picture for monetization potential among clients with high payments aptitude and high-risk appetite, they paint an incomplete picture of payments’ future potential.

To be clear — monetizing payments is critical for the growth and success of the next crop of SaaS companies. But so few of those on the cusp of becoming the next Shopify, GoFundMe, or MindBody employ a payments professional, let alone a full payments risk and compliance team. The tip of the spear for these companies is the promise of payment revenue 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 a software company becoming a payments company yet leave their clients only halfway to the promised land: stuck with the heavy lift of full integration, risk, boarding and compliance.

How do tech businesses navigate 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 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 a difficult journey — filled with due diligence, card brand registrations, tech development, certifications and more. Conversely, payment facilitation as a service via a partner simplifies a software platform’s route to accepting payments through a facilitator’s master merchant account. This model ensures that the platform is up and running quickly and relies on their payments partner to do the heavy lifting of technology maintenance, risk and compliance.

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 to find the sweet spot between partner and 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 while maximizing top-line revenue. But many software companies would be best served by a payment facilitator-like solution that provides control over their brand’s payment experience, full visibility and insights into transactions, seamless boarding, and revenue without the risk and compliance. Payrix is the only fully-progressive payment facilitation solution. Our flexible platform empowers vertical software businesses to control the payment process and optimize revenue for maximum growth, whether customers are all-in on payment facilitation, or better suited for a payment facilitation as a service solution. 

Chief Executive Officer of Payrix, Eric Frazier is a decades-long payments and software industry expert who saw the shift toward payment facilitation and made the move to Payrix in 2020.

“Having seen a number of managed payfac and payfac infrastructure solutions, it was clear that Payrix’s solution offered its clients an unparalleled opportunity by transforming payments from a cost center to a profit center in order to increase overall company value. The Payrix solution disrupts traditional payments systems, streamlining key processes, while addressing the heavy lifting of critical risk and compliance issues. When combined with overall market excitement in the fintech space, I am thrilled to be leading the Payrix team as we accelerate as a global embedded fintech leader.” – Eric Frazier, Payrix CEO

Payrix’s flexibility and level of control is ultimately what attracts category-leading software clients like Real Green Systems, Storable and ResMan to us. Our customers specialize in industry-best software solutions and CRM suites for verticals like childcare, non-profit, health and wellness, field service, religious and community-based, accounting and more. Across the spectrum of specialization, our customers are able to fine-tune and customize their owned payments experience in a way that elevates their customers’ experience and furthers their brand’s goals. Most importantly, they see significant, needle-moving payments revenues from the moment they implement and begin processing through Payrix. In fact, our customers are modeling 5-year topline revenue growth that reaches upwards of 1600% from payments alone. That type of growth secures new headcount, enables innovation and significantly increases total enterprise value.  And it’s why I believe that 2021’s most successful software companies will thrive when they’re powered by payments. 

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