Recurring billing solutions can help your SaaS business save up to 40 hours of accounting work per month and recover 2-4% of revenue leakage, while also making it easier and more convenient for customers to pay their subscription dues.
However, you can streamline your subscription billing system even more by implementing an integrated payment gateway, which offers substantial benefits over the other common option: hosted gateways.
- With a hosted gateway, your customers will be redirected from your website to a third-party platform such as PayPal to make their payment, then redirected back to your website.
- On the other hand, with an integrated payment gateway, your customers will stay right there on your branded website throughout the entire shopping and payment process.
This not only makes things easier for your finance team but also improves your customers’ user experience. And, of course, happy customers are more likely to stick around and spread the word about your business, leading to even more customers.
Let’s begin by exploring these benefits in greater depth.
Internal benefits of an integrated payment gateway
Here’s how an integrated payment processing system can benefit your SaaS business:
Month-end-close can be a time-consuming and tedious process. But, with an integrated payment gateway handling your SaaS billing and recurring payments, it becomes a bit easier. An integrated gateway can help reduce the need to track down late or failed payments, make collection calls, and so forth.
CEO of Iris CRM and CRMDialer Dimitri Akhrin notes, “You’ll have at least one person less to hire in your administration/accounting department since chasing overdue invoices can turn into a full-time job.”
Or, if you’ve already got a fully staffed finance department, you can reallocate team members’ hours from billing grunt work to higher level, more strategic projects that foster business growth.
Now that’s a serious efficiency upgrade!
Earns and saves more money
An integrated payment system removes friction from the sales funnel and can help you stand out from competitors, which in turn can lead to more sales. This is especially useful if your business leverages a bottom-up sales strategy.
The fewer steps there are for a customer to make a purchase, the more likely they are to convert. When the customer isn’t redirected to a third-party site, it’s easier to add on extra services or otherwise increase the dollar amount of their purchase.
And, if you have one less accounting salary to pay as Akhrin suggests, that’s more money on your bottom line.
An integrated payment system also reduces the chances of failed payments and other inconveniences that might cause customers to voluntarily churn. Furthermore, expired credit cards can often be updated automatically with information from the customer’s bank with no action necessary from either you or the customer, helping minimize involuntary churn.
The enhanced security features of an integrated payment platform can help significantly lower fraud and risk levels. This serves to reassure customers—more on this later—but it also helps reduce chargebacks which in turn saves you time and money. Credit card fraud rose 44.7% from 2019 to 2020, and data security is top-of-mind for customers.
If a customer perceives—either mistakenly or legitimately—that they have been charged fraudulently, they can open a dispute with their financial institution. The money in question will then be pulled from your account and you’ll be slapped with a chargeback fee, which can really add up.
But a subscription management software with an integrated payment platform helps mitigate this possibility by proactively searching for fraudsters, implementing strict payment standards, providing explicit invoices, automating the billing and invoicing process to reduce manual errors, and expediently flagging disputed charges so they can be handled.
As a smart business leader, you know that data-driven decisions are key to business growth and overall success. Naturally, in order to make these types of decisions, you need a wealth of accurate, actionable data.
With a hosted payment gateway, customers leave your site entirely to complete their payment, which means that you lose the ability to collect real-time data. Although a third-party payment service provider may send you data periodically to help you assess problems in the payment process, it generally won’t be in real-time, nor will it be comprehensive.
When your payment gateway is baked into your SaaS billing software, you can track data throughout the entire payment process in real-time and have access to detailed reports. These can be used to identify issues and friction points in the payment process and to inform your future marketing campaigns.
All your data and reports will live in one place and be drawn from a single source—there’s no need to painstakingly compile data from your SaaS billing software as well as from your payment processing provider.
This not only saves time but also prevents manual errors–which can cause your business to leak a considerable amount of revenue.
Seamless product support
Some recurring billing software offer a baked-in integrated gateway solution—and when your payment gateway and billing software are one and the same, you know exactly who to call for backend tech support no matter what the issue is and where it occurred.
Customer-facing benefits of an integrated payment gateway
Now that automated billing has largely become the standard for subscription-based SaaS businesses, the focus has shifted to user experience in order to win and retain customers. Here’s how payment integration can improve your UX and benefit customers:
Streamlines the payment process
The vast majority of customers prize efficiency and speed, which you can deliver with an integrated payment gateway. Your customers can input all of their data once on a single page, save it for later use, and not have to wait for a third-party payment processing provider’s page to load.
Chelsea White of CardConnect says, “A seamless payments experience […] can have a strong influence on increasing both sales and customer satisfaction.”
Especially in the crowded SaaS niche, it’s the small things that make the difference between a loyal customer and one who churns. For example, if you and your competitors offer similarly priced and comparable products but your competitor has an easier and more streamlined payment experience, you could easily be losing customers to them.
Instead, make your simple and efficient integrated payment experience just one more thing that your customers love about your SaaS business.
Increases trustworthiness and security
Many customers are understandably concerned about data breaches and payment security. An integrated payment gateway allows you to increase both perceived trustworthiness as well as actual security.
While third-party payment platforms are generally safe and secure, most customers are reassured when they can stay on your website and make their payment directly on your branded page without their sensitive payment details being handed over to another platform. So much so, in fact, that a recent poll indicated that nearly 80% of over 1,700 business leaders either already use an integrated payment system or are in the process of switching to one.
You can earn this feeling of trust by investing in an integrated payment gateway that uses robust security measures to keep your customers’ data safe, such as point-to-point encryption, tokenization, and so forth. Plus, since you’ve reduced fraud as mentioned above, you won’t have to worry about customers churning as a result of being defrauded by bad actors on your site.
Simplify your SaaS billing with integrated payments
The simplest way to integrate your payment processing with your SaaS billing software is to choose a platform that offers both.
Integrating payment processing with your subscription management and recurring billing platform can have a huge positive impact on your SaaS business, both in terms of improving the user experience for your customers and creating a more efficient internal workflow for your accounting team. It can help your business stand out in a crowded niche as well as save you time and money—that’s a win-win if I’ve ever seen one!