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Guide to Payment as a Service

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJan 20232 min read

You’ve probably heard of SaaS, but what is PaaS? This stands for Payment as a Service. Online payments technology has taken a leap forward in recent years, with businesses and consumers alike demanding faster, more secure payment options. Payment as a Service providers offer cloud-based payment processing, with smarter solutions for small businesses.

What is Payments as a Service (PaaS)?

Payment as a Service providers design cloud-based platforms. These combine a variety of different specialised services under one umbrella. Rather than outsourcing the entire payments stack, customers can pick and choose the services they want.

While traditional payment processors offer an all-in-one solution with little opportunity for customisation, these operate differently. Payment as a Service examples include features like cross-border transactions, ecommerce gateways, payments clearing, card issuing, and others. You can decide which features you need, and only pay for them rather than the full suite. The aim is to use technology in such a way that businesses can handle high transaction volumes faster and at lower cost.

How does Payment as a Service work?

While every solution is different, generally PaaS platforms allow financial services providers to pass on advanced payment products to their customers at lower cost. There’s no need to pay for internal investment or a full-scale solution. Instead, businesses can pick and choose what they want to offer with greater flexibility. PaaS enables them to pass on these products through third-party, cloud-based platforms.

These types of services work using payment rails to work behind the scenes. They can handle all the aspects of providing payment services, breaking down barriers between merchant and payment processor. A PaaS platform handles storage, networking, servers, runtime, and the operating system. This means that financial service providers only need to think about the data itself and the applications they’ll need. There’s no need to purchase separate hardware, cutting costs.

Payment as a Service platform benefits

Small businesses can reap the benefits of PaaS providers, both in terms of cost and convenience. This technology allows organisations to access the latest tech toolkit without breaking the bank. Because you can pick and choose the services you want, you can focus on the most relevant features. You also save money on hardware and hosting infrastructure, with everything stored in the cloud.

Another benefit is that Payment as a Service platforms can help you process high volumes of transactions. It’s a scalable solution for small businesses that might just be getting started. While traditional payment hubs can take years to develop and bring to market, with PaaS you can bring your product to market in a matter of weeks.

What to look for in a Payments as a Service provider

As with other payment gateways, not all Payments as a Service providers are created equally. When comparing options, you should consider the following features.

Fraud and risk management tools to ensure compliance with all Australian regulations
Cloud-based infrastructure for better speed and reliability
Real-time payment processing for better customer service
ISO 20022 for global standardisation when processing data
Data reporting and analytics capabilities using the latest AI and machine learning technology
Open APIs for easy integration with your existing systems

When it comes to convenient, customisable payment solutions for businesses and enterprises alike, GoCardless can help. We offer recurring and one-off payments using a direct debit solution. It’s easy to get started, as we handle the bank relationships and all compliance issues. Businesses retain full control and visibility over incoming payments. We also offer hosted, high converting checkout pages as well as a custom API. With the latest PaaS platforms, use technology to bring your payment services to the next level.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.