Integrated payments have become table stakes for software companies. By enabling payments directly in your software, you can help your users streamline their operations, enhance their experience, and create a new revenue stream for your business. However, navigating the world of integrated payment processing can be tricky. To help you avoid unexpected pitfalls, here are seven things you should know about integrated payment processing.
1. Choosing the Right Payment Partner for You is Key
Your payment partner is an extension of your brand and a key part of your user experience. As a result, choosing the right payment partner is a crucial first step. The truth is, if you choose the wrong payment partner for your business, nothing else on this list will matter.
Look for a partner that:
- Offers the latest payments technology that supports the diverse needs of your user base. This includes enabling multiple payment methods such as credit and debit cards, ACH, and digital wallets such as Apple Pay and Google Pay.
- Works with you to develop a payment strategy that aligns with the goals of your business and supports your growth
- Offers a service model that meets your specific needs
- Prioritizes a smooth and efficient integration process with simplified APIs
- Delivers transparent pricing and clear communication
The right partner will be invested in your success and have a comprehensive understanding and agreement on how payments will be leveraged to achieve your business goals.
Related Content: 7 Questions to Ask When Choosing a Payment Partner
2. Maximize Your Revenue Opportunities
Integrated payments offer multiple monetization strategies, such as revenue sharing, platform fees, and value-added services. By integrating payment processing directly into your software, you can capture a percentage of every transaction that flows through your system, turning payments into a core revenue driver rather than just a feature.
Here are a few ways to maximize revenue from integrated payments:
- Negotiate your Schedule A: Your Schedule A indicates the percentage of revenue shared between you and your payment partner. Make sure that you have a clear understanding of what is and is not included in your revenue share, then monitor your share reports and funds received.
- Implement Feature Differentiation: You can encourage users to adopt your integrated payment solution by tying desirable software features to its use. If customers want specific functionalities, they’ll need to process payments through your system to access them. These could include advanced fraud prevention tools, automatic card updater or level 2 and 3 processing.
- Use a Pricing Strategy to Deter Non-Integrated Payments: To encourage users to utilize your software’s integrated payments, consider dual pricing – meaning a lower cost for your software customers using payments and a higher cost for those that do not. In turn, this will motivate higher adoption of integrated payments meaning higher revenue potential.
Related Content: 5 Ways to Maximize Integrated Payments Revenue
3. Consolidate your Payment Partners:
Having more payment integrations does not always result in a better user experience. Moreover, juggling multiple payment integrations can often be a headache for you and your in-house developers. While you have to support a multi-integration environment, your users are receiving varying levels of service and support from a variety of payment providers.
Not to mention, when working with multiple payment processors, your revenue share often becomes scattered or less profitable. Each processor has their own revenue share agreement, and some may not be offering one at all. Spreading your customers’ transactions over a variety of payment processors typically can hurt your overall payments revenue potential. To alleviate this, designate a preferred payment processor. This will streamline the customer experience and simplify tracking your revenue share.
4. Ensure Security and Compliance
Handling payments means handling incredibly sensitive data. Your payment partner should help to ensure both you and your customers either become or remain PCI compliant. Your payment partner should also offer advanced security features such as tokenization, encryption, and fraud detection.
Fraud remains a persistent and evolving threat in the payments. Without advanced security practices, your software becomes vulnerable to attacks that can compromise sensitive payment data leading to chargebacks, financial losses, and reputational damage. PCI DSS requirements such as encrypting cardholder data, implementing multi-factor authentication, and regularly testing security systems, are specifically designed to mitigate these risks and keep fraudsters away.
Related content: PCI 4.0.1: What Every Business Needs to Know
5. Instant Onboarding is Over-Emphasized
Offering “instant onboarding” shouldn’t overshadow other critical qualities in a payment partner. Focusing solely on “time-to-revenue” may lead to short-sighted decisions that sacrifice long-term stability and customer satisfaction. Factors like advanced security and fraud prevention, fair and transparent pricing, exceptional service and support, and long-term stability often contribute more to a successful payment experience. Prioritizing these foundational elements over instant onboarding ensures a better user experience.
6. Realize the User Experience is Everything
For software companies with integrated payments, delivering a seamless user experience directly impacts customer satisfaction, conversion rates, and retention. When users can run transactions directly within your software, it leads to fewer abandoned carts and increased conversion rates. Providing a convenient and flexible experience is a necessity because it reflects on your software as a whole. Some important factors in providing a great user experience include:
- Convenience and efficiency = Faster checkout, no switching platforms
- Payment flexibility = Support all types of payment methods including credit, debit, ACH, digital wallets, recurring payments, etc.
- Efficient issue resolution = Quick action on things like refunds, voided transactions, and chargeback support.
Working with a payment partner that gives users a clunky, frustrating experience can shine a bad light on your software. Avoid this by making sure you are choosing a payment partner with an outstanding reputation and provides Service and support that aligns with your business.
7. Stay Agile and Continuously Innovate
The payments industry is constantly evolving. New technologies, regulations, and customer expectations are emerging all the time. Maintain a close relationship with your payment partner to stay ahead of trends. For software companies, staying ahead means more than just keeping up with trends, it means proactively seeking new opportunities and being ready to adapt at any time.
- Embrace New Technologies: From contactless payments and digital wallets to embedded finance, new technologies are transforming how businesses and consumers make payments. As a result, consider regularly evaluating new payment features that could benefit your users. Early adoption can set your platform apart and attract new customers.
- Monitor Regulatory Changes: Payment regulations are constantly evolving, with updates to PCI DSS, data privacy laws, and anti-fraud requirements. Your payment partner should monitor regulatory developments and assist you in maintaining compliance and minimizing fraud.
- Gather and Act on User Feedback: Your users are the best source of insight into what’s working and what needs improvement. Implement feedback loops such as surveys, usability testing, and analytics, to identify pain points and opportunities for enhancement.
Looking Ahead
Integrated payments serve as a powerful tool for software companies to add value, drive revenue, and deliver an efficient experience to users. By staying on top of these seven aspects of your program, you can turn payment processing from a necessary feature into a strategic advantage.
"*" indicates required fields