10 Signs That You Need to Change Your MSP Payment Management Platform

According to Capgemini, ineffective cash flow management may upturn businesses globally. Efficient payment management is necessary as digital payments are estimated to grow at a CAGR of 15% during the forecast period of 2022-2027. Therefore, keeping your MSP ahead of the competition with an up-to-date payment management platform is essential.

A robust payment management platform contributes to sustained business growth. It boosts client satisfaction, enhances cash flow, optimizes financial reporting, and minimizes the risk of fraud. 

This article will list the indicators that your MSP's payment management platform is not optimal. We will also discuss the significant repercussions of subpar payment management and guide you in upgrading it.

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10 Signs It's Time to Change Your MSP Payment Management Platform

Relying on outdated technology can result in inefficiencies, increased manual work, and higher operational costs. Old systems and software lack the essential features to thrive in the digital-first payments environment.

The same applies to your payment management platform. Any overlooked deficiencies in the MSP payment software negatively impact cash flow and might result in missed financial opportunities.

Here are ten signs that indicate your MSP payment management platform needs an upgrade:

Frequent Downtime and Outages

Stripe, a leading payment processing software, experienced a significant outage in July 2019. Users lost up to $100,000 in sales. 

An unreliable payment management platform can mean frequent downtime and outages for your MSP. Payment processing delays result in customer frustration and lost sales, as 41% of businesses say customers may not return.

According to Rapyd, 45% of businesses face cash flow issues due to payment delays. Therefore, the payment management platform must ensure uninterrupted service for you and your clients.

Poor Customer Support

Inefficient customer support is a red flag, as it could leave you struggling with payment processing issues. You may not have access to experts or a reliable support team to resolve any problems that arise.

An MSP payment management platform that lacks prompt customer support can hinder customer relationships and even result in customer loss. According to Airdroid, acquiring a new customer will cost five times more than retaining an existing one. 

A responsive customer support team helps deal with MSP payment issues and ensures uninterrupted transactions. It minimizes potential customer churn and revenue loss.

High Fees and Hidden Charges

Outdated payment management platforms can severely impact your business through high transaction fees and hidden charges that diminish profit margins. 

Due to these fees, businesses often incur additional costs of around 20%. Common hidden charges include credit card payment, ACH transfer, early termination, and chargeback fees​.

Such fees are widespread, and businesses across various sectors face significant financial burdens. For instance, credit card processing fees alone can amount to a substantial percentage of transaction volumes, significantly affecting the bottom line of MSPs that rely on high transaction volumes.

Moreover, the lack of transparency in fee structures makes it challenging for MSPs to predict and manage costs effectively.

By adopting modern, transparent payment management solutions, MSPs can better control and reduce these unnecessary costs, ensuring a clearer understanding of their financial outlays and enhancing overall profitability.

Inflexible Contract Terms

A long-term (or multi-year) contract that prevents switching to a newer payment management platform can cause operational bottlenecks. This also reduces your MSP’s competitiveness by slowing the response to changing market conditions, industry trends, or customer demands.

Long-term contracts limit the flexibility of customizing payment schedules and pricing plans to customers’ changing needs.  In addition, legacy payment platforms can be incompatible with new/current internal systems and may make it difficult to comply with ever-changing security/compliance standards (such as PCI-DSS).

Limited Payment Options

An outdated MSP payment platform limits the available payment methods.

Restricting MSPs from offering flexible payment options restricts customer relations. 86% of B2B customers consider payment terms before selecting a vendor, and 83% abandon a purchase. If your preferred method is not offered, 48% of your clients may churn.

A modern MSP payment management platform provides them access to various payment options such as ACH, credit cards, and flexible financing (similar to buy-now-pay-later options).

For global MSPs, clients from different geographies need the convenience of transacting in their currencies and during their time zones. 

According to PwC, 42% of finance leaders estimate an acceleration in cross-currency B2B payments. You need a modern MSP payment platform that supports multi-currency transactions and automates settlement round-the-clock.

Complicated User Interface and Workflows

An obsolete user interface (UI) that is challenging to navigate leads to confusion and payment delays when customers cannot easily find the required information. 

A complicated workflow also means time-consuming and resource-intensive manual reconciliation for your team. 

Modern payment platforms come with intuitive UIs that make navigating easy for you and your clients. They provide self-service options to clients, giving them access to their previous, outstanding, and upcoming payments, allowing them to manage funds better. Your staff also requires less training to use a system with a simple UI.

Insufficient Security Measures

A payment management platform that does not comply with the latest security standards, such as PCI-DSS, is vulnerable to cyber threats. 

