Improving Time to Revenue with Embedded Payments
Time to Revenue (TTR) is a key metric that tracks how long it takes for a company to convert a lead to a paying customer, from the first interaction to a deal being won and revenue beginning to flow. For B2B vertical SaaS businesses that are often laden with lengthy and expensive sales cycles, improving TTR isn’t just imperative, it can be existential.
One of the winning virtues of vertical SaaS platforms is their ability to be the system of record for their SMB merchant clients, providing a single platform for everything customer records, accounting, inventory, to payment acceptance. For these vertical SaaS platforms, TTR can be heavily impacted by how payment solutions are deployed.
Traditional gateway redirects require additional technical integrations and add to the friction of merchant onboarding. Building payment acceptance capabilities directly into the vertical SaaS platform, often referred to as embedded payments, allow for a low-friction user experience for merchants with a single integration via modern APIs into the SaaS platform itself. Merchants also start generating revenue from transactions more quickly because the payment process is already built into their existing user flows abstracting away significant design and development work.
By embedding payments, vertical SaaS platforms can also explore new monetization strategies such as transaction fees, subscriptions, or other revenue models tied directly to the payment activities of their merchants, expanding and diversifying their revenue base from SaaS fees alone. However, the ability to control the transaction rates paid by merchants processing payments on the platform, also known as the merchant discount rate, requires care and consideration in choosing the right payment acquiring model when implementing embedded payments. The selection of certain acquiring models like Payment Facilitation or hybrid PayFac-lite programs can eliminate the need for the merchants to enter into multiple contracts (one for the SaaS platform and one with the payment processor) enabling a single contract, further reducing TTR.
The various payment acquiring models and implementation strategies require careful consideration for vertical SaaS platforms aspiring to embed payments. RPY Innovations, a payment technology consulting firm, has helped numerous vertical SaaS platforms formulate and execute on their embedded payments strategies. Contact RPY at hello@rpyin.com to explore how we can help.
