What Is the Right Payment Gateway For Your B2B SaaS Business?

Blog Summary

Find the perfect payment gateway for your B2B SaaS business! In this blog, we’ll explore payment gateways and how to choose the right payment gateway for your B2B SaaS business. Get started today and start accepting payments with ease with NTT Data Payment Services.

Exploring Payment Gateway

Regarding payment gateways, there are many ways to skin the cat. But how do you choose the right payment gateway for your B2B SaaS business?

Before diving into the river, let’s analyse its depth!

For starters, an online payment gateway is what we use every day. We go grocery shopping and swipe our cards to make payments (if you have sufficient funds in your account). In this scenario, the physical payment device (POS) reads the card information by swiping, which is the payment gateway.

That’s for a grocery store; what about a B2B SaaS business?

How Do SaaS Payments Work?

B2B SaaS businesses generally use subscription-based payment similar to Netflix subscription; payment is made monthly. This monthly payment provides them with access to the product’s functionality. Subscriptions may vary depending on the number of users, set of features, time period, etcetera.

Given the cloud functionality of SaaS businesses, it is impossible for a physical payment gateway like the one (POS terminal) we use during grocery shopping.

Some third-party payment processors collect payments from customers, eliminating the need for a SaaS B2B business to maintain a payment processing infrastructure. Speaking of the payment processing infrastructure, this includes a payment gateway, merchant account and subscription management.

Payment Gateway

A payment gateway is essential to any online transaction, allowing customers to pay for goods or services securely. It is the intermediary between the customer’s payment method and the merchant’s bank account, ensuring that transactions are processed safely and efficiently.

When shopping on an e-commerce platform such as Amazon, the payment gateway is the final step in the checkout process, where customers enter their payment details.

This landing page is designed to securely collect and process sensitive financial information, using encryption and other security measures to protect against fraud and data breaches.

It’s worth noting that payment gateways may differ depending on the type of transaction being processed. For example, while one-time payments can typically be processed through a standard payment gateway, recurring payments or subscriptions, in the case of SaaS, may require a specialised gateway explicitly designed for this purpose.

Merchant Account

This type of account allows a business to accept payments electronically. This acts like a middleman between the customers’ and businesses’ accounts. Let’s make this term simple.

It works like a courier service. You give your packed cover to the logistics company. They check for the essential details, and if everything is fine, they ship the package to the given address.

Similarly, when a customer makes a payment on your website using a credit or debit card, the payment gateway sends the transaction details to the merchant account provider, who then verifies the card information and checks for fraud.

If everything is valid, the merchant account provider authorises the transaction and returns a confirmation to the payment gateway. The payment gateway then notifies your website that the payment was successful and completes the order process.

Subscription Management

As said earlier, SaaS runs on subscription-based payment methods. Hence a subscription management tool is vital for creating plans, billing cycles, renewals, cancellations, and other aspects of subscription payments.

A quick summary: A saas payment model starts with the payment gateway, the page where customers fill in their banking details, the merchant account, the middleman between the customer’s account and the business’s account, and finally, the subscription management, which controls all the aspects of subscription payments.

Types of Payment Gateways

There are many types of payment gateways you can choose from. Here are some:

Hosted Payment Gateway

This payment gateway redirects your clients to a different website or a page hosted by your payment service provider (PSP). Once the customers enter the payment details and complete the transaction, they are redirected back to your (merchant’s) website.

Self-hosted Payment Gateway

Under this payment gateway, the customer’s payment details are directly collected from your website and then sent to the PSP for processing. This allows you to have complete control over the user experience and your website’s design and higher responsibility for security and compliance.

API-hosted Payment Gateway

This payment gateway method allows you to integrate an application programming interface from PSP into your website or application. This allows the customers to enter details on your user interface, but the PSP processes the details through the API. You can enjoy the freedom to customise your webpage and the protection by the PSP under this method.

Local Bank Integration Gateway

Under this type of payment gateway, your customers are directed to their local bank’s website or app to make the payment using their banking details. Once the transaction is complete, the bank website sends a notification to your website about the payment.

Every payment gateway comes with advantages and disadvantages, so how will you choose the right payment gateway for your B2B SaaS Business?

How to Choose the Right Payment Gateway for Your B2B SaaS Business?

The right payment gateway significantly affects customer satisfaction, revenue, security and churn. A payment gateway connects your website with the payment processor and allows you to accept online payments. There are a few factors you should consider before choosing the payment gateway.

Security

With the ease of payment online lies the risk of data breaches and fraud. No business will benefit from such accidents. You want to ensure your payment gateway complies with the Payment Card Industry Data Security Standard (PCI DSS) and uses encryption and tokenisation to protect your customers’ sensitive data. You also want to check if they offer fraud prevention tools and chargeback management services.

Price

Compare the charges of different payment gateways, such as setup fees, monthly fees, transaction fees, currency conversion fees, etc. You also want to check if they offer discounts or incentives for higher volumes or extended contracts.

Compatibility

Ensure that your payment gateway can integrate seamlessly with your website platform, subscription management tool, accounting software, CRM system, etc. You also want to check if they support multiple currencies and payment methods that suit your target market.

Features

Certain features, like multiple payment options, recurring billing, flexible pricing plans, discounts, etc., can enhance customer experience. Also, look for features that can help you optimise your revenue and growth, such as analytics and reporting tools, subscription metrics dashboards, dunning management services, etc.

Streamline Your Payments With NTT Data Payment Services

NTT Data Payment Services is a leading provider of payment solutions that offers various types of payment gateways for different business needs.

Whether you need an online payment gateway for your website or app, an IVR payment gateway for voice-based transactions, a POS machine for card or QR payments at your store or delivery location, or a payout service for sending payments to your vendors or customers, NTT Data Payment Services has you covered.

With NTT Data Payment Services, you can enjoy high success rates, instant settlements, multiple payment options and currencies, customised solutions and round-the-clock support.

We take pride in offering reliable and secure payment services to our clients, and we are committed to providing them with the best payment solutions to meet their business needs.

Final Thoughts

As a payment service provider, NTT Data Payment Services understands the importance of a payment gateway in any online transaction. It is a crucial tool enabling customers to pay securely and conveniently.

Depending on the type of transaction being processed, such as one-time payments or recurring payments/subscriptions, the payment gateway can vary. For SaaS businesses, we offer third-party payment processing services, which saves them the hassle of setting up and maintaining a payment processing infrastructure.

FAQs

1. What is a SaaS payment gateway?

A SaaS payment gateway is an online payment processing platform that enables SaaS businesses to accept payments directly from their websites.

2. What is the best payment method for SaaS?

The most efficient payment method for SaaS is considered to be a subscription-based model to receive payments automatically.

3. How do I choose a payment method for my website?

There are a few factors that you should consider when choosing the payment method, such as security, fees or charges of the service provider, payment options and ability to integrate.

4. What are the types of payment gateways?

The four common types of payment gateways are hosted, self-hosted, API-hosted payment gateway, and Local Bank Integration gateway.

5. What are the ideal B2B payment methods?

B2B payments can be made in various methods, but the most trusted methods are credit/debit cards, e-cheques, and electronic funds transfers.

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