Category: Blog

Calculating your Software Company’s Payments Revenue

Most Software companies find Payment Processing an opaque, confusing, and distracting business.

For instance, our Software partners often find Payments economics extremely murky. We’ve been in the shoes of our Partners and recognize that learning payments the “hard way” is not fun. As a result, we are passionate about shortening the learning curve for our Partners. Firstly, we want our Partners to truly understand how they are deriving their payments revenue. Secondly, we want them to understand how to maximize their payments revenue. Lastly, we want our partners to leverage Payments to enhance their product and customer experience.  

Here’s a simple heuristic to help Software companies calculate their latent payments revenue. This first iteration is for receivables, or what we call “Pay-In”. Stay tuned for expanded versions that incorporate different pricing strategies, interchange optimization, convenience fee scenarios and more. We’ll also be releasing a Payouts calculator showing economics for Card Issuing, Push to Card, Real Time Payments, ACH and more.

Give it a whirl and send us your feedback!  


Variable Descriptors

 

  • Monthly Processing Volume: The approximate amount of Credit Card volume ran per merchant. ACH and other payment types will be coming in V2! 

 

  • # of Transactions: This is the Average number of Credit Card transactions per merchant per month. 

 

  • Rate Charged: You can employ various pricing models and strategies for different use-cases and scenarios, however we’re sticking to a simple Flat-Rate pricing model for this calculator. 


  • Auth Fee Charged: The Auth Fee, short for Authorization Fee, is a per transaction fee charged to the end merchant. Market rate is usually between $.10 and $.30. 


  • Revenue Shared: What’s your revenue split with  your payments “backbone”? Our goal is to make payments a primary revenue driver. Contact Sales for details on our lucrative rev-share programs!

 

  • Interchange Rate: Interchange is a “wholesale” cost of processing charged by the Card Issuing Bank. There are hundreds of Interchange categories influenced by various factors. There’s a lot of great articles online detailing Interchange, but we personally like this one from CardFellow. 

 

  • Buy Rate: Buy Rate is a loaded term. In this calculator we define it as the discount percentage markup that you pay to your payments backbone.  Buy Rates are covered before they start to share revenue with you. Because of this incongruence we’re not huge fans of Buy Rates. 

 

  • Dues & Assessments: Dues & Assessments are also “wholesale” costs charged by the Card Associations, however we’re limiting this to Assessments for simplicity. There’s a number of other nominal fees within this category.

What Culture Means to Us

Culture. This single word is talked about extensively and we believe it should be, because it is important. The world is changing and it’s important to recognize that we have to change and evolve with the times. Great talent is motivated by more than money, they want a stimulating endeavor to work on and they want to be surrounding by impassioned colleagues. It all starts with identifying what culture means to your organization and hiring great people to fit that dynamic.

Payabli defines a great culture as a place where team members love coming into work every day and have a hand in solving big problems. The big problem we are solving is to make it easier for businesses to pay, get paid and in that process let them take over their payment stack. We strive to attract team members that look forward to Monday mornings, ready to do great work and tackle big challenges with their team members. We strive to create an environment where they feel empowered, a place where their voice counts, and a place where their direct efforts impact the well being of everyone on the team and our customers.

Culture is incredibly important at a startup stage all the way through its maturing process. We think a lot about what core responsibilities our company has towards our team. As a result we always come back to learning and why we believe a great culture should embrace continued education. This education can come in any shape or form with the ultimate emphasis on ensuring our team members are learning something they will get satisfaction and grow. Perhaps the learning comes in the form of a coding course, reading a book on just about anything, learning how to sail, how to sketch, how to produce movies, etc. Ultimately we hope our team strive to learn and we believe that satisfaction is priceless.

There is a lot more to share on culture, and we look forward to challenging ourselves on how we can do better.

We look forward to sharing more on this important subject.

Our Guiding Principles- Things that matter

We think it is important to share something dear to our hearts as it gives us our purpose.

Things that matter to us (Our Guiding Principles):

We want a vibrant culture where employees love coming to work every single day

  • At Payabli, employees treat each other with respect, can prosper monetarily, and are constantly learning and achieving self efficacy   
  • Employees form strong friendships with colleagues
  • A sound work-life balance is not encouraged it’s required
  • We hire good people: integrity, intelligence, fun, and caring are qualities we seek out in employees
  • We want all of our employees to be successful in numerous facets of life; we will invest in their development with programs such as: 
      • Personal Finance and money management 
      • Fitness and mindfulness 
      • Goal fulfillment and self efficacy 
      • Continued education
      • Giving back

We want to woo our customers and in turn we want them to write us love letters

  • We purposely go out of our way to make clients feel loved
  • Employees are guided by wanting rather than needing to help, going above and beyond to serve customers comes as second nature 
  • We use the Payabli “Deal Paradigm” as a blueprint for every partnership: Fair share of value, proportional share of risk, and alignment of upside incentive
  • We are selective with which customers we take on, quality is more valued than quantity

We want to build a sustainable organization that has a strong sense of purpose and is long term in thinking 

  • We want our reputation to proceed ourselves and as a result be the premier PAAS (Payments as a Service) product in the Industry 
  • We want to be a “Small Giant” where we have control of our destiny and to not cave to external pressures to grow and compete   
  • We covet and protect our reputation our word is bond

Empowering Software with Payments

Hello World,

We are ready to claim our part of the universe. We are on a mission to help software companies and merchants take over their payment stacks. For a long time we felt software companies and merchants have not been able to see under the hood of what makes payments great for their business; as a result we want to change this. We have a goal to help software companies move money with developer friendly tools and embedded elegant user experiences. We believe payments should be easy to implement, secure, and a rewarding experience.

Mission:

Payabli’s mission is to unlock the value of payments within SaaS Provides and Independent Software Vendors (ISVs) ecosystems by providing a substantial revenue driver, appreciating portfolio asset, and inherent product value to their customers, in turn fostering stickier relationships with their respective customer bases.

Vision:

To unlock immense value for software providers pennies at a time.

Jo- Co-Founder
Payabli