Research shows that the global software-as-a-service (SaaS) industry was valued at $248.76 billion in 2023 and is projected to cross $250 billion this year. What’s more, this value is expected to reach $325 billion by the year 2028.
As such, the advantages of SaaS offerings can’t be easily overlooked. SaaS business applications are web-based, which means that they are hosted on cloud infrastructure. It’s an alternative to traditional software distribution and on-premise software installation—companies don’t need to build and maintain servers or data centers.
Instead, SaaS applications are hosted on cloud computing networks and users can access their functionality on-demand through the internet. All you need is a fast internet connection, a web browser, and your login credentials to access your cloud-based software.
The SaaS model isn’t just for the tech industry—cloud services are widespread in industries such as healthcare, retail, eCommerce, and education. SaaS services are also used in customer relationship management (CRM), human resources management, analytics, and communication.
In this article, we’ll explore the many benefits of SaaS and how to implement SaaS payments.
TL;DR
- The benefits of SaaS offerings can’t be easily overlooked. SaaS applications are hosted on cloud computing networks and users can access their functionality on-demand through the internet resulting in significant cost savings, scalability, flexibility, security, and convenience.
- Because of their many benefits, businesses have realized the need for implementing SaaS payments as well. However, small businesses must carefully choose the right payment gateway, research the solution’s integration capabilities, and ensure it supports automating billing and invoicing including recurring payments.
- Businesses looking for embedded cloud-based payment solutions need to verify the data protection methods used by SaaS payment providers (e.g. tokenization, encryption). They must also check the kind of expertise and support the company offers before implementing a solution.
The Benefits of SaaS
The SaaS industry has seen tremendous growth over the last two decades—all because of the benefits these solutions offer. Let’s take a look at some of them.
Cost savings
With most SaaS products, there are no upfront costs to buy or install the applications in a local environment which makes them very cost-effective. No hardware or IT infrastructure costs are involved either as you can access the applications over the internet. What’s more, users don’t need to bear the cost of maintaining or updating the software. It’s hosted on the cloud and software providers are responsible for software development, maintenance, and releasing updates.
SaaS companies use subscription-based pricing models so customers are aware of how much they have to pay month-on-month. Generally, pay-as-you-go pricing options are available so you pay only when you use the software. So companies end up saving even more money as they don’t have to worry about software licensing fees.
Scalability and flexibility
One of the main reasons why SaaS is so popular is that it can be accessed from anywhere as long as you have a working internet connection. That’s why demand for the SaaS delivery model exploded during the pandemic as it allowed employees to work remotely with minimal disruptions to their normal workflows.
SaaS offers businesses a lot of flexibility as they can quickly change their plan if their business needs or usage changes. Downgrades and upgrades can be applied in a few clicks from a single computer.
Automatic updates and maintenance
SaaS software is maintained by the service provider that developed and is hosting the software on a cloud. So users don’t need to worry about updating the software. Updates are pushed to the cloud automatically and regularly by the SaaS provider.
SaaS companies are responsible for maintaining their applications and notifying their clients. This reduces the chances of malware attacks, bugs, and redundancies. It must also be noted that these updates or new features are usually free unlike with traditional software.
Enhanced collaboration and accessibility
SaaS solutions offer 24/7 accessibility on any device for remote employees, facilitating global collaboration. For example, a CRM solution (e.g. Salesforce) allows customer support teams to utilize distribution lists for constant monitoring.
SaaS tools for document sharing, video/audio calls, and task management enhance collaboration and efficiency. They foster a global workforce, widening the talent pool, and promoting seamless communication and collaboration across diverse locations and time zones.
Security and compliance
SaaS providers put a lot of effort into protecting their applications as well as business data. With regular updates and patches, bugs are fixed and the applications are protected against the latest malware. This also ensures that SaaS products are compliant with the latest data security guidelines.
Implementing SaaS Payments
Because of their many benefits, businesses have realized the need for implementing SaaS payments as well. However, small businesses must keep in mind a few things before jumping into it.
Choosing the right payment gateway
When a customer makes a payment, the payment gateway captures the customer’s information, validates it, and then transfers the amount to the business account. So when choosing a payment gateway, you should check if the software is easy-to-use and is PCI compliant.
