What Do These Tools Do?
In the past, buying software was different. Customers paid for the license, and they got a hard copy of the software or the credentials to download a product. However, things are different today with all the variables, add-ons, subscriptions, recurring payments, and different plans.
That’s where SaaS billing systems come into play. These systems help you take care of all your payment needs via a single platform. It checks all the accounts you have active, lets people make their recurring payments, extend subscriptions, and so on.
Companies use a straightforward interface to administer all payment functions and integrate any solutions that they might need.
Types of SaaS Billing Systems
First of all, not all SaaS billing systems are created equal. There are three main types including:
- Merchant account systems
- Payment gateways
- Subscription systems
1. Merchant account systems
As a business, you need to have your own merchant account. That’s the only way to receive legit payments as a service provider. Not all billing systems have merchant accounts, and you should definitely look for one that does.
2. Payment gateways
These systems are designed to make transactions between issuing and merchant banks secure. It handles the communication between two banks. Simply put, it can give information on how much the customer needs to pay for a service and processes the transaction.
3. Subscription systems
These systems are essential if you have a subscription model. They let you manage all kinds of specifics, including different plans, downgrade or upgrades, discounts, different subscriptions in terms of length, and so on.
Even though these are the three different types of billing systems, there are solutions that offer all of them at once.