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Selecting the right payment gateway is a pivotal decision that significantly influences various aspects of your business, ranging from customer experience and conversion rates to overall business stability and cash flow. For software companies catering to international customers, this decision becomes even more critical, necessitating a careful evaluation of factors such as cost-effectiveness, flexibility, and security.
In this article, you learn what factors to consider when choosing the right payment gateways and what payment gateways are the best for your SaaS companies.
1. Payment gateway - The incredible partner of SAAS
1.1. A competitive advantage through minimal customer experience
With the widespread coverage of the Internet, companies providing software, applications, platforms, and more also increased exponentially to meet the high demand for online services. This also makes the technology solutions market more competitive than ever, especially since the COVID-19 pandemic.
As the market becomes saturated with technology enterprises of varying scales — ranging from nimble startups to industry giants — each contributing software, applications, platforms, and outsourcing solutions, a prevailing strategy for securing a competitive edge revolves around the maximization of user experience. In this dynamic environment, where user-centricity is paramount, a strategic and robust payment gateway integrated seamlessly into websites or applications becomes the linchpin for success.
To do so, a good payment gateway for integrating into a website or application needs to meet the following requirements:
- Allow users to customize the interface and the payment process
- Accept various payment methods such as credit/debit cards, QR codes, bank account connections, etc.
- Fewer, easy to follow and user-friendly checkout steps
- Few errors and mistakes when trading
- Information security and confidentiality for users.
1.2. A payment gateway is a tool for financial management.
Integrating a third-party payment gateway into the company's products/services is an effective method to keep your focus on the core business. A good payment gateway should allow:
- Exporting transaction reports
- Exporting a comprehensive report that helps businesses collect a lot of useful information for customer analysis
- Protecting the financial information of the company
When using a high-quality payment gateway, your company can rest assured with this “cash machine” and focus on developing marketing, R&D, etc. Especially for SaaS (Software as a Service) businesses, managing the process of driving money and cash flow from customers' accounts is of great importance.
However, choosing a suitable payment gateway for software companies whose business models include many assets (assets) and high risks is not easy. International payment gateways may not accept such risks. This challenge is very common to small companies that might not have a long history of transactions.
2. What criteria to choose a suitable payment gateway for your software companies
To choose a payment gateway that best suits your company, take a look at the following questions:
Some gateways only support certain countries or for certain currencies. Therefore, you should choose a gateway that covers the countries and currencies of your targeted market.
Companies should understand different markets and their preferred payment methods. For those companies that are considering future business expansion, using a payment gateway with global payments would be a reasonable investment.
When it comes to international customers, tax-related problems (sales tax, VAT) will certainly arise during the transaction process. Companies need to choose a payment gateway that provides complete and accurate information, as well as a support team that can be easily contacted during the international payment process.
One solution chosen by many people for the convenience and transparency of international transactions is to open a company in Singapore. Setting up a company in Singapore, where headquarters and representative offices of world-leading payment gateways are located, helps businesses to easily work with employees of these gateways and receive their support timely.
If you're wondering about the services your company offers—whether they follow a subscription-based model or involve lifetime licenses—you'll need to decide if your customers will be billed monthly, quarterly, or yearly, or if you prefer a one-time lifetime license.
Keep in mind that the chosen business model can impact how payment service providers assess your company's risk. This, in turn, may influence whether or not certain gateway providers will support your business. For those utilizing a Software as a Service (SaaS) model with recurring fees, it's essential to choose a payment gateway that accommodates recurring payments. Contact Global Link Asia Consulting for more detailed information.
If you've developed the software in-house, that's great. However, if it involves third-party copyright, it's crucial to have appropriate agreements in place. These considerations are significant for payment gateway providers when evaluating a company's trustworthiness for acceptance.
Furthermore, they play a role in how payment service providers assess the associated business risks. Make sure you have clear documentation and agreements regarding any third-party copyright involved. This will contribute to establishing a solid foundation for your business with payment service providers. If you have any questions or need guidance on this matter, feel free to reach out to Global Link Asia Consulting.
What's the typical monthly transaction amount for your business? Additionally, consider the future monthly trading volumes—are they expected to remain stable or experience growth, and if so, by what percentage? Assessing these factors is crucial in selecting a payment gateway that aligns with your business needs.
Evaluate whether your company prioritizes the simplicity of the gateway's integration and operation or seeks a lower overall cost. It's also important to identify any additional services required during the checkout process.
A business with high revenue and growth should choose a payment gateway with greater flexibility, as it will be better for the company to operate without being subject to limits.
You can choose a higher flat monthly fee with lower transaction costs or vice versa. They can also select various advanced services or a single option to decrease costs. A thorough calculation of revenue and expenses helps the company choose a suitable payment gateway and also helps to manage cash flow on your payment gateway effectively.
3. The top payment gateway you can choose today
Here are some payment gateways recommended by our experienced consulting staff at Global Link Asia Consulting.
PayPal is the first and most popular international payment gateway in the world. Payments are accepted with credit cards, debit cards, bank accounts, or PayPal wallets. In 2019, PayPal had more than 277 million users around the world. If your business’s main market is overseas, PayPal would be a perfect choice.