Weak encryption, exposed client credentials, and inadequate network security make it easier for cybercriminals to access sensitive data.

A security breach can severely impact your MSP financial operations. You may have to pay hefty fines ranging from $5,000 to $100,000 per month and suffer irreversible damage to your brand reputation. 

Modern MSP payment management platforms mitigate these risks by safeguarding sensitive client information. They provide advanced security measures like tokenization, encryption, and fraud detection to protect your business information.

Lack of Integration with Other Tools

A legacy MSP payment management platform may not integrate with other essential business tools like PSA and accounting systems. It increases manual workload by hindering the exchange of data between multiple platforms. Frequent manual entries increase the chances of errors.

Integrating MSP payment solutions with accounting tools like QuickBooks and Xero or MSP tools such as ConnectWise and Kaseya saves time. 

Relevant data is shared with the tools to avoid workflow disruption and improve client satisfaction. The seamless integration is important to improve your team’s productivity by eliminating duplication of efforts, especially regarding reconciliation.

Inadequate Reporting and Analytics

An outdated payment platform lacks reporting, making tracking and managing payment data difficult. It does not perform analytics to help understand customer trends. 

Comprehensive analytics allow MSPs to monitor transaction data, identify trends, and forecast future payments. This information can then be used to offer clients personalized pricing plans or flexible payment options.

According to Nasdaq, real-time data analytics helps improve cash flow management. 

Real-time reporting can also help detect and prevent fraudulent activities by identifying unusual patterns and transactions. 

Your business growth will be hindered if your MSP payment system does not generate accurate and timely reports.

No Support for Recurring Billing

According to Kaseya's 2023 MSP Benchmark Survey Report, most MSPs rely on recurring billing to manage their subscription-based services efficiently. This billing model is essential for providing predictable revenue streams and ensuring smooth cash flow.

However, outdated payment platforms often lack the functionality to support automated recurring billing, leading to significant inefficiencies. 

Without this capability, MSPs may face late payments, directly impacting cash flow and necessitating additional staffing for manual invoicing and payment collection processes. These manual processes are time-consuming and prone to errors, further draining resources that could be better utilized elsewhere.

By automating this process using a robust payment management platform, MSPs can save substantial time, reduce errors, and improve overall efficiency, allowing them to focus more on delivering high-quality IT services and support​.

Consequences of Sticking With an Inadequate MSP Payment Platform

An inadequate MSP payment platform can severely affect an MSP's operations and profitability. 

Legacy payment platforms are not secure or compliant with PCI-DSS regulations. They are vulnerable to cyber threats and require much manual involvement to perform routine tasks. 

Here are some consequences of using an inadequate MSP payment management platform:

• Financial Inefficiencies: Legacy payment platforms are slow and require manual assistance, leading to higher operational costs and reduced efficiency. 
  Without automated invoicing and payment reconciliation, MSPs need additional staff to handle these tasks. This increases stress and reduces work-life balance, as more time is spent fixing mistakes and manually sending invoices. 
  Consequently, there is less time available to grow the company. In case of disruptions, financial losses are likely, further straining resources and hindering business growth.
• ‍Security Risks: An outdated payment platform's security features will be inadequate to protect against modern cyber threats. It makes your data vulnerable to malware attacks, phishing scams, and breaches. 
  According to IBM, a data breach costs $4.45 million, which means your MSP risks significant financial losses. Non-compliance also impacts your MSP's reputation. According to Votiro, 66% of customers do not trust a business after a breach, which will result in damaged client relationships.
• ‍Regulatory Non-compliance Penalties: PCI DSS is a mandatory security standard for MSPs that handle credit card data. Non-compliance can result in fines, penalties, and even client loss. An outdated MSP payment platform does not ensure data encryption, MFA, or access controls, making sensitive data vulnerable.
  According to the Fortra, PCI DSS-related fines range from $1,000 to $2.3 Million. In case of a data breach, your MSP may be subject to regulatory fines and must compensate for the breach expenses. Besides legal consequences, your MSP may even lose the privilege to allow credit card transactions or pay higher fees.‍
• ‍Operational Disruptions: Outdated payment platforms result in inaccurate reconciliation between accounting records and actual cash flow. The platform may not support features like recurring billing and automated payment reminders, which increases the need for manual intervention. It leads to delayed payments, reconciliation issues, and excessive workload.
  Manually managing MSP financial operations is time-consuming and prone to errors. These inefficient back-office processes cost MSPs up to $480 million annually. 
• ‍Customer’s Dissatisfaction and Loss: An inadequate payment platform will result in poor customer experience. MSP clients do not want to struggle with incorrect invoicing or wait for payment settlements.
  ‍According to Kaseya, 95% of MSP customers switch to a competitor if they are unhappy with the services. So, using an outdated MSP payment platform impacts your revenue and reputation. It may lead to customers leaving your MSP and choosing a competitor with better payment management options.

