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Integrated Payments: A Complete Guide

Integrated Payments: A Complete Guide
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Payment acceptance has evolved significantly since the days when businesses used “Knuckle Busters” to capture an imprint of credit card details. Using separate systems for ringing up purchases and taking payments—in-person or online—is inefficient and prone to errors. Read on to learn how integrated payments benefit business owners and software companies.

What Are Integrated Payments?

An integrated payment solution allows businesses to accept credit and debit cards within the same software they use to run their business daily. Payment acceptance can be integrated with a point-of-sale (POS) system, e-commerce site, CRM system or accounting software. 

The rise of independent software vendors (ISVs) offering specialized, cloud-connected software for specific vertical segments has fueled the demand for integrated payments. ISVs connect payment acceptance functions with their software via a payment provider’s application programming interface (API). Payments—whether in person, through an invoice, on a website, or for subscriptions—are initiated within the business software and all transaction information flows directly into customer records, billing files, and reporting modules.

How Do Integrated Payments Work?

Let’s start with the opposite: non-integrated payments. Employees enter the sales of goods and services in the business’s core point-of-sale system or back-office software. The sale details are then re-keyed into a stand-alone payment terminal or Virtual Terminal that captures card details and routes the transaction to a processor for approval. A transaction receipt—printed or digital—is created, which is separate from the sales receipt or invoice. Staff must manually mark the purchase as paid in their core software (and maybe again in their accounting system) and perhaps file the paper receipt with the invoice. End-of-day reconciliation is done by tallying receipts or batch reports from the payment systems and comparing the totals to the amount reported in their business software. 

Integrated payments streamline acceptance by eliminating the dual entry of information. Employees initiate purchases in the core software, which automatically sends the information to the payment system to securely capture payment details from the customer and route the transaction to the processor. Upon approval, the integrated payment system automatically sends the response back to the core software for automated posting against the associated sale or invoice. A single receipt reflects the sale and the payment transaction, and there is no need to reconcile two separate systems at the end of the day.

Why Do You Need an Integrated Payment system?

Stand-alone payment terminals, paper-based systems, and manual business functions impact the checkout experience, slow productivity, and prevent accurate financial reporting. They create separate processes for everything from ringing up sales, filing invoices, performing end-of-day reconciliation, and more. Not only is this time-consuming for staff, it often results in keying errors and a less-than-ideal customer experience.

Here are tell-tale signs that your business is ready to upgrade to an integrated payment solution:

  • Staffing challenges: Rekeying information in two or more systems and manually reconciling receipts and reports is time-consuming and prone to costly errors. And if totals don’t match, more time is spent identifying and resolving errors. Plus, it takes staff away from critical duties, such as taking care of customers.
  • Difficulty gaining insights: Stand-alone payment acceptance solutions only report credit and debit card payments, making it difficult to get an accurate view of customer transaction history and payment preferences. Cross-referencing reports and data across separate systems to accurately view payment status is cumbersome. Analyzing data by department, location, or compared to previous periods is difficult when relying on paper-based systems and spreadsheets.
  • Multiple departments and locations: The overhead associated with reconciling separate payment systems with your software becomes more complex when you have several payment terminals, or you need to gain a holistic view of your business across multiple departments and locations.
  • Omnichannel payments: The channels where you take payments have expanded to include in-person, online, through invoicing and even recurring payments, making it challenging to match customer activity across your business.
  • Cumbersome customer management: Maintaining customer records and payment preferences in two or more systems is time-consuming, leads to errors and can create a poor customer experience.
  • Additional middleware: Connecting to your merchant services provider via a separate third-party payment gateway or e-commerce platform adds a layer of complexity and cost and can lead to finger pointing when troubleshooting problems.

Benefits of Integrated Payments for Businesses

Integrated payment systems create a unified platform that allows payment information to automatically flow directly from your POS, website, or back-office software to a cloud-connected terminal for payment processing, reporting, and management. The result is increased productivity, a better customer experience, and more time to devote to areas of your business. PayJunction conducted a time survey demonstrating how companies can save up to 29 hours per month by integrating payments.

Operational efficiencies: Integrated payment solutions speed up the checkout process and reduce human error, freeing staff to focus on higher-value tasks. Payment details captured in person or online are tokenized and sent directly into the core software, which means double-keying errors are virtually eliminated. Instead of printing and storing every paper receipt, you can streamline and improve operations by going paperless and automatically syncing digital invoices with customers’ payment transactions. Bookkeepers can perform end-of-day accounting in a few clicks to get a real-time view of performance.

Better customer experience: Everyone appreciates a faster checkout, whether in person or online. And since transaction histories are securely stored with customer records in the core software, receipts and supporting documentation can be easily located and sent to customers.