Businesses should also be aware of the various fees charged by payment gateways. Take the time to review fee structures and research the fees that can and cannot be negotiated.
Integration with SaaS platforms
SaaS payment solutions are built to be easy to plug in with other software applications. However, before integrating SaaS payments with other platforms, it’s best to understand the hardware and software requirements and versions of both. If customizations are required, SaaS vendors are usually more than willing to help.
SaaS payment platforms often integrate with accounting software, allowing seamless record-keeping and financial management. This automation enhances the user experience, increases efficiency, and reduces the risk of errors, ultimately contributing to improved cash flow and business operations.
Managing subscriptions and recurring payments
One of the greatest benefits of SaaS payments is automatic billing and invoicing. Users enjoy the convenience of recurring payments and automated invoicing, reducing manual tasks and ensuring timely payments.
Make sure to implement workflows to handle failed payments and cancellations. Refunds should also be processed quickly to prevent customers from getting frustrated.
Challenges and Considerations
Customer and payment data are extremely sensitive and private and need to be protected. Hence, businesses looking for embedded cloud-based payment solutions need to verify the data protection methods used by SaaS payment providers. Tokenization must be used along with encryption to protect all transactions.
You also need to consider providing 24/7 customer support to help customers with any payment issues. Your payments provider can also help in offering expertise and support to your customers.
Case Studies
Sera is a Field Service Management (FSM) software company based in Texas. Their software offers features such as scheduling, real-time customer booking, and easy quote generation for field service professionals. This allows professionals to focus only on providing the best service to their clients while Sera takes care of all the administrative tasks.
The company was looking to help their field professional customers process payments seamlessly. This is where Stax Connect came in.
And what delighted them was Stax’s extended support that went above and beyond the usual scope. In their own words, “Stax took ownership and played middleman to a contractor and us. They put together a program plan and a project plan and everything, which was way above and beyond; To come to the table with that was pretty unique.”
Final Words
Modern-day customers look for quick, intuitive, and straightforward technology, and SaaS applications are perfectly suited to their demands. Internet connectivity has improved by leaps and bounds and accessing software through the web has become cheaper and more reliable than traditional, local software installation.
As such, SaaS payments are one sector that is estimated to grow significantly in the coming years. However, such software needs to be implemented with the utmost care. Data protection and PCI compliance should be the top priorities of embedded payments providers. To enhance customer satisfaction, workflows for automated retries and settlement of payments, refunds, and cancellations must also be built into the software.
To learn how you can implement a robust SaaS payment solution using Stax Connect, contact us today.
Learn MoreFAQs about the Benefits of SaaS
Q: What is SaaS and why is it important?
SaaS, or Software as a Service, is a model of software delivery where applications are hosted remotely on the cloud and made available to users over the internet, typically on a subscription basis. This model eliminates the need for organizations to install, maintain, and run applications on their own computers or in their data centers.
Q: What are the benefits of SaaS?
SaaS can significantly lower the costs associated with purchasing, installing, maintaining, and upgrading software. These applications are also available in the cloud, so you can access them anywhere with an Internet connection. Another key benefit? SaaS platforms can be easily scaled to accommodate growing numbers of users or to expand functionality, and they can integrate with existing software ecosystems via APIs.
Q: What are the most common uses of SaaS?
Some of the most common use cases SaaS include:
- business applications (CRM, accounting software, etc.)
- collaboration apps (email, calendaring, and document sharing platforms)
- productivity software (office software, note-taking apps, and scheduling tools)
- Commerce solutions (POS software, ecommerce, etc.)
Q: What are the basic components of SaaS?
The main component of a SaaS solution is the actual software application offered as a service to customers. Beyond that, SaaS software can have additional offerings, including data storage, API integrations, security features, and more.
Q: What is the advantage of SaaS over IaaS?
SaaS (Software as a Service) and IaaS (Infrastructure as a Service) are both cloud computing services, but they serve different purposes. SaaS provides end-users with ready-to-use software applications over the internet, while IaaS offers virtualized computing resources over the web. SaaS focuses on software and its use, whereas IaaS focuses on the infrastructure that supports online services.
