In the fast-paced world of Software as a Service (SaaS), innovation is the currency of success. Without innovation, companies will be overtaken by competition or new players in the market, and with the number of competitors at an average of 9.7, innovation is more important than ever for SaaS companies.
The SaaS industry is experiencing significant growth, with the global market projected to expand from $240 billion in 2022 to $374 billion by 2026. While SaaS companies focus on delivering cutting-edge solutions to their clients, their payment infrastructures lag behind, burdened by inefficiencies and high fees. In a recent study, 85% of participants believed introducing more flexible customer payment choices could substantially decrease churn.
Traditional banking channels used for cross-border payments globally dominate newer and more efficient solutions. As of 2023, banks handled approximately 92% of global B2B cross-border payments, amounting to $27 trillion in transactions. This highlights the continued reliance on traditional banking systems for international transactions.
Enter crypto, the solution for maximising cost-savings and efficiencies. Crypto payments can provide SaaS providers with a competitive edge in an increasingly globalised and competitive market. But with adoption so low currently, why should SaaS companies leap and diversify their payment solutions?
Streamlining costs and accelerating cash flow
Traditional payment methods often involve costly intermediaries, currency conversion fees, and delays, especially in cross-border transactions. The average cost of sending a $200 cross-border payment through traditional methods is 6.3%, while crypto fees are typically between 1-2% and sometimes lower. These inefficiencies can erode profits for SaaS companies that operate on subscription models or handle large volumes of microtransactions. Crypto enables direct, peer-to-peer transactions that eliminate intermediaries, significantly reducing transaction costs and accelerating cash flow. Payments made in crypto settle almost instantly, ensuring that SaaS providers can access their funds faster and reinvest them into growth initiatives.
Unlocking global opportunities
The global cross-border payments market is expected to grow from US $160 billion to $345.42 billion by 2033, reflecting the expanding opportunities for businesses operating internationally. However, traditional banking systems remain inaccessible to millions of businesses in emerging markets due to infrastructural barriers or challenges. For example, around 70% of African countries are facing an FX shortage, causing a slowdown in the operation of businesses throughout the region. Crypto payments bridge this gap, providing SaaS companies with access to underserved markets where businesses and individuals may lack conventional banking access but have internet connectivity.
By integrating a crypto payment gateway, SaaS companies can offer their services to a broader audience, fostering inclusivity and ensuring seamless access to global markets.
Enhancing transparency
Trust is a cornerstone of the SaaS business model – no matter how good your product is, without trust people will not buy it – and crypto payments enhance that trust through their inherent transparency and security. Transactions recorded using blockchain technology are immutable and verifiable, reducing the risks of fraud and chargebacks that often plague traditional payment systems. This level of security builds confidence among customers and strengthens the brand reputation of SaaS providers, particularly in industries where sensitive data and financial transactions are paramount.
Capitalising on growth potential
The global crypto payment market is projected to grow at a compound annual growth rate (CAGR) of 17% by 2030, highlighting immense untapped potential for early adopters. SaaS companies that integrate crypto payments can position themselves as forward-thinking, tech-savvy innovators, which could give them a competitive edge over slower-moving competitors. Early adoption also could allow these companies to attract and retain crypto-savvy customers, particularly in the B2B space, where tech-forward partners increasingly value payment flexibility.
Empowering SaaS with tailored solutions
Crypto payments offer tailored solutions for SaaS companies looking to harness the benefits of crypto payments. With seamless integration, multi-currency support, and advanced security features, crypto enables SaaS providers to modernise their payment systems without disrupting their existing workflows.
While the SaaS industry is rapidly growing, the existing cross-border payment infrastructure presents challenges that could impede seamless international operations. This has already been seen in Latin America, where high costs of intermediation, processing cut-off times, and lack of interoperability between systems have made cross-border trade challenging. Addressing these issues is crucial for SaaS companies aiming to expand their global reach and enhance operational efficiency.
The SaaS industry is not alone in thriving on efficiency, innovation, and customer-centric solutions. However, by adopting crypto payments, SaaS companies can align their payment processes with these core principles, ensuring long-term growth, customer satisfaction, and a stronger competitive position in the market. Leveraging crypto in SaaS is a matter of not if but when, with more education on the subject, and crypto becoming more accessible, regulated, and trusted as an innovative payment solution.
Can Taner, CPO, Bitpace
originally published on financederivative.com