Another possibility for handling B2B payments is to use a payment processor. But these tools are not necessarily well suited to the needs of global SaaS sales.
First, payment processors are typically limited to lower transaction values. If your business routinely handles higher-value transactions, you'll need an alternative B2B payment solution to avoid card payment failures.
Handling self-serve payments comes with added complexity, as it also requires taking care of subscriptions, different currencies, fraud, and sales tax compliance around the world.
What's more, as they’re not specifically designed for SaaS companies, payment processors come with limitations that can affect payment performance. These include problems with payment routing, dunning, and SaaS logic.
Also, the major challenge of global sales tax compliance doesn't go away when using a payment processor. You'll still be fully liable for registering, filing, and remitting sales taxes globally – with severe penalties for error!
And finally, a payment processor forms just one part of your revenue delivery pipeline. It may seem cheap on its own, but costs soon stack up when you must factor in other essential tools.
Let's examine the pros and cons of major competitors in the payment processor space.
PayPal is a popular and trusted digital payment method, especially in the B2C market. In fact, it's Europe’s preferred way to pay online.
If you’re processing recurring payments from midmarket and enterprise companies, PayPal’s popularity means you can't avoid using it.
Most companies use PayPal alongside another payment gateway to offer more payment choices. That means another tool to pay for, on top of PayPal itself, Stripe being a popular option.
One major drawback, though, is PayPal’s lack of integration with Stripe, which means you'll have to manage this manually. That creates a burden on your engineering team and means you won't have a single source of truth for revenue data.
Another thing to bear in mind is PayPal’s customer subscription cancellation feature. It’s a risk factor for SaaS companies because it lets customers stop their subscriptions from within PayPal, rather than via your cancellation flow, creating a whole new source of potential churn.
A close competitor to PayPal, Stripe allows you to integrate payments, approve or decline transactions, and connect your acquiring bank to your customers’ issuing banks – without creating a separate merchant account.
Stripe is easy to integrate with other tools in the revenue delivery pipeline, thanks to its developer-friendly APIs.
But one area where Stripe falls short is its lack of integration with PayPal. You'll end up using the two tools separately, dealing with siloed data and added setup burden.
Stripe doesn't have any buyer support, nor does it handle sales tax compliance. That weighty burden still falls on you.
Like other SaaS payment processing tools, Stripe forms just one part of the revenue delivery infrastructure. Handling subscription, localization, and tax compliance will still be up to you.
If you’re running an enterprise-level SaaS company, Adyen could be a good choice for a B2B payment processing solution.
Its powerful payment features make it a good fit for large businesses with dedicated engineering teams to manage and maintain their revenue infrastructure. Adyen offers adjustable fees based on the volume of payments.
Adyen has flexible APIs for a range of integrations, along with extensive supporting documentation. The downside is that your engineering team will spend a lot of time handling it, which makes it less of a great fit for startups and small businesses.
Another thing to note, just like other single payment gateways like Stripe, Adyen lacks the capability to re-route failing payments between multiple providers – lowering the chance of payments being successful.
Recently acquired by PayPal, Braintree is a payment gateway designed for taking online payments. The acquisition means Braintree has native integration with PayPal, making it a good fit for selling to B2C and lower-priced B2B – especially in European markets where PayPal is strongly preferred.
On the downside, Braintree still lacks the capability to route electronic payments through multiple providers. In addition, it only handles the payments aspect of a revenue delivery strategy. You'll still need to deal with subscription billing, analytics, and localization issues, while still being liable for global sales tax compliance.
This fast-growing payment service is mainly used by midmarket and enterprise companies. Checkout.com’s recent acquisition of ProcessOut means it can now offer payment routing, making it stand out from the competitors. There’s an extensive choice of payment methods available, along with transparent pricing.
Despite these benefits, Checkout.com is still only a payment service. It doesn't handle any other aspects of the revenue delivery pipeline, such as sales tax compliance, data, or flexible subscriptions. What's more, Checkout.com’s manual approach can be time and resource-heavy.