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Are You Monetizing Payments for Maximum Returns?

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 Understanding and Implementing the Right Monetization Model is Vital

TSG’s AIM analytics platform shows that payment processing profitability is 36 basis points higher among merchants processing through a payments-embedded SaaS platform than for non-embedded merchants. 

Monetizing these payments is clearly attractive for SaaS platforms and implementing the right model with your processing partner is pivotal for long-term growth strategies. 

As an independent, third-party voice, TSG is focused on supporting SaaS platforms and their investors through this process. As the business grows, SaaS platforms should routinely evaluate their model to determine if there is an opportunity to further expand and optimize their payments program. 

Models at a Glance

The chart below shows the progression of most payment models as the SaaS’s business and volume grows over time. 

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Models in Detail

The table below shows how responsibilities are often distributed among key stakeholders in each monetization model. Note that roles and contracts can vary on a case-by-case basis and lines can blur between players. Download sharable PDF.

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TSG provides insight throughout an investment’s lifecycle: pre–LOI, due diligence, post-close strategy implementation, maturation cycle, and exit.  

Check out the case study below, and contact us to speak with one of our payments monetization experts. 

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The client: A SaaS platform processing billions of dollars annually with no experience in payment processing.  

The goal: The SaaS platform wanted to provide an integrated payment solution with a seamless customer experience to increase tenure, and augment revenue. 

Our process:  

  • Education: we provided detailed context and payments education to the board of directors, executive management, product team and the technology group.  
  • Discovery: we reviewed the technology, market, and strategy. 
  • Assessment: We evaluated offerings from payment service provider, including partnership structure, sales support, customer service, technology offering, and value.  
  • Implementation: we provided onsite support to enable the client to implement their new payments solution immediately while they were building out a team to support it. 
  • Support: we provided ongoing strategic and tactical support on pricing, sales operations, technology enhancements, and seamless product integration. 

The result: recurring revenue exceeding $10 million was generated in under 12 months from inception.