6 SaaS Payments Advanced Strategies Explained

Succeeding in international eCommerce on your own can sometimes feel like climbing Mount Everest in a gold suit. The views are spectacular, but chances are you won’t survive the journey.

Establishing and scaling a presence in the global Software as a Service (SaaS) industry is an exhilarating potential win. Still, the resources and operational workload that go into this adventure pose a serious threat to the viability of your SaaS company.

And, going global means more than switching languages!

International expansion means managing local SaaS payment processing, tax and regulatory compliance requirements, shielding your SaaS platform from a greater fraud risk, and accepting diverse payment methods and currencies, not to mention the constant need to innovate in terms of product development.

When selling worldwide, it’s important to simplify how customers pay for your products. However, it’s easy to get caught up in perfecting payment processes and lose sight of what truly captivates existing and new users: your SaaS product.

So, what happens next? How can you solve payment challenges and expand internationally while focusing on your products and services?

The short answer is joining forces with a Merchant of Record.

As we discuss several advanced strategies capable of boosting your global SaaS payments, you’ll quickly see why and how an MOR service provider can ease the transition and supercharge your revenue:

6 SaaS Payments Strategies Businesses Should Know
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6 SaaS Payments Strategies Businesses Should Know

1. Offer Localized Shopping Experiences

With 2.64 billion online buyers in 2023, it’s natural to assume that payment habits exist amongst shoppers and, what is more, that they are in a constant state of change. For instance, debit cards are among the preferred options in the UK, whereas in the Netherlands, local payment methods like iDEAL rank on top.

Plus, considering local economies and customers’ willingness to pay, you could use regional pricing to your advantage. Streaming services, like Paramount, practice different prices based on the customer’s location. Others personalize their campaign based on cultural differences.

SaaS platforms determined to achieve global success and generate revenue must be able to cater to all of the different payment preferences among buyers. Unfortunately, many merchants lack the technology that enables them to do so.

The easy solution would be to join forces with different third-party payment solutions. However, having a complex payment stack is not only difficult to manage, but it can be extremely resource and labor-intensive, often hindering business agility.

Implementing global payment methods differs in process complexity and costs. Credit cards are a great example, as currency conversions between customer accounts, card schemes, and acquiring banks frequently require extra development efforts.

And let’s not forget that creating localized shopping experiences with the help of a payments provider must include additional features such as regional pricing, tax considerations, and compliance management.

This leads us to the obvious conclusion: A payments platform like the Merchant of Record, operating as the control room of your payment infrastructure, will help you answer customer preferences through local and popular payment methods wherever you might sell, considerably reducing operational costs and workload.

SaaS platforms need to start leveraging payment-related functionalities to ensure business growth in different corners of the world.

2. Ensure Complex Tax and Compliance Management

The very nature of SaaS and software products has made them the perfect fit for hyper-growth. But this is only in theory, unfortunately, because once these offerings became taxable, many businesses got caught in the tax compliance web.

Should you wish to expand globally, keep in mind that there are 195 countries in the world, each with its own set of regulations, all of which you must be in compliance with.

Once you start accepting payments, domestically and globally, ensuring tax and compliance management is now an obligation rather than a growth strategy.

Selling in the US alone exposes you to 45 regulation sets with different registration or tax reporting processes. And there is a need to ensure correct tax calculations for more than 13,000 sales tax jurisdictions. Sometimes these tax jurisdictions can have more than one tax rate, which may also change frequently.

Plus, you have data protection regulations such as GDPR in Europe, CCPA in California, and the list goes on and on.

Mind you, these regulations are always prone to change. Constant monitoring and audits are required to ensure that imposed data security standards and tax processes are always implemented within your sales processes.

A handful of people cannot possibly keep things in order. The amount of work is simply overwhelming, and failing to comply will undoubtedly lead to penalties, fines, reputational damage, business disruption, and even legal action in some cases.

With all of these mandates, it’s easy to see how global ambitions are undoubtedly crushed by inefficient tax and compliance management.

It is absolutely essential to find a way to ensure tax and regulatory compliance for each of the territories you are currently selling into, as well as for those you are considering doing so.

In other words, you want a solution that can scale together with your business.

Unfortunately, relying on a fragmented payment stack comprised of various solutions falls short of delivering the efficiency you require. Moreover, it continues to place a significant burden on your internal team, adding to their workload and taking their attention away from meeting their business goals.

Nonetheless, failing to comply could ultimately impact your business in a negative manner.

3. Provide End Users with Multi-Lingual Support

While we’re sure you are well aware of the importance of offering rewarding customer experiences, providing multilingual user support is a critical piece of this puzzle. And we can prove it, too.

Stats show that 70% of users who benefit from assistance in their native language feel more loyal to a brand, while 29% of businesses admit losing customers due to not providing multilingual support.

Multilingual payment support is especially helpful, as frustrations can escalate when discussing transactions. Just imagine having to navigate these conversations in a non-native language.

From improving customer retention to lowering chargeback rates, providing users with assistance in their native language is not a detail to ignore.

However, businesses that attempt to handle this process in-house run into implementation complexities and high costs, as well as linguistic errors or inconsistencies. All of these issues end up compromising user experience, doing more harm than good, and ultimately, costing businesses money rather than saving it.

Sadly, many SaaS businesses view multilingual support as a costly endeavor, overlooking its true impact on business performance.

4. Reduce Operational Overhead

The SaaS industry brings many exciting opportunities for businesses, especially in the context of international expansion. However, navigating the increasingly complex cross-border landscape is becoming more and more of a challenge for merchants, preventing them from winning more SaaS payments.

Rather than prioritizing product development and marketing efforts, SaaS merchants are burdened with an exhausting amount of logistical responsibilities, such as:

• Handing a multitude of regulations that include the proper implementation of specific processes, as well as ongoing monitoring and proactive updating.
• Ensuring vigilant fraud prevention and detection through comprehensive systems.
• Management of different third-party solutions, each with its own features and integration processes.
• Overcoming multi-currency complexities associated with selling worldwide.
• Optimizing the payment infrastructure to meet new market demands and boost transaction volumes.
• Efficiently handling customer support, chargeback, and reconciliation processes, which are notoriously time-consuming.

Facing these operational hurdles quickly strains your business resources, diverting the focus from your product and leaving it unattended and stalled for growth.

Inevitably, this will lead to a significant user loss, as customers will no longer obtain value.

Achieving success on a global stage entails not only operational readiness to seize opportunities swiftly but also delivering an innovative product that adapts to evolving needs and demands.

And the truth is no one can serve two masters.

While you are drowning in logistical challenges, your product is dying.

A growing number of SaaS payments is justified by a financial solution and a strong product offering. The two go hand in hand.

Make sure you choose a reliable payment processing partner that can remove the operational hurdles associated with accepting one-time and recurring payments so you can gain the freedom to work on your product.

Read more on SaaS payments strategies on PayPro Global’s Blog.