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Payment Processing Software is the engine behind the use of debit and credit cards to make payments. For instance, most of you will have made a purchase online and have needed to input your card details within a payment gateway. The payment gateway integrates with the payment processing software, which in turn integrates with the customer’s banking system. After a period of time, the Payment Processing Software will inform the customer of whether or not their transaction has been successful. Despite the prevalence of online payments services, Payment Processing Software doesn’t stop with online purchases, it has a number of different use cases.
If you have a physical store location, a customer can either tap or input the pin from their card at the ePOS till. The system then works similarly to how it does when making an online purchase. The way that these systems make their money for the developers is that they charge a percentage fee for every transaction. The total amount charged varies from supplier to supplier and can also be dependent on the size of the transaction. The development of the technology has been rapid in recent years, with virtual and cryptocurrency support being added for some and integrations with other money sources, like PayPal.
There are some key benefits for businesses that are looking to utilize Payment Processing Software. Firstly, payments from credit cards, debit cards, and other funding sources can be made by customers, which enhances the business’ ability to service its customers. Additionally, this makes the process of serving customers much easier, which increases satisfaction. Furthermore, a benefit of Payment Processing Software is that it can decline a transaction if there are insufficient funds, which prevents fulfilling invalid orders. Finally, these systems provide integrations with a huge number of banks worldwide to ensure as close to total coverage as possible.
There are a number of reasons why you should be using Payment Processing Software, if your business isn’t doing this, then maybe we can convince you to change that. One of the first benefits of these systems is that they provide fantastic security. This is a given, considering that payment information is some of the most valuable and closely guarded information you can have. As a result of this, the required security standards for Payment Processing Software are higher than other software types.
Another benefit of Payment Processing Software is that, depending on the provider, it is possible to scale your business, whilst still using the same provider. This takes the hassle out of having to change systems due to an increase in business. There are even some systems that handle billing and invoicing for you! To make sure that you’re using the best software for you in the first instance, you should compare service offerings from a variety of providers. You should also conduct due diligence into the scalability of the platform that you intend to use, to ensure you get the most shelf-life possible out of it.
Another reason why businesses use Payment Processing Software is the fact that it is incredibly flexible. The majority of these systems can handle payments from a wide variety of different sources. Some also have features that can be used to set up automatic billing for customers, which is particularly helpful and presents time savings when you have a customer that needs regular billing for items or services. Think about it, if you have a massive number of ways to pay, then you’re making your customer experience much more convenient and you’re going to be likely to make more sales than you would have otherwise.
The thing is, all businesses need to get paid somehow and as a result of this, the majority of businesses around will now offer some form of Payment Processing Software to facilitate digital payments. There are still some businesses that only offer cash payments, but these are becoming fewer as time goes on. Although, the three main types of businesses that are benefitting from the use of Payment Processing Software are e-commerce companies, businesses with physical store locations, and B2B providers.
E-commerce: It shouldn’t be a surprise that businesses that use the internet to make sales are incredibly reliant on Payment Processing Software. The processor will integrate a payment gateway with the customer’s e-commerce platform or will work a third-party gateway. Payment processors make their money by charging transaction fees and e-commerce stores will always have to pay these fees, make sure you’re using a fairly priced option.
Physical Businesses: Physical businesses are also common users of Payment Processing Software and the rise of digital payments over cash, accelerated by COVID has increased the levels of uptake. This is then used to facilitate these digital payments, usually through the form of an EPOS till, which is integrated with the Payment Processing Software. This has become a necessity for physical businesses in the modern world.
B2B Providers: As previously stated, all businesses need to make money if they’re going to survive and they can’t do this if they can’t accept payments. Features commonly found in B2B Payment Processing Software are a little different from the norm, with features that can include credit arrangements, e-cheque, and more. There is also commonly integration with the company’s own accounting and invoicing software to ensure a seamless process. There is also common functionality for repeat payments, which is helpful when businesses offer monthly plans.
Reporting Tools: Reporting tools from Payment Processing Systems are important as they give senior management and the finance team key insights into the financial health of the business. This can be used to inform decision-making and the overall strategy of the business using the software. Tailoring services to the ideal method of customer payment is a great way to retain customers in the long term.
Transaction Fees: The main way that providers of Payment Processing Software make their money is through the collection of small transaction fees on each customer purchase. This is usually a flat rate, which then has a fee percentage added on top of it. This method is effectively universal, although different providers will have different costs and fee structures associated with them.
E-commerce Functionality: If an e-commerce store couldn’t accept payments, it couldn’t function. This is why most Payment Processing Software providers will offer integrations with a client’s e-commerce storefront. The customer inputs all of their information and the software will store it centrally to ensure easy access to the information needed to fulfill orders and take payments.
