Unlock the full potential of embedded payments: 5 key strategic considerations for your software
You might already know that monetizing embedded payments can increase your revenue per customer and make your software-as-a-service (SaaS) product even stickier. When done right, implementing embedded payments can reduce customer acquisition costs (CAC) and increase the average customer’s lifetime value (LTV) among a number of other benefits. Many software companies are primarily looking to enhance the customer experience. The payments revenue is just an additional benefit.
Still, you probably have some questions about the best way to go about your payments strategy. While customer experience and payment revenue are primary business drivers, there are a handful of other important pieces to consider when building an embedded payments strategy. A right payments partner will help you create a strategy around the needs of your business, the customers you serve, and works with you to implement that strategy so that you get the most out of your investment.
1. What outcomes do you want to drive for your business and the merchants who use your software?
Your payments solution should match the experience of your software. Customization and configurablity is critical for creating a frictionless customer experience. Your payments partner should help you design your embedded payment solution around your goals, customer needs and use cases. Understanding the needs of your customers and how they accept payments will affect the experience you build. Have in-depth conversations with a payments partner that takes the needs of your software into account and works closely with you to build an experience that matches the types of customers you serve.
2. What do you want the experience for your merchants to feel like?
When it comes to the merchant experience, it’s essential to create a user-friendly software environment. Your customers are looking for payments to be a frictionless interaction from the moment of signing up for payments all the way through processing. Merchants need to feel confident that they can securely accept payments and have easy access to information about their account. Keeping that entire payment workflow within the software enhances the overall experience. Payments should be intuitive and straightforward to use, with clear instructions and expert support available if needed. Overall, the experience for merchants should be efficient, reliable, and transparent, enabling them to focus on their business while trusting they can seamlessly and effectively manage critical business operations, like payments.
3. What role do you want embedded payments to play within your overall business strategy?
When it comes to payments, the role they play in a business’s overall strategy will depend on the organization’s goals. The key is to have a clear understanding of what your software business is trying to achieve and then work with your embedded payments provider to align your payment strategy with those objectives. Deciding on the order of importance will be an essential conversation to have, as it will help you determine which payment features and functionalities to prioritize. Are you looking to enhance your software to be more competitive? Do you want to focus on the merchant experience and make payments frictionless and efficient? Or are you looking to drive a new revenue stream? Once you have a clear understanding of your goals, you can work with your embedded payments partner to create a payment strategy that supports your overall business strategy and helps you achieve your top priorities.
4. How much are you ready to invest in building embedded payments functionality?
As a SaaS business, you know that development requires both time and resources. There are several embedded payments models and determining how much you’re ready to invest ultimately depends on your business goals and needs. Evalute each model and then decide what you’re ready for. While investing in embedded payments can come with initial costs, the long-term benefits of improved user experience, increased revenue streams, and streamlined operations may make it a worthwhile investment for your business.
5. What kind of support would you like to get from a payments partner?
As you can see, there are a lot of options and variables to consider when it comes to finding the right embedded payments option for your software business. You can try to figure everything out on your own, but it can be extremely helpful and reassuring to work with a partner who will take the time to understand your strategic and financial goals and then propose an embedded payments solution that makes the most sense for your particular software and business goals. The right partner won’t try to convince you to accept a one-size-fits-none solution, but will look for ways to offer an embedded payments solution that’s built around your business needs and objectives.
Bottom line: there is no one-size-fits-all approach to embedded payments. Take the time to consider your strategy and partner carefully to find the embedded payments solution that makes the most sense for you and your business. If you’re ready to explore more around payment faciliation-as-a-service, read through these 5 considerations for software companies.