A vertical SaaS company partners with PayEngine for advanced payment capabilities, leading to increased monetization, more control, and key insights for data-driven decisions.
SANTA MONICA, Calif., Dec. 20, 2023 /PRNewswire-PRWeb/ -- The Client
The subject of the case study, an exciting restaurant industry start-up, offers a suite of data-driven products designed for restaurants, by people who know the restaurant business. This restaurant SaaS company helps small and mid-size businesses manage their back-end suppliers, which is an often overlooked part of the industry.
Their unique software solutions provide real-time access to expense data from every dollar spent and enable restaurants to gain full control over their cash flow, and supply the tools to optimize it. Growing at a tremendous rate, the client's leaders knew they needed a partner for supporting payments as well as payment operations because this is such a big part of the supply chain process.
The Challenge
The vertical SaaS company helps SMBs to manage their back-end supplies, which is a part of the business equation that is often neglected, with little transparency. This side of the business management brings unique payment challenges: the ticket size and payment size for supplies are much larger than a typical retail purchase, for example. It's not unusual to see $10,000 payments. Invoices between $1,000 and $10,000 could occur in a short timeframe, for example, think beginning of the month supplies.
These non-typical purchasing behaviors also create challenges on the approval and processor side, when processors aren't sure how to categorize payments. This unfortunately leads to reserve requirements that are completely outdated or even unworkable. This is part of the historical reason why these types of payments weren't done via an online system.
Moving to a more electronic system where invoices don't get stale adds tremendous value for the client's customers. However, with that much cash constantly changing hands, they sought to offer more advanced control to their users.
The Work
With the help of PayEngine, the client was able to overcome the hurdles that were impacting their growth, both at an engineering level and at an operational support level. PayEngine was able to set them up with direct processor relationships which was a crucial component in managing supplier transactions and moving the business forward. PayEngine has pre-negotiated best-in-class buy rates at major processors, which allows the client to get to market faster and with ideal rates.
PayEngines' payment expertise was the perfect complement to the organization's vertical expertise, and PayEngine offered a seasoned team of engineers to work on implementation and offer support. The client has also stated that they appreciated the hands-on, constant support, which seemed to be lacking in other potential partners.
According to a client sponsor, a big part of the initial work was learning more about payments beyond the consumer side. PayEngine helped their team to understand the payment sector and where money is to be made, leading to opportunities for increased revenue generation. They add: "I grew up in the restaurant industry and understand the financial complications that come along with it. What I didn't understand was the payments industry beyond consumers. PayEngine was able to make the payments sector make sense to us in a new way. Their knowledge in this space was truly a difference-maker."
Next, the engineering team ramped up and prepared to launch a customized invoice management platform. According to the project sponsor, the PayEngine engineers were "absolutely critical". Their own engineer had no knowledge of payments and the amount of support PayEngine offered was invaluable.
Without PayEngine, the client had hit tremendous blocks from processors, who demanded reserve requirements that made these features a non-starter for the restaurant merchants. PayEngine was able to successfully navigate the complexities of the requirements and make it work. The company's founder had this to say, "Without getting past this hurdle, we could have never have made this product work."
The Results
PayEngine hit the ground running. The vertical SaaS company completed their first payment using the new platform in October, and by February they were completing $50,000 per month. Some highlights:
- Full reserve release of $250k+
- Monthly processing volume from $100k to $850k
- Went from $50k in payments to $1 million in 6 months
- Grew payments by 10x over the first 6 months
- Increased flexibility due to key reporting and insights
- Single source of data for expenses and invoices; one place to pay all suppliers
- Unlimited access to 50+ years of combined payments industry expertise and FinTech experience
Furthermore, they've been able to change pricing structures due to having insight into analytics that were once below the surface. Being able to pull reporting on core statements, payment breakdowns, what core costs are, blended costs, how much money they're making each month, etc. has allowed them to refine pricing on shorter notice for better results.
From the client sponsor: "The ability for us to have monetized payments early on is huge. Investors really like that in this environment. This has allowed us to scale and monetize payments earlier."
The Future
According to client contacts, there is a lot more work to be done to help their rapidly growing organization reach lofty goals. Plans include building up more of a payout infrastructure and achieving more alignment with corporate cards. The companies are working closely to keep the SaaS client's payment cycle shorter and costs lower: they are currently processing about $4 million in invoices, and plan to grow the share completed through the PayEngine system.
In the meantime, the business takes full advantage of the robust support offered by PayEngine. The groups also hold ongoing calls where they review data and rely on their PayEngine representative's in-house payment expertise. Having access to PayEngine's unprecedented level of payments industry expertise, best practices, and support has proven invaluable.
Media Contact
Josh Melick, PayEngine, 1 4157931279, [email protected]
SOURCE PayEngine
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