In the age of XaaS—Everything as a Service—organizations are responsible for payments to several outside services. Analysis from the startup Blissfully found that the average company with 200 to 500 employees used 123 SaaS applications in 2018. Every year, SaaS spending and adoption grows across companies of all sizes, and in 2018, the average company spent $343,000 on SaaS—a 78 percent increase over the previous year. All these services are paid for online, which means online payment security needs to be top of mind.
Businesses embrace SaaS applications because they offer lower costs, scalability, integration, regular upgrades, accessibility, and ease of use. However, all of those SaaS applications have to be paid for, and each has its own billing cycle. Some may bill on a 30-day cycle, while others may bill by the quarter—and the details of how the payments go through can vary. In addition, organizations also have to keep up with their usual transactional responsibilities, such as moving funds around and paying rent, utilities, and wages.
XaaS is an enormous area of operations, and companies will often have whole departments dedicated to handling these matters. Even then, all the complexity and fragmentation can make it easy for issues to fall through the cracks. For instance, Blissfully found that 71 percent of companies have at least one SaaS subscription with no billing owner.
This is why many businesses choose to pay for these expenses online through a third party. But there are benefits and risks associated with making online payments. To minimize the risks, organizations have to work with providers who can guarantee secure payment processing.
Benefits and risks associated with online payments
There are many upsides to paying for XaaS expenses via a third party. Perhaps the most salient one is convenience. Relying on a third party to handle expenses can reduce your company’s operational workload so you can focus your attention on more business-critical matters. Instead of juggling payments for 100 SaaS applications, your organization would only have to pay one third party, who would take care of the rest. This can make a large SaaS stack considerably more sustainable.
In addition, working with third parties that automate payments can provide peace of mind because you will know that all the bills are being paid on time. Another benefit is visibility, as online payments make records accessible, which can enable stakeholders and auditors to stay on top of expenses.
However, there are risks as well, and most of the risks are security-related. Online payment security is key because if an application goes down or becomes compromised you could face financial losses, a dip in customer confidence, or stoppages in your critical services. You can’t afford to sacrifice secure payment processing for convenience.
How to improve online payment security
There are a number of steps companies can take to reduce these risks and keep their finances and networks safe from bad actors. One is implementing strong authentication protocols. It’s important to limit who has access to what and to ensure that employees and third parties who have access to your accounts are using secure passwords.
Measures like two-factor authentication have traditionally been effective safeguards against stolen credentials, and given the volume and scale of leaks that have occurred over the past few years—the Equifax breach of 147 million people comes to mind—extra layers of authentication and identity management are now a must-have.
Another way to minimize risks and practice good online payment security is to encrypt all your transactions. According to the PCI Security Standards Council, encryption is the best way to secure payment transaction data because it ensures its protection in transit. Partnering with third parties that offer end-to-end encryption can be especially useful in this regard.
One aspect of online payment security that tends to get overlooked is endpoints like mobile devices, printers, and IoT devices. Business today involves a ton of different endpoints, and this can create serious security concerns. If hackers can break into your network through an unsecured endpoint, they may be able to access your payment systems. Companies need to be proactive about endpoint security and train users to avoid compromised networks. Upgrading outdated devices is another critical step, as devices with baked-in security features, such as HP printers, can keep security tight without adding to IT’s load.
XaaS applications aren’t going anywhere, so businesses must find ways to streamline their management of these services and ensure that online payment security remains top-notch.