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What is payment processing?
With digital payments topping $9.46 trillion in 2022, it's safe to say online sales are booming. This is true regardless of your niche. Businesses and people are shopping online, buying everything from consumer goods to B2B software..
To stay competitive, organizations need to process payments quickly, easily, and securely. This is especially true in online-first spaces like software and e-commerce.
But what is payment processing, exactly? Why do you need it, how can it help your business, and how should you go about it?
We’ve got answers. As a payment processor ourselves, we know the topic inside and out. Below, we’ll share everything we know about payment processing, its benefits, and important decisions you might have to make.
Types of payments processed
There are several types of payments that can be processed. The most common ones include credit and debit cards, ACH bank transfers, and wire transfers.
Credit cards
Due to their simplicity, security, and speedy processing, credit cards are a widely used payment option. Payments can be handled offline or online via a payment gateway. To safeguard customers and business owners, credit card issuers have put fraud protection systems in place.
Debit cards
Similar to credit cards, debit cards are a widely accepted payment method for businesses. They enable customers to make purchases by directly debiting funds from their bank account. Debit cards offer a convenient and quick payment option.
ACH bank transfers
ACH bank transfers are a cost-effective payment option. They wire money straight from customers' bank accounts via a clearing house. This payment method requires more information - like account numbers and sort codes - and takes longer to process.
Wire transfer
Wire transfers are direct account-to-account transfers. They work a lot like ACH bank transfers, minus the clearing house.
Do I need payment processing software?
There are a variety of benefits that come with payment processing solutions like Salesbricks. The most important and obvious one is that you can process payments online - but here are some others.
Faster transactions
A quality software solution lets you collect signatures and payments instantly. Clients just enter their information or send money using on-screen instructions. A few minutes later, their funds are en route to you.
This reduces purchase friction and complexity, making it easier to buy from you. This can increase sales by 20-30%; a big difference. Even better - you can save payment information and process renewals, upsells, cross-sells, etc instantly.
Fraud protection
Payment processing software eliminates human error and uses secure payment gateways to route online data. This gives you an extra layer of protection from fraud, increasing revenue and preventing accidents.
Less effort
With payment processing, your sales team doesn’t waste time manually inputting payment information, collecting signatures, etc. As a result, less time is spent processing payments and more time is spent doing useful work.
Valuable insights
90% of banks’ valuable information comes from payment processing data. With software, you get first-hand access to this data and all the benefits that brings. For example, using Salesbricks analytics can help you make better choices regarding products, prices, and marketing tactics.
5 reasons SaaS brands need digital payment processing
Here are five reasons why payment processing is crucial for SaaS brands:
Self-service sales
Most SaaS solutions heavily rely on self-serve customers. These customers buy products on their own, without the help of your sales team.
For this to be possible, you need a convenient payment processing system. This lets you set up self-serve checkout pages for smaller customers who want to configure and purchase software on their own.
As an added benefit, customers who make purchases quickly and easily are more likely to return in the future. For all these reasons, you need online payment processing to succeed in SaaS.
Improved customer experience
According to a PYMNTS survey, 40% of consumers feel inclined to return to a merchant's website after a great payment experience. Creating experiences like these is possible with quick, secure, and practical payment options.
Payment processing software helps this in three ways.
First, offering a convenient way to pay for things - like Salesbricks’ URL-based configuration and checkout pages. Second, offering a number of payment options for your customers’ convenience. Third, by making sure customer data and funds are safe using encryption and other security measures.
Predictable cash flow
With software, payments are received on time thanks to automated payment collection. This can help companies increase the accuracy of their forecasts and decrease the volatility of their cash flows.
Unlike humans, software collects money regularly without requiring any manual intervention. This reduces the risk of late or missed bills, invoices, and payments. It ensures businesses have a stable revenue base they can use to expand.
Additionally, some payment processors offer cutting-edge tools for controlling cash flow. These tools can assist companies in analyzing financial inflows and outflows, tracking payment patterns, and seeing potential problems with cash flow early on.
To see how Salesbricks can help you create predictable cash flows, click here.
Security
SaaS businesses can assure customers that their payment information is safe by working with a payment processor like Salesbricks. This enhances trust and loyalty while killing any friction and resistance to sales.
Why?
Because to maintain the security of payment transactions, payment processors adhere to industry standards and laws. The Payment Card Industry Data Security Standard (PCI DSS), for instance, lays out specifications for security management, policies, practices, and more.
Through this, payment processors help prevent unwanted access to and theft of sensitive data. This includes credit card numbers. With encryption and tokenization technologies, processors like Salesbricks make sure you’re compliant and financially protected from data loss.
Increased operational efficiency
Using payment processors can greatly improve operational efficiency for SaaS companies. By automating payment processes, manual work is eliminated. The risk of human error is greatly reduced, which reduces the amount of checks and security measures needed.
Payment processors help in a number of other ways. For example, Salesbricks offers…
Reporting tools and real-time transaction data. Use these to manage and keep tabs on earnings, cash flow, and transaction history. Over time, aggregate data to improve pricing and invoicing strategies as well as make data-driven business choices.
Integrations. Integrating with other types of software like accounting software and customer relationship management (CRM) software automates even more tasks. By reducing the time and resources needed for billing and invoicing, it frees you up to concentrate on other tasks.
Guardrails and subscription management features. You can create guardrails that reduce the number of options your sales team has at each stage in the customer journey. This focuses them on what matters and reduces distractions. Post-purchase, you can manage subscriptions easily and seamlessly.
Do you need a payment gateway or a payment processor?
You may have noticed the terms "payment gateway" and "payment processor" used interchangeably when learning about the different methods of accepting payments, but they're not the same thing.
Payment processor: A payment processor oversees the transaction process and makes sure that funds are approved and transferred. Its main duties include:
- Getting a transaction approved
- Communicating with the cardholder's issuing bank
- Sending money to a merchant account
- Verifying funds are available to finish a transaction
- To establish clear expectations for payment and product or service with your customers
Payment gateway: A payment gateway is responsible for securely transmitting transaction information from the merchant to the payment processor or acquiring bank. It encrypts sensitive data during transmission and stores it securely. It also provides real-time transaction reporting and management tools to merchants, allowing them to monitor and reconcile transactions, issue refunds, and manage chargebacks.
- Securely transmit transaction information from the merchant to the payment processor or acquiring bank to initiate a payment request
- Encrypt sensitive data during transmission and store it securely to protect the customer's payment information
- Verify and authenticate the transaction information, such as card details, address, and CVV, to ensure the transaction is valid
- Integrate with different payment methods and currencies to offer a seamless checkout experience for customers worldwide
The Salesbricks difference
Quality payment processing helps your team close more sales, stabilizes cash flow, and increases customer happiness. It’s a small investment that makes a big difference and pays for itself over time.
We should know; at Salesbricks, we offer a comprehensive payment processing solution. It comes equipped with a quality gateway and a robust feature set that enables self-serve sales.
With our affordable pricing starting at just $99 per month and 0.89% commission, there's never been a better time to try out our platform. Don't wait any longer, sign up for a free demo today and start taking your SaaS business to the next level with Salesbricks.
we do here at Salesbricks.