Stripe is a reputable US-based payment gateway that can support payments to over 45 countries worldwide. Stripe supports all big credit cards. Stripe has a quick onboarding process and a strong API system, so merchants can easily integrate into their website or app. Stripe is very popular in the US, Canada, Australia and the UK.
2Checkout is another payment gateway with accessibility in over 180 countries. 2Checkout also supports all major credit cards such as Visa, Mastercard, Diners Club, American Express, and some others. Besides, in countries with developing financial markets, 2Checkout usually cooperates with a local payment gateway to grow its market.
Chargebee is the leading Subscription Billing software that supports end-to-end recurring billing, subscription management, and automated invoicing for over 2000 SaaS businesses.
There are many payment gateways, each with different outstanding advantages. Choosing a payment gateway has to be based on the requirements of each business, the risks it is willing to accept, and its growth strategy.
4. How can we help you register your chosen payment gateways?
Global Link Asia Consulting, as your trusted one-stop corporate service provider helping hundreds of business owners start their businesses overseas and manage their companies with success, we can
- Provide advisory services for international monetary transactions, optimizing business cash flow;
- Do PayPal Underwriting to get access to PayPal Pro and advanced features;
- Assist in registering and maintaining VIP accounts with international payment gateways, offering faster processing and lower fees;
- Offer guidance on compliance with payment gateway User Agreements and help resolve disputes;
- Help you create new PayPal Business accounts, crucial for those with prior account issues or high transaction volumes;
- Advise on strategies for increasing transaction limits with PayPal and avoid PayPal limitations and restrictions;
- Help you do tax accounting with your PayPal accounts;
In addition, we offer corporate services for entrepreneurs in PayPal, Stripe non-listed countries wanting to set up their PayPal Business Account:
- Register a company in Singapore; Hong Kong, and the U.S;
- Open a corporate bank account in Singapore with a 99% success rate;
- Choose the right company types for tax optimization in Singapore;
- Apply for business licenses;
- Get an affordable, professional registered office address for business;
- Support to open, authenticate, and manage Stripe Paypal Business in Singapore, Hong Kong, and the U.S;
- Handle all your tax accounting needs, timely annual filings, auditing, and more.
5. FAQs about payment gateways for SAAS companies
Using payment gateways for software companies comes with its set of disadvantages:
- Costs and Fees: One major drawback is the potential financial impact, including transaction fees, setup fees, monthly fees, or chargeback fees. The exact costs depend on the payment gateway provider and the chosen payment methods.
- Account Freezing: There's a risk of payment accounts being frozen if the payment gateway provider suspects any irregularities in the company's business operations. This is particularly true for platforms like PayPal.
It depends on various factors. While it can help minimize cash flow risks and cater to customers with diverse payment preferences, effective integration and management can pose challenges, along with additional costs.
Typical fees associated with using a payment gateway for a SaaS business include transaction fees, currency conversion fees, withdrawal fees, advanced features fees, upgrade fees, and management fees.
Typical fees associated with using a payment gateway for a SaaS business include transaction fees, currency conversion fees, withdrawal fees, advanced features fees, upgrade fees, and management fees.
For recurring billing and subscription-based models, several payment gateways offer strong support:
- Stripe: Known for flexibility and easy setup, especially beneficial for Stripe Business in certain countries.
- PayPal: Offers broad support for subscription and recurring payment models, available for PayPal Business in certain countries.
- Chargebee: Specifically designed for businesses relying on a subscription billing model.
- Braintree (by PayPal): Recognized for robust support for recurring payments.
With over a decade of experience serving as a trusted partner to more than 750 business owners seeking professional development and breakthroughs in the international market, we are an expert strategic corporate service provider helping you incorporate and operate successfully in 10 different countries
Our areas of expertise include:
- Strategic Consulting and Company formation in over 10 different countries worldwide such as Singapore, Hong Kong, the U.S., Australia, Thailand, Malaysia, and offshore destinations like BVI, Belize, Seychelles, and more.
- Account opening for personal and corporate bank accounts, as well as setting up PayPal and Stripe gateqays in countries like Singapore, Hong Kong, and the U.S..
- Tax Consulting and Preparation for SFRS IFRS financial reports, corporate income tax returns, VAT/GST (Value Added Tax/Goods and Services Tax), and more.
- Opreation support:
- Registered adress;
- Foreign consular legalization;
- Trademark and patent protection registration in Singapore and the US;
- Employment Pass application in Singapore and Hong Kong;
- Website design, international SIM number provision;
- DUNS registration.
With over 10 years of experience and a team of experts with 5 to 25 years of experience (international standard certifications) as well as direct partnerships with institutions such as OCBC, UOB, DBS, PayPal, and Stripe, we are proud to offer professional, legal, transparent, sustainable services with no hidden costs.
Global Link Asia Consulting Pte. Ltd. is pleased to announce the publication of the above insightful and informative article on our official website, Global Link Asia Consulting on 30th November 2020. The copyright for this article is exclusively held by Global Link Asia Consulting Pte. Ltd. Any unauthorized reproduction or distribution of this content without our express written permission is strictly prohibited. We value the protection of our intellectual property and appreciate your cooperation in adhering to these guidelines. Thank you for your continued support of Global Link Asia Consulting Pte. Ltd.
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