By: Rob Nathan, EVP, Integrated Solutions at CardConnect
With thousands of new startups emerging everyday and the average turnover rate for business applications trending at 39% annually, the SaaS industry couldn’t be more competitive. Despite the hyper competition, many SaaS providers take their organization’s payment processing experience for granted.
Whether we want to admit it or not, payments can play a big and often unseen role in contributing to or reducing customer churn. In this article, we’ll take a look at some of the common payments obstacles faced by SaaS companies today and how they can be resolved.
Creating seamless customer experiences
It is important to tailor the payment process to meet a customer’s expectations, taking into account all aspects of their journey. From a customer’s perspective, clunky user interfaces or a lack of convenient payment options is frustrating. Consider the diversity across the customer base, from the range of devices at their disposal to the availability of varying payment methods in their location. Offering a wider choice of payment options, such as allowing users to add multiple credit cards when subscribing (also reducing the potential for failed transactions) or ACH/Direct Debit transfers, also creates a frictionless experience for the end user which will help customer retention in the long-term.
Poor cashflow and failed transaction monitoring
In the SaaS industry, one barrier to reliable cashflow is the number of unsuccessful transactions a company attempts to process, which can cost time and money to resolve. When trying to grow a SaaS organization at scale, the idea of manually checking every single transaction in a spreadsheet is impractical. The best solution is to implement a robust payment processing platform which provides a complete overview of all your transactions and allows for easy identification of any failed transactions which may have taken place.
Making payments accessible overseas
A 2017 U.S. consumer study found that credit and debit cards were increasing in popularity for all online purchases, occupying 76% of U.S. purchases made. By contrast, only 12% of online purchasers in Germany stated that a debit or credit card was their preferred payment method, with customers opting for alternatives such as invoices or PayPal. The importance of understanding local preferences but also offering a range of currency options for SaaS payments in a secure manner is vital.
Securing payments
Ensuring online payment processing is secure and encrypted should be a top priority for any organization. Leading payment processors use PCI-certified Point-to-Point Encryption (P2PE) and patented tokenization to replace sensitive information in every transaction. This provides peace of mind for end users and businesses alike, bringing a level of confidence to the payment process and removing the risk of sensitive information being lost or stolen.
Reducing Churn
Although it varies from company to company, the average churn rate for a SaaS organization is between five and ten percent. The main problem from a payment perspective is involuntary churn, where customers are lost because card details have expired or the payment process fails.
Considering the higher cost of acquiring new customers for SaaS businesses compared to keeping existing ones, creating a payment process which reduces the likelihood of losing existing customers is extremely beneficial. By tailoring the user experience, in addition to adopting a platform which is both secure and easily manages the payment process, SaaS organizations can mitigate any risk and provide customers with a simple way of making payments.
Maximizing Integrations
When a startup is in its infancy, a founder may not be able to forecast exactly where the business will be in a year’s time. When it comes to payment processing, it is vital to keep options open and explore the possibilities for the future growth and size of the business.
Choosing a solution which integrates seamlessly with third-party applications will be hugely beneficial as the organization grows. Whether it is useful add-ons like analytics tools or integrating accounting software to simplify the day-to-day running of a business.
How to overcome SaaS payment obstacles
When it comes to payments, the obstacles – particularly in the SaaS industry – mean the process is always likely to be somewhat complex.
The best way to overcome the challenges is by choosing a trusted payment processing provider with cutting-edge security, straightforward solutions, and compatibility with third-party apps. An ideal way forward is with a payment processing solution that will integrate and grow with your organization.
CardConnect works with software companies of all sizes to create a streamlined customer experience through integrated payments. To find out more about their ISV program, click here.
The post 6 Payment Acceptance Obstacles SaaS Companies Face and How to Avoid Them appeared first on SaaStr.
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