Overcoming These Obstacles will Improve Payment Adoption in Your Software
You would be hard pressed to find a company whose top focus is not related to revenue. Whether that is revenue through customer acquisition, retention, or lifetime value growth, most businesses pay very close attention to their revenue numbers.
For software providers, a payment integration can bring a significant source of recurring revenue as every transaction processed in their platform makes a direct deposit to the bottom line. The operative words in that statement are “can bring.” The key to that revenue source is customer adoption. Too often ISVs go through the time and effort to integrate payments in their platforms; often integrating multiple payment partners, only to be disappointed with lackluster customer adoption.
If you are below 50 percent customer adoption of your integrated payments program, please continue to read this article to learn how to improve payment adoption in your software. We reveal actionable tips to help you avoid or remove the most common barriers so you can realize the boost in payment revenue you desire. Read on!
Obstacle: Misalignment with your customers’ needs
Sometimes payment integrations enable basic credit and debit card payment processing while overlooking things like digital wallets, tokenization, ACH, and Level II and III processing. Vertically focused software providers must pay even closer attention to their customers’ payment needs as often there are nuances in those verticals that require specialized payment treatment. For example, the healthcare and pharmacy industries need to accept FSA and HSA cards. Not all gateways have that capability so if your payment partner doesn’t support it, your customers are unlikely to adopt your payment integration. The need for hospitality providers to pass specific data fields to qualify for special lodging rates is another example.
Tip: Engage your customers to learn their needs
Consider surveying your customers to better understand what payment capabilities and features are important to their business. Even if you already have integrated payments, it’s always a good idea to periodically solicit input and feedback from your customers. Your payment program will be stronger, and your customers will appreciate the deeper level of attention to their needs.
Obstacle: Processing costs are too expensive
Software providers and merchants have competing interests when it comes to payment processing. Merchants are looking to save money while software providers are looking to maximize their payment-related revenue. As a result, processing fees for integrated payments can easily lean toward the higher end of the pricing spectrum. But it’s important to remember that fees your customers consider to be excessive or opaque can quickly incent them to stick with their existing, non-integrated payment provider. This hesitation is often compounded by a lack of clear communication around the value that integrated payments bring, such as operational efficiencies or enhanced customer experiences. For merchants operating on tight margins, the perceived financial burden of higher processing costs can outweigh the convenience and benefits of the integration, leaving software providers with lower adoption rates and unrealized revenue potential.
Tip: Keep your pricing within market standards
If you’re not experienced with payments, it’s always wise to check with your payment partner or other external resource before setting prices and fees. Your payment partner likely has provided you a buy rate that you can mark up to your customers. Whether you offer your customers a flat rate or bundled price, make sure your marked up price is not above industry standards or what your customers are currently paying for payment processing.
Obstacle: Poor communication of the value of integrated payments
Awareness of your payment program and the value it brings to their business are essential for customer adoption. Customers are more inclined to stick to existing workflows unless you purposefully introduce your payments program and clearly articulate the value it brings to your customers’ business. Examples of benefits may include:
- Streamlined operations and workflows: No need to use multiple systems or manually reconcile payments. This saves administrative time and results in fewer errors.
- Enhanced Security: Payments are processed in your secure platform reducing risks of breach and simplifying PCI compliance.
- Better purchaser experience: The checkout process for cardholders is more intuitive and smoother, which leads to higher conversion rates and reduced cart abandonment.
- Stronger business insights: Integrated payments provide consolidated dashboards and analytics, to help your customers track revenue, payment trends, and make informed business decisions.
Tip: Reinforce the value of your payment integration across all touchpoints
Make sure the value of your payment program are prominent in key areas of communication, including your website, product sheets, salesperson interaction, and account rep engagement with customers. Consider engaging them in a conversation about the administrative time it takes to manually reconcile payments. Tailor your messaging based on vertical needs or customer segments to ensure you are well communicating what is in it for them.
Obstacle: Lack of an intentional payment technology strategy
It is common to consider payments as a revenue generator or just another feature of the software rather than the strategic differentiator it can be. Often there are too many payment integrations to support and too many choices a customer must make. This leads to an unsustainable environment and an inconsistent customer experience. A strategic approach and the support of the right payments partner allow you to harness the real power of payments to propel your business upward. Instead of being a feature of the software, payments become a strategy that leads to competitive advantages.
Tip: Develop your comprehensive payment strategy
Work with your payment partner or internal payment expert to develop your integrated payments strategy.
- Define clear goals for your program. This includes revenue targets, adoption rates, and expected improvements in your customers’ experience.
- Develop your pricing strategy. How will you structure customer pricing? Flat rate? Bundled with your software subscription or license? Transaction fee based
- Segment and educate your customer base. Then you can tailor your messaging and value proposition around the needs of those customers.
- Streamline your boarding process. Make boarding your customers onto your payment platform as simple and painless as possible.
- Continue to enhance your program. This includes introducing new features or payment channels and methods based on new technology advancements and input from your customers.
Adoption is an ongoing process, not a one-time launch
Removing these barriers and reinforcing the convenience and value of integrated payments will help improve your adoption rate. Open a dialog with non-adopting customers to find out why they are hesitant to adopt will help you better understand any underlying issues you have with your program. Promptly addressing these issues will improve your program adoption, customer retention, and your payment revenue income. If you’d like to learn how to further improve payment adoption in your software, please check out our webinar-on-demand, How to Drive Customer Adoption of Your Payment Integration.
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