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What is SaaS -- and Why is it Necessary for Payments?

By Bob Bennett

If you have ever purchased software for your organization, you have likely heard the term SaaS, or Software as a Service, used to describe a variety of solutions. SaaS, or Software as a Service, is a licensing and delivery model that offers customers all the benefits of an application without requiring continuous software upkeep by in-house staff or a third party. SaaS applications deliver the latest and greatest through the Internet to a computer or mobile device.

Think of SaaS like owning a car that never gets old, because you’re always driving the latest version. Upgrades and enhancements happen automatically, without you having to download patches or new versions. Examples of true SaaS software applications are Netflix, Instagram, or Expedia -- to name a few. You can access any of these tools from your computer or mobile device, and you will always receive the latest version available to the general public.

To take advantage of the growing client demand for this model, many software providers claim to deliver SaaS applications, when, in reality, they are offering a traditional hosted or on-premises software solution with web-based access. Software cannot be “hosted” and be true SaaS because “hosted” software supports a single client. True SaaS is multi-tenanted, with a single instance.

When it comes to Electronic Bill Presentment and Payment (EBPP) platforms, it’s important to identify and value the key advantages of a SaaS solution versus on-premises or hosted platforms. The reality is that hosted and/or on-premises solutions cost organizations more to operate and maintain before even considering the investments necessary to innovate, stay current with technology, and defend against security threats.

Why Payments Need SaaS

what is saas

With SaaS, your software is always up to date with the latest features because rolling out new improvements does not require any changes to the code or data structure. This saves a tremendous amount of time and effort for your organization, and ensures you are always offering the most innovative solution to your customers.

While SaaS solutions are beneficial across almost any industry or business function, there are a few key characteristics of payments that make SaaS the best delivery model. These include:

  • Seasonality of payments and the need to scale quickly
  • Pace of industry innovations
  • Importance of security and maintaining compliance

Seasonality and the Need for Scale

Depending on your billing frequency, payments and collections are often seasonal. This means your organization needs the ability to scale up quickly and cost-effectively. Since true SaaS uses configuration rather than customization, it's easy to scale the solution to meet your business needs. At Invoice Cloud, we enable configuration through on/off switches that allow your organization (or Invoice Cloud’s implementation team on your behalf) to configure the services you offer to your customers.

Pace of Innovation

Your industry is changing rapidly, and your organization needs the ability to keep up with new technologies. True SaaS delivers continuous improvement and requires no maintenance on your part. Since only one version of the software exists, it is simple and straightforward to roll out frequent and concurrent upgrades -- so all clients are always current.

Importance of Security and Compliance

Ensuring the security of customer data is one of the most important tasks for an organization. And when it comes to payments, making sure you have the latest security patches to remain compliant with industry standards is critical. Multi-tenant architecture creates a single instance of a software application that serves multiple customers, as opposed to a single tenant model hosted in the cloud. Client data is secured in individually partitioned databases, providing superior performance and maintenance while the entire application is wrapped and monitored in a secure environment.

Finding the Right SaaS Solution for your Organization

When it comes to selecting any software solution for your organization, it’s important to understand and evaluate the claims providers are making. True SaaS software offers scalable, highly configurable and innovative solutions that continuously deliver value. These solutions enable your organization to provide your customers with the experience they are looking for as their needs change, while also addressing the unique characteristics of billing and payments. The challenge, however, is that many organizations will claim to offer the benefits of SaaS without providing a true SaaS solution – which can create headaches and costly issues for your organization.

To learn more about the benefits of a true SaaS solution – and how to differentiate between SaaS and on-premises or hosted delivery models – download our ebook below.

the benefits of software as a service ebook

To learn more about how Invoice Cloud’s true SaaS solution can deliver impactful business results for your organization, schedule a demo today.

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