As a merchant, do you ever wonder why you need a streamlined, efficient payments processing system? Further, what does a successfully implemented and integrated payments system look like? The answers to those questions change as new technology arrives on the scene, but you can learn a lot just by exploring the concepts.
For any owner, money is like fuel. Without it, you can survive for a little while, but eventually there has to be an inflow of funds or the organization will stop functioning. In order to get a grasp on the topic, it’s necessary to examine four separate topics: why payment processing is essential, what its benefits are, the specific steps for integrating a system for your own company, and actually moving ahead with the real work of putting a system in place. That last part is where the “rubber meets the road,” as the old saying goes. However, each of the four topics is equally important and need to be viewed separately.
Why Payment Processing Matters So Much
Unless you run an all-cash business, you need a reliable payment processing system. With each passing year, consumers continue to turn away from cash as a means of exchange, and instead are relying on plastic debit and credit cards. Additionally, cryptocurrency is gaining ground as a globally accepted form of payment for thousands of retailers and wholesalers. It’s no secret that consumers everywhere prefer to get their goods and services as fast as possible. On the other side of the transaction is the merchant, who wants to receive payment (funds) as quickly as possible.
Another reason it make such good sense for merchants to get up and running with a payment processing system is historic. The 2020 COVID pandemic set several major economic changes in motion, one of which was a vast migration to online and remote methods of payment by consumers. Whether that unique crisis abates quickly or remains with us for many years, the cat has been let out of the bag.
Consumers, by every measure, appear to prefer paying remotely. In the span of 10 months, commencing in March of 2020, millions of consumers have opted to make the majority of their purchases online via computer terminals or on their phones. What’s it all mean for the merchants? It means that any company without a streamlined, efficient payment processing system in place will be at a competitive disadvantage as the decade progresses.
What are the Key Benefits of Payment Processing?
It’s obvious that there are far more than six reasons for owners to use online and in-person payment processing (PP). But the list below includes some of the most common things that sellers mention when asked why they feel the need for a PP method geared for their company’s size, product/service type, and budget.
- Easier Financial Reporting: When tax-time comes, a fully-integrated PP system will offer hassle-free documentation for both governmental and internal records. If you do an internal audit at any time, it’s simple to pull any data from a well-integrated payment system.
- Tighter Security: It’s harder for malevolent types, like hackers, to breach an integrated system and wreak havoc, steal sensitive data, or shut things down.
- Recurrent Billing: One of the most convenient kinds of payment for merchants and consumers is recurrent billing, or the automatic monthly withdrawal of a fixed amount from the customer’s bank account. The funds are then deposited, again automatically, into the merchant’s bank account.
- Smoother Cash Flow: When banks, credit card companies, consumers, and merchants are seamlessly connected within an integrated process, money flows faster and hits fewer snags. More efficient cash flow means merchants get their money for sold items quicker.
- Lower Overall Expenses: Less paper means fewer expenses. It’s as simple as that. With a streamlined system in place, both merchants and customers have no need for paper statements unless they occasionally wish to print one for a specific reason.
- More Customers: Consumers prefer fast payment methods and rapid delivery of goods and services. Cash and paper statements slow things down, as do payment systems that are not properly integrated.
The Five Steps to Perfect Payment Processing Integration
There’s a sort of industry secret about payment processing: the key to success with it is more about correct integration than the system itself. There are many reasons for that fact of life. The central one is related to the fact that no matter how great of a payment processing system you have, you’ll get no benefit from it unless it’s integrated correctly.
An analogy makes the point. It’s like buying a brand-new, top-quality engine for a car. Removing and disposing of the old motor is simple enough, but unless you place the new one into the car in exactly the right way, all your work is for nothing. The secret to making a payment process work is adapting it to your company’s current systems, so that it works with, not against them.
Here’s a brief summary of the five steps. Note that there are variations, depending on local regulations, national banking laws, and other factors. But, in the vast majority of transactions where a consumer purchases something from a merchant, the following steps are the common way of getting funds from a buyer to a seller, and making sure the services or goods begin to move from the seller to the purchaser:
- Submission: Using a mobile device (a payment processor), a phone, laptop, tablet, or desktop computer, the buyer places a request for payment.
- Routing: The PP system instantly routes that payment request, and its related data, to the consumer’s credit card company or financial institution via a secure connection
- Approval (or Decline): The credit card company or bank either rejects or accepts the payment request based upon the consumer’s total amount of available credit or funds in the bank account. It the payment gets the green light (is approved), then the submission is formally made to the payment provider for processing
- Recording: Both the consumer and the merchant receive a formal, legal record of the event (the transaction) and maintains a record for its own files.
- Movement of Funds and Goods/Services: The services or products are conveyed to the purchaser. At the same time, the purchaser’s financial institution transmits funds to the merchant, and the cycle is complete
Getting Set Up From Day One
If you’re just starting out or have been in operation for a while, it’s essential to get an effective PP systems up as quickly as possible. The world if moving to a non-cash economy, consumers like the simplicity of paying with cards online and in person, cryptocurrency is making headway as an accepted form of money all over the world, and companies that offer lots of different ways to pay are more profitable. For so many reasons, getting the payments integration job done right is of paramount importance.
At Metro Payment Technologies, we’ve built our company’s mission around the entire concept of making it easier for your customers to pay you. When you’re ready to get going, we can show you dozens of ways to integrate the system that makes sense for you, no matter your organization’s size, age, or monthly volume.
Our toll-free number is 1-800-771-3719, and we’re happy to answer any questions you have about payment system integration or anything else. If you’d like to get more of an idea about what we do for merchants every day of the year, head over to our website and look around. Getting a streamlined payment system integrated into your company’s infrastructure can make 2021 and the rest of the decade your time for rapid growth.