Selecting the Right MSP Payment Management Platform

A robust MSP payment management platform is a crucial business requirement for MSPs. It automates the billing process to manage invoicing and payment reminders without manual intervention.

A modern payment management system has advanced security features that safeguard sensitive client data to comply with PCI-DSS. The MSP-centric features make subscription-based billing and recurring payment collection easier.

Here are the key factors that you can consider to select the right MSP Payment Management Platform:

• Features: The MSP payment management platform should have MSP-centric features and tools. Essential features to look for include: some text
  • Automated billing and payment reminders
  • Recurring payment options
  • Secure payment processes
  • Advanced reporting tools
  • Automated reconciliation tools‍
• ‍Usability: The platform should be user-friendly, with an interface allowing easy navigation and operation. MSP staff should be able to quickly set up workflows, generate reports, and track payments without extensive training or technical support. A well-designed platform shortens the learning curve and increases productivity.
• ‍Pricing: MSP payments involve several fee components, such as monthly fees, transaction charges, and additional costs for premium features. You must compare the pricing models of various platforms before picking the one that fits your budget. Remember to balance the price with the value of the features provided to improve your ROI.
• Purchasing Terms: Flexible purchasing terms allow you to select a payment plan based on your business needs. Your  MSP payment solutions provider must allow you to choose one of the following: some text
  • Month-to-month contracts provide the flexibility to try out the platform before committing to long-term use. You can easily switch providers if the platform does not meet expectations.
  • Multi-year contracts provide MSPs with a locked-in price option during the contract term; however, in most cases, these contracts benefit the platform vendor rather than the MSP itself. You should evaluate their long-term needs to strike the best deal.
• ‍PSA agnostic: The platform must integrate with multiple Professional Services Automation (PSA) tools needed by MSPs. It allows you to choose the PSA platform you need without worrying about compatibility issues. You can even switch tools to meet evolving business needs.
• ‍Compliance: Ensuring compliance with industry standards such as PCI DSS is non-negotiable for MSPs. A compliant payment management platform will have built-in security measures to protect sensitive data. Compliance reduces the risk of cyber threats and prevents legal concerns.
• ‍Security features: Advanced security features are essential to safeguarding MSPs and their clients. Look for platforms that offer end-to-end encryption, secure payment gateways, fraud detection, and regular security updates. The service provider must regularly upgrade the software to protect against cyber threats and enhance the platform's trustworthiness.
• ‍Integrations: Your MSP payment management platform should integrate with accounting software and MSP-specific tools (PSA systems). The interoperability allows you to automate manual tasks and reduce errors.
• ‍Client Onboarding: The MSP payment management platform service provider should offer easy client onboarding. You can check if they provide training sessions, tutorials, and technical support to transition clients smoothly onto the new platform.
• ‍Customer Support: Look for a service provider that offers reliable and timely customer support to resolve any issues that may arise. Choose a platform available through multiple communication channels like chat, email, and phone. Excellent customer support ensures maximum uptime and minimizes disruption to your billing processes.
• ‍Customer Reviews and References: Reading customer reviews and references gives you a better understanding of the platform's performance and features. Users share their experiences with the platform, which can help you make an informed decision.

Conclusion: Making the Switch to a Robust MSP Payment Platform

Upgrading to a more capable MSP payment management platform helps you improve billing processes, reduce manual errors, and save time. 

Advanced security features, including tokenization, end-to-end encryption, and fraud detection, protect sensitive client data and ensure compliance with industry standards like PCI DSS. 

Better customer service capabilities, including seamless client onboarding and 24/7 support, improve client satisfaction and retention.

If you are an MSP looking for a reliable, MSP-centric payments platform trusted by hundreds of your peers, FlexPoint is a good choice.

FlexPoint offers a robust payment management platform for MSPs. Its comprehensive features include:

• Automated invoicing and payment reminders
• Secure recurring payment options
• Integration with multiple PSA tools
• Advanced reporting tools
• Flexible pricing options
• PCI DSS compliance
• End-to-end encryption
• Fraud detection

FlexPoint's user-friendly interface and exceptional customer support make it an ideal choice for MSPs. The platform streamlines payment workflows so that you can focus more on serving your clients without worrying about billing and payments.

Ready to revolutionize your MSP payments? 

Discover how FlexPoint payments automation software can elevate your service delivery and financial management. Visit us now or schedule a demo today!

Additional FAQs: Switching Your MSP Payment Management Platform

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