For many Software-as-a-Service (SaaS) providers, securing payments from customers can be difficult. Many solutions require customers to register and pay upfront, resulting in high abandonment rates. In other words, customers abandon their digital shopping carts and exit the SaaS provider's website before completing the purchase process.
LaterPay is hoping to solve these problems with the launch of its new LaterPay Pro service. Early adopters include a Microsoft partner that offers Azure-based backup services.
The SaaS Payment Technology
LaterPay’s technology is based on a patented payment infrastructure that enables immediate, frictionless customer access to paid content and services. The new Pro solution is aimed specifically at SaaS providers. Instead of requiring upfront registration and payment, LaterPay Pro defers this process until purchases reach a predetermined threshold, the company asserts.
Take for example Microsoft Germany partner aConTech Enterprise IT Solutions. The firm will now allow its customers to offer Microsoft Azure Backup without those upfront hassles. Customers will only be prompted to register and pay after meeting a 250 euro threshold. As part of this offering, LaterPay will also allow fully flexible threshold amounts on a per-provider basis, the company said.
“With LaterPay Pro, customers can first experience the added value of the services without requiring extensive full registration and payment. For us, this supercharges the onboarding of new, paying customers,” said Stefan Zenkel, managing director of aConTech Enterprise IT Solutions.
A Tested Theory
This isn't LaterPay's first foray into deferred payment business models. Late last year, the company introduced a paywall business model for US media companies - technology built around a similar deferred registration and payment process as this latest offering. When browsing paid content, users are prompted with a number of purchasing options predetermined by the publisher.
Single purchases and time passes are meant to complement the full subscription model by generating incremental revenues while pulling new potential subscribers into the publisher’s ecosystem. Purchased content is aggregated and consumers are only prompted to register and pay once they hit a $5 threshold. By deferring registration and payment until users reach the threshold, LaterPay says it’s able to increase the user’s propensity to pay – 75.5 percent of users register and pay once they reach the threshold.
These new offerings come as the Munich, Germany-headquartered company continues its expansion into the U.S. market.
The company currently has 27 employees and more than 200,000 active and registered users in Germany. In late 2017 the company raised $7.5 million in funding. We'll be watching for more updates and potential adopter news.