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It is no secret that technology has made our lives easier in many ways. One apparent improvement is in how it has eased our fear of online transactions. And we can thank SaaS businesses for this and other improvements in our daily digital activities.
Online businesses have gained a lot from SaaS businesses and their digital services. Most service companies use subscription-based payment software on their platforms. Even eCommerce stores cannot do without them, and this goes to show how influential SaaS companies are.
Therefore, if SaaS services are so essential in everyday business, is it evident in their growth? And if so, how do they influence B2B payments? In this article, we will dissect SaaS businesses’ involvement in adopting B2B payments.
As it became apparent that tech was the new oil, many business people strived to gain a foothold in the market, no matter if they were a college essay writing service or an accounting team. The COVID-19 pandemic further influenced that development, and companies that delivered solutions on the spot (backed by cloud-based approaches) thrived better than those providing them on-promise.
About 13 years ago, only 12% of companies had any cloud support; businesses were still using local software for their operations. Today, 61% of companies have moved most of their workload to the cloud. Therefore, it isn’t surprising that most of the money spent on IT in 2021 has gone towards cloud computing, and the cloud public service market could grow by $25 billion from 2020.
But what has all this to do with B2B payments? To answer that question convincingly, we must first understand B2B payments.
B2B (Business to Business) payments refer to the payment methods adopted when two companies transact. They are more complex than transactions between businesses and clients (B2C) and between two individuals (P2P).
Yes, paper money and checks still play significant roles in payments between companies. But innovation has brought faster and more efficient payment processes to the fore. These processes improve transaction speeds and cash flow, which is why SaaS companies back them.
There are several types of B2B payments, and some of them are:
1. Credit cards – this is a Chip and Pin technology that allows people and businesses to pay for services conveniently and cheaply. This payment option gives users access to extra money, although it attracts interest.
2. Digital Payment Platforms – these platforms allow users to send and receive money to digital wallets without dipping into bank accounts. Other popular digital payment platforms are PayPal, Payoneer, Google Pay, and Skrill.
3. Automated Clearing House – this payment mode allows for transactions using bank accounts and routing numbers. It is simple, quick, and efficient and is ideal for making repetitive B2B payments. Its cheapness also makes it a first-choice for businesses.
As you can see, B2B payments thrive on their security, convenience, and speed. Those factors drive customer adoption rates. But to achieve them, companies must look to the SaaS industry to facilitate instant worldwide transactions.
Naturally, with an increase in demand for any product or service comes a surge in supply. The same applies to the link between SaaS businesses and online payments, particularly in B2B transactions. Some ways SaaS business proliferation affected B2B payments include the following:
As more SaaS companies spring up, online B2B payments become more widely accepted due to the advantages arising from competition-fuelled innovation. For instance, we know that Apple and Google are breaking into the SaaS industry. And Chip and PIN technology were doing fine until mobile payment technology (Paym) appeared in 2014. But as soon as these companies saw the potential in that innovation, they snapped it up, with Apple Pay being a famous example. Other cases where competition between SaaS companies helped propel the polishing and adoption of B2B online payments.
Today, B2B SaaS startups compete for the attention of angel investors and venture capitalists. These people recognize the potential for growth and profit-making in the industry. And as they acquire or invest in companies, their actions will convince more businesses to adopt online payments for B2B transactions. This acquisition cycle and other factors, like how well companies manage their average contract value, deal velocity, etc., also boost SaaS sales.
The fact that corporate clients are becoming more inseparable from SaaS services also promotes B2B payments. SaaS companies champion digital payment systems, and expectedly, use them too. And since other businesses need SaaS services to function in today’s cloud-controlled world, they must adopt B2B payments to facilitate their transactions. And when enterprises use SaaS companies’ B2B payment options, it helps them increase revenue and maximize profits.
There’s no avoiding the fact that digital solutions are replacing older ones. But for now, B2B payments still accommodate legacy transactions involving cash and paper checks. However, digital options are becoming more popular thanks to the increase in SaaS businesses to drive innovation. And if current trends are anything to go by, B2B payments will continue to grow alongside SaaS businesses serving global financial needs.
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