Payment acceptance is critical to any successful software-as-a-service (SaaS) business. Without it, your customers can’t pay you, and your business won’t be able to survive. Want to know how to increase your payment acceptance?
You've come to the right place.
Today we’ll discuss everything you need to know about payment acceptance. And show you how it will transform your business and boost customer retention.
Let’s dive in!
What is Payment Acceptance?
Payment acceptance is authorizing, validating, and processing customer payments for goods and services. It is essential to any successful business, as it enables customers to pay for the products and services they need.
Payment acceptance also helps to ensure that businesses can receive the money they are owed while providing customers with a secure and convenient way to pay. Payment acceptance is essential to any successful business model (especially SaaS).
The formula for calculating this is: Payment acceptance = Number of successful payments / Number of attempted payments.
The Components of SaaS Payment Acceptance
A strong and secure payment acceptance system can help ensure customers’ information is secure, and transactions go smoothly. Several components must be in place to have a successful payment acceptance system.
Below is a breakdown of six primary components to consider when improving your current system.
A payment gateway is a link between your customer and your payment processor, and it allows customers to securely enter their payment information and purchase on your website. The payment gateway can also set up recurring billing, refund payments, and track payments.
The payment processor component is the company that actually processes the payments. They handle the payment information and ensure it is secure and accurate. They also handle the funds and deposit them into your account.
A merchant account is a bank account storing the funds from the payment processor. This allows you to access the funds quickly and easily.
The payment form is the page on your website where customers enter their payment information. This can be a simple form or a secure payment form to protect your customers’ information.
Secure Checkout Page
The checkout page is the page customers take to after submitting their payment information. It is vital to ensure the checkout page is secure and the customer’s information is protected.
Finally, you need a payment method. This can be a credit card, debit card, or online payment system like PayPal. It is crucial to choose a payment method that is secure and reliable.
How to Calculate Payment Acceptance
Calculating payment acceptance is relatively straightforward and can be done in simple steps. Payment acceptance is often calculated by pulling data from a payment processor. When you do you should:
- Determine the Total Number of Transactions: The first step is to determine the total number of transactions that have occurred. This can be done by looking at the total number of payments processed or the number of orders placed.
- Calculate the Number of Successful Transactions: The second step is calculating the number of successful transactions. This can be done by looking at the number of payments processed without errors or the number of orders completed without any issues.
- Calculate the Payment Acceptance Rate: Once the total number of transactions and the number of successful transactions have been determined, the payment acceptance rate can be calculated. To do this, use the following formula:
Payment acceptance = Number of successful payments / Number of attempted payments.
8 Reasons for Low Payment Acceptance
Low payment acceptance can have a significant impact on sales and can even threaten the survival of a business. Unfortunately, many common issues can lead to low payment acceptance. Let’s look at 8 of the most common reasons for low payment acceptance and how software developers and SaaS product owners can address them.
1. Poor Payment Processing
Poor payment processing is the most common reason for low acceptance. This can include slow processing times, incorrect information entered, or even technical issues with the payment processor. Poor payment processing can cause customers to abandon their orders or not even attempt to make a payment.
To solve this issue, it is crucial to ensure that the payment processor is fast, reliable, and secure. Additionally, ensuring that the payment processor is integrated correctly into the SaaS product is vital.
2. Unfamiliar Payment Methods
Another common issue that can lead to low acceptance is unfamiliar payment methods. Customers may not be familiar with the payment methods offered by the SaaS product or may be hesitant to use them. To address this issue, it is vital to offer a variety of payment methods, such as credit cards, PayPal, and Apple Pay. It is also essential to clearly explain the payment methods offered and provide detailed information about each.
3. High Fees
High fees can also deter customers from making payments, and many customers may be unwilling to pay high fees to make a purchase. It is essential to offer competitive fees for customers to improve payment acceptance. Always remain transparent about fees, and allow customers to opt out of paying them.
4. Poor User Experience
The user experience of the payment process is also essential to keeping customers committed to making a payment. Customers may be unwilling to make payments if the payment process is easy to use.
It is crucial to ensure that the payment process is as easy and intuitive as possible and to provide helpful customer support to address any issues customers may encounter.
5. Security Concerns
Many customers are concerned about the security of their payments. If customers do not feel secure making payments, they may be unwilling to make payments at all. To address this issue, you should ensure that the payment process is secure and that customers’ personal information is safe. Additionally, it is crucial to provide transparent information about the security measures taken and ensure that customers are informed of any changes or updates.
