Council Post: 3 Ways To Get Started With Payment Facilitation As A Software Provider

The digital revolution is in full effect, and the macro trend of digitization and the migration to modern software platforms has not slowed. Analysts expect the digital share of total retail sales will approach 25% by 2025 and digitally “impacted” sales to approach 40%—not just for business-to-consumer sales but businesses in numerous channels and segments.

This shift to digital, along with the ability to create better experiences and monetize payments, has many software business leaders—especially those that serve other businesses—thinking about the topic of payment facilitation and turning payments into a strategic asset. Business leaders understand the ability to easily purchase products and services is a core part of the customer experience, but some haven’t quite connected the dots within their organizations.

What Is Payment Facilitation?

Everyone involved, including card brands, payment providers and processors, has a precise definition of payment facilitation. But for B2B business leaders, it should be fairly simple. Payment facilitation is the ability for you—as a software-as-a-service (SaaS) provider, software platform, independent software vendor, etc.—to enable downstream businesses or merchants to easily accept payments. Preferably, this is achieved via an embedded, secure and seamless manner invisible to buyers in all areas, from enrollment to payment acceptance to reporting and reconciliation.

This goes beyond traditional payfacs because it creates a unique experience that complements an organization’s specific needs. Payment facilitation, in this sense, is really commerce facilitation because it allows software providers to enable customers to conduct seamless payment transactions.

3 Strategies For Implementing Payment Facilitation

As businesses increasingly interact in the digital world, it becomes more urgent for leading software platforms to facilitate payments. It’s not a matter of taking in revenue, though that’s important. It’s also about turning commerce facilitation into a competitive advantage. Making payments invisible and painless is important for platforms to speed up cashflows and increase sales, which will keep customers coming back.

It’s important to keep the goal of enabling full commerce facilitation in mind when thinking through your approach to driving more transactions in your daily operations. Here are some tips that can help you get there.

1. Don’t get sucked into someone’s operating model.

There are a lot of different solutions and operating models out there, so when you’re contemplating a payment facilitation decision, you might receive input from people who will try to push you toward a specific operating model. Not coincidentally, it will likely be the one their company delivers. Don’t be swayed.

The truth is there’s no one-size-fits-all solution. Whether an operating system is right for you depends on a number of factors, including your go-to-market strategy, your operational needs, your technical requirements, etc. So, keep your needs and your customers’ needs top of mind, and don’t let anyone drive you toward what they sell based on anything else.

2. Be clear on the decisions you need to make.

You’re more likely to make the right decision if you take a methodical approach to defining what you need. There’s a lot to think about because your choice will touch on everything from hardware and software deployment to what kind of payment journey you want to deliver. Here are a few of the questions you’ll need to resolve.

• How will I bring my company to market?

• What kind of experience do I envision for customers?

• What is the optimal pricing structure?

• What connectivity, tenders, channels and markets do I need to support?

• Do I want to handle payment in-house or via a partnership?

• How will my payment needs evolve over time?

You’ll also need to decide on details like how you want businesses to enroll in a payment service and understand the larger picture, such as the investment you’re willing to make and what level of risk you can tolerate. Also, some payment solutions offer value-added services that might be important for your business, whereas others don’t, so it’s important to fully understand your options on that front too.

Having a guide on your payment facilitation journey can be helpful. If you opt for selecting a payment technology partner, ensure they can serve your business by leveraging multiple payment models simultaneously. They should also offer flexibility on services to foster growth over time because your downstream customers will likely start out with a simple payment solution and then scale up as they grow and as consumer expectations evolve.

3. Consider looking for ways to facilitate commerce, not just payments.

Operating models and platform decisions aside, the goals for your payment solution should be strategic and morph with your business. Consider how you can enable rapid connection with your customers around payments with streamlined data inputs to approve and onboard accounts. Think about how exchange and transaction capabilities can help you deliver the seamless, omnichannel experience today’s customers expect.

Also, consider how transaction and commerce data can provide business intelligence to help you drive monetization, including dynamic reporting and near-real-time analysis capabilities that can inform business decisions. The ability to expand and future-proof payments is also worth considering, especially since consumer expectations and payment options evolve constantly.

The key here is to find what’s right for your business while acknowledging the time has come to address payment solutions from a larger and more strategic standpoint.

The idea of facilitating payments isn’t new, but it’s becoming a growing priority for businesses building their digital offerings and presence. So don’t treat it as an afterthought. Implementing payment facilitation, and approaching it with a commerce facilitation mindset, will help your business succeed in this increasingly digital world.

By Forbes Council | https://www.forbes.com/sites/forbesbusinesscouncil/2022/09/14/3-ways-to-get-started-with-payment-facilitation-as-a-software-provider/