Spokesperson: Grant Evans, VP of Sales and Partnerships for Worldpay for Platforms
The global Software as a Service (SaaS) market is growing at an extraordinary pace. Currently valued at over $300 billion and projected to reach $1.2 trillion by 2032[1], players in this sector are pulling a range of growth levers to enable this impressive trajectory.
There are a number of reasons for this. Most recently, AI has significantly impacted the SaaS industry by enhancing efficiency, personalisation and overall user experience. AI-powered features have become increasingly prevalent in its offerings. In addition, embedding payments has also been a critical catalyst for the SaaS market’s growth trajectory.
The embedded payments offering
The allure of embedded payments is undeniable. It provides a seamless integration of payment processing capabilities into a platform or service, allowing transactions to occur naturally within the user experience. This feature has become an essential part of the modern business toolkit, enhancing customer satisfaction by eliminating the need to redirect users to external payment gateways. By keeping the payment process in-house, companies can maintain control over the user journey, ensuring a smooth and consistent experience that fosters trust and loyalty.
Embedded payments are not just about facilitating transactions; they represent a broader trend towards embedded finance. This concept encompasses a range of financial products, from merchant cash advance loans to business insurance, all integrated seamlessly within a platform. By offering these services in conjunction with payments, businesses can capture customer demand while they are in buying mode, creating a comprehensive and convenient user experience.
However, there is a real challenge in effectively embedding payment capabilities to truly unlock these benefits.
Not every payments platform is built the same
Imagine the frustration of embedding a payment solution only to find that half of transactions are declined. This scenario is all too real for businesses that overlook the importance of authorisation optimisation when choosing a payments provider. Without it, the promise of embedded payments can quickly turn into a nightmare, delivering precisely the opposite of the desired outcome.
SaaS platforms must embrace the opportunity to embed payments with the right capabilities, but this requires partnering with experts who offer more than just a box-ticking exercise. It is crucial to ensure that key elements like high authorisation rates are in place, ultimately delivering a positive impact on the bottom line as well as increased customer loyalty.
The beauty of embedded payments lies in the ability to seamlessly integrate it into a customer’s purchasing journey, enhancing the customer experience and fostering the aforementioned loyalty. Yet, to achieve this, businesses must choose the right partner to navigate the intricacies of payment processing and authorisation together, While adopting innovative tools to remain competitive.
AI on the seamless transaction prize
With AI playing an increasingly prominent role in payment processing, SaaS companies can harness its power to enhance conversion rates. By strategically routing traffic and leveraging data insights, businesses can achieve marginal gains that translate into tangible benefits. This is especially important in a market where businesses often split their processing traffic among multiple providers.
AI can’t work on its own, it needs big datasets to train on. The global reach of some payment platforms can provide access to extensive datasets, offering insights into transaction trends and behaviours. This wealth of information is crucial for optimising authorisation acceptance rates, a key factor in maximising the benefits of embedded payments. High authorisation rates can lead to significant revenue gains, transforming nominal margin improvements into substantial financial rewards.
The promise of embedded payments is vast, offering businesses a golden ticket to increased revenue and customer loyalty. However, this promise can only be fulfilled with a strategic approach to authorisation optimisation and a commitment to leveraging data insights.
By partnering with experts and embracing the potential of AI, businesses can transform embedded payments from a source of frustration into a powerful tool for growth. As we stand at this pivotal moment, the future of embedded payments is bright, but only for those willing to invest in the right strategies and partnerships.
[1] Software as a Service (SaaS) Market Analysis, Size, Share & Trends