Integration with POS: This is another staple feature of Payment Processing Software, which allows customers to walk into a physical storefront and make payment using a bank card, or some other form of electronic payment. This makes it easy for customers to walk in, get what they need, pay, and walk out again in record time.
Multiple Payment Methods: It’s a simple fact that if a business accepts multiple different payment methods, then they are going to attract more customers due to the convenience and ease of use. Different providers will support different transaction types, so it is best to shop around and try to find a system that is flexible with its payment support.
Security Measures: It’s no surprise that payment information is some of the most heavily guarded information online. This means that payment processing software needs to be as secure as Fort Knox to keep customer information safe. This has led to the commonality of Payment Processing Software using encryption to keep the personal information of users safe and out of the hands of criminals.
E-Sign: Nowadays, it is becoming increasingly common for Payment Processing Software to allow customers to sign for their orders- which is typically done by letting them use their finger on a touch screen to create a signature. This forms additional security and it helps to limit the risk of identity theft, which could cost a customer thousands or more. This not common with e-commerce, however with mobile and tablet-based solutions, it is rapidly becoming a norm.
Receipt Creation: There are Payment Processing Softwares that allow the business to print or create receipts for customers, whether these are physical or digital. This allows for both the customer and the business making the sale to keep appropriate records. These can also be sent via email in the circumstances of online sales. This is becoming increasingly common due to the shift towards digital sales.
Card Readers: When a customer comes into a physical storefront, it is important that making a payment is as easy for them as possible. It’s easier to tap a bank card on a reader than it is to insert a PIN code. There are also systems like tablet-based POS systems that allow the user to pay in this way. It’s different with mobile phones however because a specific mobile reader is required to take payments in this way. These can be connected to the device physically, or connected via WiFi or Bluetooth.
As is the story with many different forms of technology, there are a number of things that can go wrong with Payment Processing Software and due to the sensitive nature of payments and the data inputted for payments, these problems can quickly become massive if left unchecked. For instance, information security is a critical part of Payment Processing Software, however, complying with regulations and having industry-leading security is not always enough. Hackers are smart and are constantly outmaneuvering new systems, which makes the need for consistent updates apparent.
Another problem that is commonly felt by businesses using Payment Processing Software, particularly in physical locations is downtime. For example, if you’re using a physical POS device to accept payments from customers and your provider is suffering an outage, you’re not going to be able to use that system to accept payments. It is important to ensure that when you’re selecting your Payment Processing Software, you choose one that has minimal downtime and reliable services as a whole.
Payment Processing Software has developed rapidly, along with many other things in the digital world. As a result of this, new innovations are taking place all the time and it would be impossible to accurately predict the future of Payment Processing Software. Despite this, there are some future events that seem certain to happen and it is merely a matter of ‘when’ as opposed to ‘if’.
Pay By Mobile: As a convenient method of payment, more people are making use of mobile phones as their main option for payment. This has already accelerated the mobile payment space, however, this growth is likely to continue as the uptake of mobile devices also increases.
Pay With Cryptos: As cryptocurrencies are viewed with less suspicion and more trust, it is becoming increasingly common to see businesses and Payment Processing Software accepting cryptocurrency as a valid form of payment. This also has a great impact on security quality, for the better, although some of the technical requirements can be daunting for some customers.
Digital Currency Wallets: In the same vein as bank cards make it easier for customers to pay for products and services, mobile wallets are doing the same. These wallets mean that users can make payments without even taking out their card, which also makes sending money between friends and family even easier.
Generally speaking, as has been discussed in this article, Payment Processing Software providers generally make their money by charging businesses a flat rate for each transaction that they take, and then they will levy a percentage fee of each transaction on top of that. As a result of this, businesses using Payment Processing Software will need to analyze quotes from multiple providers to ensure they are getting the best deal possible, particularly if they sell low-cost items. In the event that the business sells low-cost items, they could stand to make minimal profits from each sale conducted through Payment Processing Software.
This is a complicated question to answer, primarily because there is a great variety of Payment Processing Software on the market. The simple answer to the question is that the best Payment Processing Software will be unique to your business, depending on what you need it for. For example, some services offer specific features relating to e-commerce, which would help any e-commerce business. Alternatively, if you are a small physical store, then you would want to get a POS till, as a simple solution to serve your customers.
The best way to find the best Payment Processing Software for you is to conduct an audit of your business and what it needs from the software. Then, you will be able to identify some good options, and with further negotiation and discovery, you will find the best option for you. You shouldn’t just jump on the first option you see, as Payment Processing Software is a critical part of your business.
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