In the past few decades, the landscape for businesses have had a shift so radical there simply are no easy words that can describe it. Brick-and-mortar cash-based businesses aren’t gone, but they are truly a thing of the past. Concentrated efforts by the tech industry have changed the business of doing business. There are no signs that the pace of change will slow any time soon, thanks in large part to payment aggregators and solutions like Nuvei's Payment Facilitator Connect that are helping tech companies handle payments better, faster and with more ease.
This includes especially SaaS, or software-as-as-service, development. SaaS has been around for decades, but the mass proliferation of SaaS businesses in the Web 2.0 Era has led to entirely new ways of doing business. SaaS developers are finding many issues that are slowing the growth of their business, but none as major as payment processing.
What is a Payment Facilitator?
A solution that has become very popular recently is the idea of becoming a payment aggregator or payment facilitator. But what is a payment facilitator, and is it right for your SaaS startup? This is where solutions like Payment Facilitator Connect from Nuvei are invaluable.
Payment facilitators allow SaaS startups to offer payment services to their clients to serve as sub-merchants. A great example would be a SaaS platform for independent car mechanics. The software would be used to manage all aspects of their business, from appointment management, inventory, customer relationship management (CRM) and payments. Because the SaaS platform serves as a master merchant, new mechanics can sign-up as sub-merchants by simply adding their banking information and be ready to do business.
In the past, this would require an in-depth and lengthy application process, which could take days or weeks before clients using the SaaS platform could do business. Now that payment facilitators are growing in demand, SaaS providers can achieve instantaneous approvals for their clients, along with a slew of other benefits. This is the same model that companies like Freshbooks, AirBnB, Lyft, and TaskRabbit all use with much success.
The Challenges of Becoming a Payment Facilitator for SaaS Providers
When initially trying to create payment processes on their own, many SaaS start-ups are turning to bulky, app development-centered payment facilitation models to manage their payments. However, they are finding that there are several hurdles to be cleared with this.
First, building a payment facilitation platform requires considerable man-power and effort to develop and properly implement, creating heavy drains on both developers as well as the company’s bottom line. Additionally, building a new payment facilitation system is a lot like building IKEA furniture – it’s time consuming, effortful and often you won’t know if you missed a piece or a step until it’s too late and you must go back and start all over.
Second, it is very risky. The payments field is very complex and fraudsters are constantly poking and prodding at tech businesses for weaknesses to exploit. Not only is a hiring a team devoted to risk mitigation a good idea, it is a requirement. It’s important that you have the right people in place who understand the compliance issues at stake and to help manage the costs to your business, both financially and reputationally.
Third, it’s expensive. As we’ve hinted in the last few examples, it all costs money. Development of the platform is costly. Hiring experienced personnel to work on risk and compliance is costly. Staffing a client support team is costly. All of it adds up and requires a lot of capital! To get started, the typical capital investment can be as much as $50,000 or more.
Finally, they often find that there is a not only a lack of support, but their abilities to scale might be limited. As mentioned previously, acting as a payment facilitator is risky, expensive and difficult. SaaS firms often start with a few small “proof-of-concept” clients before they can invest in new products, technology or staff. This growth model makes scaling of payment strategies difficult.
Startups may opt for platforms that are built for small companies and change to a new platform when they are ready to scale up their business, which can cost time and anger clients. Or startups may have to work with payment platforms built for larger companies, paying exorbitant costs upfront while they grow their business.
And this is where Payment Facilitator Connect from Nuvei come into play. Connect was developed with SaaS start-ups in mind, offering 3 levels of service that can scale up as business needs grows. Should they be 5 transactions or over 50,000, integration to your website or app is seamless, simple and fast with little interruption to your services.
SaaS start-ups who want to start right away, can begin with Connect Complete, our all-in-one payment facilitation solution that provides full support and technical assistance with integrating to your software or app. With Connect, no costly staffing costs are required or having to understand the complexities of the payments industry. And it all starts with these 6 steps:
How to Become a Payment Facilitator in Six Easy Steps
- Once you join Payment Facilitator Connect, we’ll do all the work for your SaaS start-up to become a payments aggregator. Our solution offers full support and doesn't require bank sponsorship or complex legal framework.
- Your SaaS startup can customize payment and other preferences, plus track new client submissions and all transaction activities in our Partner Dashboard.
- Integrate client boarding to your SaaS website or app via API or a customizable Hosted Application form.
- Manage logins, permissions and track all submissions in the portal. Plus receive real-time status alerts.
- Approvals, can be processed almost instantly. All submissions are screened to ensure compliance with various fraud and financial crime agencies. Once clients are activated, they can begin accepting payments.
- Track every transaction including funding, billing and chargebacks through our robust back-office dashboard or via API. We help protect your SaaS startup and provide real-time payment metrics.
Payment Facilitator Connect is entirely customizable, allowing you to use what you need for your SaaS solution and leave out what you don’t. And since Nuvei is committed to staying ahead of the rapidly evolving payments field, the highly innovative platform is constantly working to adapt to your SaaS startup’s ever-changing needs.