Why 81% of SMBs Are Ditching Old Payment Systems

As small businesses seek seamless payment solutions, the rise of integrated payments is transforming the industry and reshaping revenue models.

Welcome to Today in Payments, todays blog is guest-hosted by James Shepherd, here with your daily dose of payment notes.

Growing Adoption of Integrated Payments

A report from PYMNTS.com states that 81% of small and mid-sized businesses (SMBs) are open to adopting integrated payments. Many businesses currently rely on fragmented payment systems, requiring multiple platforms to manage vendor transactions. This inefficiency has led to increased demand for streamlined solutions that consolidate operations and integrate payments into a single platform.

The Shift in Payment Monetization

Traditionally, software companies generated revenue through subscription-based SaaS fees. However, an industry-wide shift is occurring, with companies increasingly monetizing payment processing instead of charging high SaaS fees. Some providers are eliminating software costs altogether, generating revenue through transaction fees instead. This model allows businesses to access powerful software without upfront costs, making adoption easier and more appealing.

The Competitive Advantage of Free Software

Cost remains a key factor for businesses evaluating new payment systems. Companies that offer free software with integrated payments provide a compelling alternative to costly standalone platforms. Additionally, compliant pricing models—such as surcharging, dual pricing, and cash discounting—help businesses offset payment processing costs while improving adoption rates. This approach increases accessibility and encourages SMBs to transition to more efficient, integrated systems.

Proven Market Success

Several companies have successfully implemented this model. For example, CC Storage, a self-storage management software provider, offers its platform for free while generating revenue from payment processing. This strategy lowers financial barriers for business owners and increases platform adoption. The model is gaining traction across various industries, as companies recognize the long-term benefits of integrating payments into their software solutions.

Future Implications for the Payment Industry

The payments industry is undergoing rapid transformation, with integrated solutions becoming a dominant trend. As SMBs prioritize cost-effective and efficient platforms, companies that embrace integrated payments will gain a significant competitive advantage. The shift toward transaction-based revenue models is expected to continue, driving further innovation in payment technology and software integration.

Closing Thoughts

That’s it for today in payments! Keep coming back every weekday for your daily dose of payments notes.