If you are a player in the retail space, thinking that your business needs support for payment terminals, or if you are considering different payment terminal solutions in search of the most suitable one, this article is for you.
The need for customized payment terminal solutions is gaining urgency in view of approaching introduction of EMV standards and requirements in the US, scheduled for the end of 2015.
In this article we are going to consider several solutions, available for payment gateways and payment service providers with respect to their EMV strategy.
In essence, a terminal is a mini-computer with its own OS, where a terminal application has to function. Payment gateway must integrate with this terminal application to support EMV properly.
Payment solution offered by the acquirer
The first and, seemingly, the simplest solution is using payment terminal application, offered by an acquirer.
Many present-day acquirers offer you some form of payment terminal solution, which some PSPs or gateways may consider using. Upon closer inspection, however, you realize that there are a couple of issues with that.
One of the issues is that most payment terminal solutions (applications) offered by acquirers are tied directly to their platforms. Particularly, because of the tight EMV regulations, they avoid sending transactions from the terminal to some third-party gateway, intermediary CRM, or software system, which would then forward them to the acquirer. This may present a problem, because they need to keep track of these transactions to accommodate the business model of a PSP/gateway. The problem with the solution is that these transactions become invisible to the third-party gateway providers within their systems.
Because of that, many gateways and PSPs choose to integrate their software system with a terminal in a way which they can fully control.
Integration with a terminal
Integrating with a terminal can be done at two levels. At a higher level a PSP/gateway can utilize an existing terminal application and integrate with it using integration SDKs. At a lower level a proprietary embedded application can be written and subsequently integrated into the overall payment processing ecosystem.
The advantage of the first solution is that the SDK-based integration, usually, is much quicker than development of an embedded terminal application. Major payment terminal manufacturers (such as Ingenico, VeriFone, and PAX) offer their own terminal applications, which can be used in various ways, and thus, it is possible for payment gateways to take advantage of these applications.
While this solution is the simpler of the two, it has its disadvantages:
- The gateway will not always be able to customize the terminal application (its interface or logic). For instance, you might be unable to add non-payment-related functionality, such as quality survey, to the application, when you need it.
- SDK-based integration method may not be conceptually suitable for your application. Traditionally, platforms that used terminals, were desktop applications (only desktop applications existed). That is why many terminal integration SDKs still rely on the so-called native code, such as Windows-compiled DLL library. This imposes the requirement on the application to be able to deal with the native code. While this is, generally, not a problem for a desktop application, it does present a challenge for a web-application, which operates from within a sandbox, and, usually, does not have security privileges to operate at such a low level.
The advantage of an embedded solution is that you can customize everything, and the application can do whatever you choose for it to do. You can develop an SDK or integration API, that will work for you, or your customers in any way, that you find appropriate.
On the other hand, this solution has a price tag attached to it, and is associated with some challenges:
- Writing your own terminal application requires your own specialized knowledge, and a special costly certification, that has to be competed with the respective vendor in order to acquire preliminary knowledge and access to SDKs, allowing to do embedded development.
- Building and testing the application, definitely, takes time. Therefore, immediate integration with the payment gateway solution is impossible.
In the next post we will describe some specific methods of integration and implementation of various SDK, allowing you to incorporate the terminal application into some software solution or payment ecosystem.