Single-source, end-to-end payment processing can result in stronger client relationships, increased accountability, and decreased fraud. For payment administrators, partnering with a payment processing company that handles the entire payment chain can pay numerous dividends.
More and more people rely on debit or credit cards to pay for goods and services. Consumers are primarily concerned about information security and fraud as there have been several high profile data breaches that affected millions of people in recent years. Merchants who accept card payments, whether they are retailers, doctors, or other businesses, worry about timeliness, as slow payments impact their company’s cash flow. Then there are payment administrators, who are not only concerned with their clients’ overall satisfaction, but they have to make budgetary considerations as well.
Traditional Payment Processing Issues
With the rise of card-based payments, today’s marketplace has many specialized companies who participate in the process. Individual businesses at each step in the process have their own unique workflow and institutional procedures, which are generally insulated from external influence. This reduces payment speed and operational accountability, increases fraud opportunities, and affects client satisfaction. Payment administrators need to take this into consideration.
A convoluted process with numerous participants raises serious security concerns. Every time a purchase takes place, money and sensitive information passes through multiple parties (merchant, acquiring bank, issuing bank, customer, and other entities). Each transaction leaves the sensitive information vulnerable to fraud. If there’s a breakdown in the system, it is difficult and time-consuming to identify where it occurred. This is not only a security issue, but also a speed of payment issue.
Payment speed is decreased with each party involved; it can take up to a week for the merchant to receive payment. Add in the possibility of a system breakdown and it only compounds the problem. The end result is a frustrated merchant who looks to their payment administrator because of the impact on day-to-day business.
Eroding profitability is also a concern. A process that has multiple parties involved means that each party has its own overhead costs and operational expenses to account for. These costs add up quickly, resulting in fewer profits for the administrator.
Payment administrators can get more from an end-to-end payment processor.
The Benefits of End-to-End Payment Processing
End-to-end payment processors take care of every piece of the payment puzzle. They have strong relationships with banks, deliver more cohesive reporting, and experience greater operational efficiency than the standard payment processing chain. For an administrator, a partnership with an end-to-end processor delivers:
- Improved security. End-to-end card processors handle every facet of the transaction. By simplifying the transaction chain, there is less opportunity for theft and fraud. Plus, end-to-end processors must comply with regulations for consumer protection such as HIPAA and PCI DSS, further reducing the chances for criminal activity.
- Increased accountability. With a single entity card processor, there is greater accountability from the beginning to the end of the process. A singular point of contact reduces the chances for a breakdown in the system and promotes quicker problem resolution.
- Lower costs. A single, end-to-end card processor reduces overall costs than with multiple entities in the process. Every company/organization within the chain only adds to the total fees with separate overhead and operational costs, which are passed on to administrators.
- Faster payment delivery. Payment recipients benefit greatly by having fewer “middle men” in the transaction process. Instead of hand off after hand off, an end-to-end card processor can complete the payment process much quicker than if there were multiple entities involved.
For greater security, higher client satisfaction, and larger profit margins, the benefits of end-to-end payment processing are second-to-none.