Henry Helgeson is an entrepreneur, investor, and CEO of BlueSnap, a global payment orchestration platform for B2B and B2C businesses.
In today’s tough private markets environment, many private equity and venture capital investors are no longer able to rely on buy-and-hold strategies or basic financial tweaks to boost growth and deliver returns. I believe private markets investors today need to take a hands-on approach to drive operational and financial improvements and uncover new revenue streams that add value for all shareholders, leading to better and more successful exits down the line.
One promising option being adopted in the software and SaaS space is embedded payments. This is a method of integrating payment processing technologies and capabilities into a software application so that users can complete transactions without leaving the platform. Let’s take a closer look at embedded payments and how your company can get the most from this system.
Use Cases of Embedded Payments In Software Platforms And SaaS Companies
• Monetizing The Core Product: When payments are built into the platform, software providers can monetize transactions that happen naturally within the product environment, such as subscription payments, one-off purchases or usage-based fees. Rather than treating payments as a separate function, these transactions can become an integral part of the business, helping to turn your platform into a consistent revenue stream.
• Improving User Experience: Embedded payments can make it easier for users to complete transactions by eliminating the need to jump between applications or enter payment information multiple times. In my experience, a seamless payment experience can lead to greater customer satisfaction and improved retention rates.
• Unlocking New Revenue Streams: Embedded payments can also create opportunities to generate new revenues while delivering greater value to existing customers. For example, you might charge for advanced features like fraud protection, cross-border payment capabilities and transaction support across multiple or alternative currencies.
• Building Customer Loyalty: I’ve found that when a platform streamlines key business processes like billing, invoicing or payment tracking, it can become essential to users, creating greater “stickiness” that can lead to longer-term customer relationships, higher lifetime value and lower churn.
• Standing Out in A Competitive Market: Finally, embedding payments can help you differentiate your company in a crowded market, such as through unique payment features, better rates or customer-centric workflows.
Best Practices for Implementing Embedded Payments
If you are considering adding embedded payments to your systems, or if you already have these capabilities but want to maximize their impact, here are several best practices I have learned:
• Map out a value prop.
Before you start building an embedded payments capability, be clear on your goals. What strategic problems are you trying to solve? How will payments enhance your platform’s existing features and deliver more value to your customers?
Also, think about what’s in it for your business. Will embedded payments help reduce days sales outstanding (DSO)? Improve cash flow? Cut down on manual work? Your strategy should go beyond just offering payments because your competitors do; it should support the overall growth of your business and deepen customer relationships.
• Optimize for each payment use case.
Think through how your customers actually interact with your platform, especially when a payment is involved. Each use case is a chance to improve the experience. Can you remove a manual step? Automate a use case? Make the payment experience more seamless and intuitive? When you optimize each touchpoint where a payment occurs, it can save time and make your platform stickier and more valuable.
• Align your customer-facing teams.
Payments shouldn’t just live in the product or within your technology team. For embedded payments to succeed, everyone across the organization should be aligned. Train account managers, sales reps and support teams so they can confidently talk about the benefits with customers and prospects. Give employees the tools and incentives they need to bring payments into their everyday conversations. I’ve found that when teams are unified, it leads to faster adoption and stronger results.
• Find the right balance.
Finally, remember that adding payments isn’t just about reducing friction. Yes, you want to make it easy, but not at the expense of security, compliance or profitability. For example, offering one-click payments might sound ideal, but it could expose your platform to fraud or higher processing fees. Be thoughtful about how disputes and chargebacks will be handled. Balance the user experience with the backend mechanics so you don’t end up undermining the value you’re working to create.
At the end of the day, payments are part of the customer journey. By thoughtfully applying embedded payments into your SaaS or software platform company, you can improve customer experiences, solve real pain points and drive measurable growth and usage.
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