Streamlined payments: You can integrate payments into your POS system, e-commerce site, online portal, or invoicing system. Card or bank account details are paired and securely stored with customer information, streamlining the setup and management of recurring billing and subscription services. Cash flow improves, and collecting payment when due significantly reduces write-offs for unpaid balances.

Improved cash flow: Digital invoices are a quick and easy way for customers to pay for goods and services. Integrating payments allows staff to open a customer's record, input invoice details like items, amount, tax, and due date, and email it directly from the software. Recipients open the link, click to pay, and enter payment details in a secure online form. Reminders can be sent for overdue payments, eliminating the "phone tag" game.

Deeper insights: Integrated payments eliminate the need to combine information and reports from multiple systems. Business owners see company performance and customer purchase behaviors across channels, departments, and locations. This level of detail improves sales forecasting and helps inform marketing and promotional strategies. Payment integrations enable you to monitor metrics like cash flow and credit card payment ratios which, in turn, can help you stay on top of payroll, inventory, vendor payments, operations, and more.

Benefits of Integrated Payments for ISVs and Software Companies

Successful ISVs have built a business by listening and responding to the needs of business owners in the segments they serve, whether a veterinary practice, specialized medical provider, automotive dealer, professional services provider, or membership club. Their software addresses specific requirements from scheduling to inventory, invoicing, and customer records.

Most ISVs connect to other business solutions and platforms (e.g. accounting and billing systems, social and digital marketing tools, diagnostic services) to provide a seamless experience for their clients while helping the ISV increase lifetime value. One of the best ways ISVs drive value is by integrating payments with their core software.  

Differentiate Your Software: Offering integrated payments reduces an essential point of friction in a business owner’s decision criteria when considering software providers. It eliminates the challenges of sourcing and running multiple systems.

Monetize payments: ISVs can earn significant revenue by working with a payment provider like PayJunction that offers a revenue share on transaction volume.  

Deepen customer relationships: Integrated payments create a seamless experience for an ISV’s business clients and end customers, which drives loyalty and referrals.

Remain secure and simplify compliance: Securing payment data across the entire payments lifecycle builds trust with customers. ISVs reduce the scope of sensitive data and simplify PCI compliance by working with a payments provider that operates as PCI Level 1 compliant provider. 

How to Get Started with Integrated Payment Systems

Software developers and business owners interested in integrated payments need to research payment providers to ensure they choose a partner that invests in their success. Unethical payment providers result in higher costs and poor service for business owners, leading to low satisfaction scores and higher attrition for the ISV. 

Considerations for Business Owners

When considering integrated payments, the best place to start is with your current technologies or providers. If you’re already using a POS system, ask them about their payment partners and go from there. Be sure that the payment provider has a reputation for outstanding service (just Google “company name reviews”). 

Alternatively, suppose you have access to developer resources. In that case, you can work with a full-service Payment Services Provider (PSP) like PayJunction, which offers payment gateway connectivity and easy-to-use integration tools. Integrating payments with a hosted checkout or a third-party e-commerce shopping cart may be all you need to get started. A PSP brings the knowledge and resources needed to help you select the right POS and payment solutions for your business.

Considerations for ISVs

It’s vital to find a Payment Service Provider with the experience, technology, developer tools, and talent to drive adoption and maximize results from pre-sales through implementation and customer support.  

Don’t limit your payment acceptance to online only. Accepting payments in person, online, curbside, and via invoices will help you win and retain more business. In-person acceptance brings complexities related to things like EMV, contactless and mobile payments, so make sure your partner has a smart terminal that will evolve with customer demands.

Please do your research to find a partner that offers an outstanding developer experience, with a modern tech stack and award-winning APIs that allow you to integrate their payment solutions with your core software quickly. The best partners extend an excellent self-service developer journey backed by a team of payment experts eager to help you create the best experience for your customers.

Consider how much time and money you have to invest in the customer journey from pre-sales to implementation, risk management, and merchant-level customer support. Doing it all yourself may seem tempting when initially projecting financial returns. However, if adoption rates are low and the burden on company resources is high, you could make significant investments that don’t pan out. Find a provider like PayJunction that offers a rev-share program and takes on the heavy lifting of data security, risk, compliance, merchant onboarding and support while also offering extensive sales and marketing programs to drive success

How PayJunction Can Help

Talk to the integrated payment pros at PayJunction. Learn how we invest in your success and support ISVs and business owners throughout the customer journey. A partner that provides you with a single dedicated point of contact will help you achieve your goals.

Speak with our integrated payments team today!

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PayJunction Team

Content written by the PayJunction team encompasses broad business topics including marketing, brick-and-mortar business operations and management.

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