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B2B Marketing
June 9, 2023

Monetizing Payments for SaaS Platforms: How Does Payment Processing Work?

We’re breaking down how money is actually made through payment processing. 

What happens when a card is charged? In episode three of the nine-part video series, James offers a behind-the-scenes look at payment processing, using his self-storage management software, CCStorage, as a real-world example. Check out the entire episode at the video link below, or read on for a quick recap!


Using the following scenario to set the stage, let’s take a look at where the money actually goes during a transaction:

Imagine you’re renting a self-storage unit for $100 per month. After signing the lease, you receive a welcome email from the self-storage management company, sent through CCStorage, the email contains a link to a secure portal, granting you easy access to your invoices and enabling you to quickly set up recurring payments. By simply entering your card details into a web form, you can rest assured that you will be automatically charged, eliminating any worries about missed payments or manual transactions. 

Behind-the-Scenes Breakdown

Now, let’s take a closer look at what’s actually going on when you enter your card information:

For security reasons, the self-storage provider does not store this sensitive data on its servers. Instead, they leverage Tilled’s APIs to generate secure web forms for card transactions that, in the above scenario, you use to enter your card information. Tilled then immediately tokenizes your card information, providing a token unique to you as the cardholder. This token can then be communicated to Tilled, essentially providing instructions for how often and how much your card should be charged. Once Tilled does process the payment, they’ll then communicate the result back to the self-storage provider, confirming either a successful charge or a declined payment.

Where does the money go?

It’s important to note that the self-storage company does not receive the full $100 from your payment. Payment processing involves various fees that impact the property owner’s profitability. On a $100 transaction, the property owner has hard costs of around two to four dollars on average th But how much of that is profit and how much of that is cost? 

During a transaction, you’ll incur a handful of small fees, from interchange rates set by the issuing bank to card-brand fees. Here’s a high-level look at the total fees incurred during a transaction depending on the type of payment you’re accepting:

  1. Credit Cards: Accepting credit cards in the United States typically incurs a fee of around 2%. For business-to-business (B2B) credit cards, the fee can be slightly higher.
  2. Debit Cards: Processing fees for debit cards are typically lower, averaging under 1%.
  3. ACH: This method incurs a per-item fee, which is typically less expensive than processing via a debit card. 

Enhancing Profitability: 

Despite the fees associated with payment processing, accepting card payments as an ISV can be highly profitable – especially when you embed payments through Tilled. By leveraging a one-time API integration with Tilled, you can begin capturing a portion of the processing volume that would otherwise go straight to your payment processor’s pocket. On average, this translates to collecting 1-2% of the entire processing volume passing through your platform.  Now sure, some of that money goes back to the payment processor, but the gist is that there’s money to be made and the potential for increased profitability is substantial.


If you’re ready to embrace Tilled’s API integration and unlock substantial additional revenue streams, the Tilled team can’t wait to hear from you. Contact a member of our team using one of the following links: 

  1. If you’re an ISV interested in embedding payments into your platform, click here.
  2. If you’re an ISO agent looking to refer an ISV, email partners@tilled.com. 
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