10 Signs Your SaaS Has Outgrown Its Payment Provider

Payment technology is developing rapidly. According to Finances Online, 82% of Americans use online payments. Because of this, it is more important than ever for SaaS businesses to provide their customers with a wide range of payment capabilities to stay relevant.

As a result, most companies are utilizing SaaS payment solutions. These third-party providers offer essential services for a SaaS business, allowing them to generate revenue.

But what if your payment provider is falling short and holding you back? Is it only giving you the bare minimum or lacking flexibility? Or is it failing to keep up with the changing technological environment when it comes to current payment trends? The wrong payment partner can limit your business’ growth opportunities, so these are questions you must ask.

If you find yourself wondering whether your payment service provider is best serving your needs, we’ve put together the top 10 signs to help you assess whether you’ve outgrown yours and should start looking for a more suitable provider to supercharge growth.

The Lowdown on E-Commerce Payment Support
There are three major types of online solutions that form the business payment infrastructure: payment service providers (PSPs), payment gateways, and merchants of record (MoR).

Understanding the differences between these is key for assessing the needs of your SaaS and whether your current payment process setup is truly working for you.

1. Payment Service Providers

PSPs are third parties that connect merchants with a financial infrastructure. They facilitate credit or debit card payments, bank transfers, and any other form of payment, such as e-wallets. PSPs offer many services, like currency processing, payment security, and transaction reporting.

2. Payment Gateway Providers

Payment gateways act as the middleman between the customer and the merchant. The main focus of the payment gateway provider is processing transactions quickly and securely. This is done through data collection, transferring payment details to the processor, and authorizing payments.

3. Merchant of Record

Merchant of Record is a legal entity authorized and held liable by a financial institution to sell goods or services to the end consumer. Regarded as one of the best payment solutions out there, the MoR is responsible for the entire customer interaction, from when the customer initiates the purchase process until they receive their product.

These business models offer a wide range of services, from local payment methods, managing recurring billing, and processing online transactions to allowing you to provide your customers with multiple subscription plans to improve customer satisfaction and boost monthly revenue.

How To Know if Your SaaS Has Outgrown Its Payment Provider

1. Lack of Customization

Personalization is one of the most important marketing trends right now, with 80% of consumers stating they are more likely to buy from a company that provides a tailored experience. And the same goes for SaaS companies.

Customization is important to ensure that your online payment processing system meets the needs of your customer base. Since your SaaS company is unique, it makes perfect sense that all business customers have specific preferences regarding online payments.

Some SaaS payment processing solutions only offer cookie-cutter payment solutions, which will never be the most effective solution for your business. You need to be able to find out what your market and customers want and then design your payment solution around them. Without a dynamic and flexible payment provider, you’ll be unable to quickly adapt to the unique needs and requirements and should consider changing your provider.

2. Few Updates and Little Innovation

On a very basic level, your payment provider must implement periodic payment platform updates and update their technology regularly to keep up with the fast-paced changes in the industry. If they’re using old, outdated technology, you’ve probably outgrown them.

This kind of software will make the lives of your development team and customers more difficult because it’s tougher to integrate, tougher to update, and harder for your customers to use.

As an example, you want your payment provider’s technology to integrate with a single API so that it’s quick to implement and will be easy for the end user. In addition to that, the features must have the ability to be embedded directly into your own platform.

There is more to transaction processing than payment collection. A lack of updates could also mean compliance issues in the financial landscape since the regulations are changing frequently.

The same is true for the changes and updates with tax requirements worldwide, and you could land heavy fines if your payment provider isn’t keeping up with these changes.

Your payment provider should be staying up to date with developments and consumer trends in the market. In terms of innovation, you want to see your payment provider trying new things and implementing forward-thinking features relevant to the payment journey, especially if you are a SaaS startup.

They should be able to assess the needs of your business and then work to meet them in a timely manner. Accenture found that 62% of high-growth companies plan to invest in technologies that lead to higher rates of innovation. This is the kind of payment provider you should be looking for, integrated payment solutions, constantly improving their systems to ensure your business is up to date with any changes within the payment industry.

3. Poor Integration

Good integration leads to smooth processes in payments. One red flag often seen is when your service provider is using a tech stack with multiple providers without organization and cohesiveness. They should fit in seamlessly with your tech stack. This is particularly important regarding your data, which should not be siloed and always be well integrated with your ERP, CRM, or PIM.

Integration of payment processes also has a direct impact on your software development team. They shouldn’t have to deal with unnecessary amounts of work trying to integrate the payment software with your eCommerce platform. This could affect the workload on your operations over the long term and threaten the success of your business.

You also want to ensure your payment provider has a Software Development Kit (SDK). This is a set of software tools and programs documented by the provider that developers can use to build applications for specific platforms. SDKs help developers offer seamless integration of their apps with the payment provider’s services.

4. Payment Options Are Limited

Today, customers want a diverse range of options when making payments that are seamless and frictionless. Gone are the days when just credit card payments would suffice. The more diverse your payment method offer is, the better. Modern payment methods include cryptocurrency, digital/mobile wallets, direct debits, and prepaid vouchers.

Alternative payment methods add value to the experience that customers have with your business, and offering these will lead to more sales and higher conversions. Unfortunately, your customers may well migrate to other businesses if they can’t access the payment options they want to use.

It’s important to remember that customer payment preferences differ across countries and regions. For example, MasterCard, Visa, and American Express are the top three payment methods in the US. WePay and Alipay are very popular in China, while Germany prefers Giropay, SEPA Direct Debit, SOFORT, and PayPal payments.

This serves as an important reminder of how important it is that your payment provider offers a range of payment methods suited to your customer base. Check out our piece on payment trends for a list of the latest innovative ideas in payments to look out for.

If your payment provider doesn’t make it possible for you to offer multiple, up-to-date methods of paying, you’ve outgrown them.

Learn 6 more signs your SaaS has outgrown its payment provider and what to look for in a credible payment provider on PayPro Global’s blog.