6. Poorly Designed Website
A poorly designed website can also lead to low payment acceptance. If customers cannot easily find the payment page on a website, or the website is challenging to navigate, they may be unwilling to make a payment. When addressing this issue, ensure that the website is designed with an eye toward usability. Additionally, ensure that the payment page is visible and easy to find.
7. Poor Communication
Poor communication is another common issue that can lead to low payment acceptance. If customers do not receive clear information about the payment process or do not receive timely updates about their payment status, they may be hesitant to make payments.
To solve this you need to provide clear and accurate information to your customers. Always be prepared to provide support/info to address any questions your customers may have about payment acceptance.
8. Low Customer Confidence
Finally, low customer confidence can also lead to low payment acceptance. If customers do not trust the SaaS product or do not feel confident that their payments will be processed securely, they may be unwilling to make payments. Boosting customer confidence is essential to solving this issue.
How to Improve Your Payment Acceptance
Improving payment acceptance is crucial to boost customer retention and to develop a trusting relationship with your target customers. If you’re struggling to improve your payment acceptance, consider how you can adjust your brand strategy and boost payment acceptance.
Accept Multiple Currencies
One of the best ways to improve your payment acceptance is to offer customers the ability to pay in multiple currencies. By doing so, you’ll be able to reach a much wider audience and increase sales. You can easily offer customers the option to pay in their home currency by integrating a payment gateway that supports multiple currencies. That way, customers from all over the world can pay for your product or service with greater convenience and form a bond with their favorite seller.
Offer Digital Wallets
Digital wallets are becoming increasingly popular these days and for a good reason. They provide customers with a quick and secure way to make payments online. By offering customers the ability to pay with their favorite digital wallets, you can improve your payment acceptance and make it easier for customers to shop with you.
Offer Payment Installation Plans
Offering customers the ability to pay in installments can be a great way to improve payment acceptance. By allowing customers to pay in installments, they’ll be more likely to purchase because they won’t have to pay the total amount upfront. You can easily set up a payment installment plan with a payment gateway or a payment processor.
Offer Subscription Payments
Subscription payments are becoming increasingly popular and are a great way to improve payment acceptance. By offering customers the ability to pay for your product or service on a subscription basis, you’ll be able to make it easier for them to pay over time. You can easily set up a subscription payment plan with a payment gateway or a payment processor.
Offer Discounts for Early Payment
Offering customers discounts for early payment can be a great way to improve payment acceptance. Offering customers discounts will make them more likely to pay sooner, which will help you improve cash flow. You can easily set up a system to offer discounts for early payment with a payment gateway or a payment processor.
Offer Mobile Payments
Mobile payments are becoming increasingly popular, and offering customers the ability to pay with their mobile devices can be a great way to improve payment acceptance. By offering customers the ability to pay with their mobile devices, you’ll make it easier for them to make payments on the go. You can easily set up a mobile payment system with a payment gateway or a payment processor.
Offer Loyalty Programs
Loyalty programs can be a fantastic way to improve payment acceptance. By offering customers loyalty programs, you’ll be able to reward them for making repeat purchases and encourage them to keep coming back.
You can easily set up a loyalty program with a payment gateway or a payment processor.
Offer Gift Cards
Gift cards are an excellent way to improve payment acceptance. By offering customers the ability to purchase gift cards, they’ll be able to use them to make payments for your product or service. You can easily set up a system to offer gift cards with a payment gateway or a payment processor.
Offer Affiliate Programs
Affiliate programs are a perfect idea to improve payment acceptance. By offering customers the ability to become affiliates and promote your product or service, you’ll be able to increase sales and improve payment acceptance. You can easily set up an affiliate program with a payment gateway or a payment processor.
Provide Clear Payment Terms
It’s crucial to provide customers with clear payment terms to improve payment acceptance. Make sure that customers understand when they need to make their payment and provide customers with clear instructions on how to make their payment and any fees that may be associated with the payment.
How Whop Marketplace Can Help
If you’re seeking a marketplace that will work with your SaaS subscription tools and payment acceptance system, Whop can help. Whop Marketplace allows SaaS businesses and software developers to link subscription management platforms in a single subscription billing platform.
It's perfect for:
- managing your digital storefront,
- handling subscription billing services,
- monitoring recurring payments,
- boosting customer relationships.
With us you don’t have to worry about the lengthy process of setting up and managing a payment acceptance system and it's various features. Whop allows businesses to accept payments efficiently and boost their acceptance rate to ensure customers are satisfied with the payment journey.