I have a good friend that makes me laugh a lot. When we talk about someone that seems to only take and gives little value, he says, “Yeah, they name streets after that guy — one way.”
Some Payment Gateway Integration Partners can seem very much like a one-way street. It’s not as simple as integrating a gateway and announcing its availability. There are a couple of issues you must constantly be aware of:
- You are handing your hard-won client off to another partner and assuming all will go well.
- Customer acquisition costs are massive. If you are bringing business partners to the gateway provider, you need to ensure that you are being compensated via a recurring revenue share based on transactions processed.
So, how can you avoid a Gateway partnership becoming a one-way street? Here are five things to keep in mind.
1) Make sure your payment gateway partner values your customers as much as you do. This should be your #1 must-have criteria in a gateway partner, yet it is probably the least thought about when selecting a partner. You need to ask the following questions:
- What is the support plan?
- How is that plan executed — internally or externally?
- If a support issue needs to be escalated, what is the process and timeframe?
- Who handles bank account changes, billing issues, and business formation changes?
- If the payment gateway provider provides the merchant accounts, ask questions about their application and underwriting process.
- Can credentials be pushed automatically into your app so that the end user has less to do?
- Is there communication with your users about enhancements, service issues, re-collection options, credit card decline recycling strategies, etc., or are those customers an afterthought?
2) Make sure they offer multiple payment modalities. Recurring or subscription billing should have the ability to process credit cards, debit cards and ACH transactions. A single platform for billing U.S. and Canadian bank accounts and credit cards is a competitive differentiator. With credit card decline rates averaging 15% for recurring billers, an ACH option is a must-have. With ACH, decline rates are typically below 3% and processing fees are much less compared to credit card transactions.
3) Look for single-stack solutions and adequate development support. A single-stack integration solution should be available from your gateway partner. Developers shouldn’t have to use different processors, versions, or stacks when integrating across those various channels. Single-stack APIs create opportunities for payment integration that, in turn, reduce integration time.
Additionally, API support should offer developer-friendly documentation, sample code, and other support features that improve the development process. Test accounts should be readily available and support should never be more than an email or phone call away.
4) Make sure your gateway partner understands PCI compliance. Payment Card Industry compliance is often confusing and intimidating. For developers and SaaS providers the decision to embed payment processing into an application often leads to questions about obligations and repercussions regarding compliant hosting solutions. Make sure your payment gateway partner understands PCI compliance and can address those questions.
5) Look for a true revenue-share model. It makes no sense to leave money on the table, but many gateway partners don’t offer a genuine revenue-share model. Many SaaS providers think: We do the integration and our clients choose their provider (if gateway options are offered).
Often the development itself is the focus rather than what benefits can be derived for both the users and the SaaS business.
The payment gateway partner is being provided a new client with zero acquisition cost. It is reasonable that a revenue stream agreement should be in place for the lifetime of referred clients. Some providers avoid these agreements because they believe they could be viewed as an endorsement of the gateway provider. But if you believe your end users will benefit from your gateways partner’s tools for reliably getting paid and you have faith that your clients are well taken care of, why wouldn’t you want to endorse them?
Consider the SaaS provider collecting $29 per month for its app. If each of those clients generated just $10 per month in payment related revenue sharing, that would mean a 33% bump in income. A revenue-share partnership also produces better and more frequent communication between the SaaS provider, the payment gateway provider, and the SaaS user base. This synergy drives enhancements that benefit all stakeholders.
Save time and money
The payment gateway strategy you choose will have have long and far-reaching effects on almost every part of your business. By following the recommendations above you can save time and money while generating new revenue streams for your business. Most importantly, you can deliver more value for your end users.
If, after reading this, your current partner looks like a one-way street, contact Agile Payments for options to address the five points discussed in this article.