Is it Time to Switch to a New Payment Gateway Solution?

As merchant services industry is rapidly moving forward, new payment gateway solutions are emerging. These new solutions often offer new functionality. They are more flexible and capable of satisfying the new needs of merchants and resellers/ISO/Payment Facilitators.

The purpose of this article is to outline the main signs, indicating, that it might be appropriate for you to switch your current payment gateway solution to a new one. While some of these signs are relevant for all merchant services industry players, others apply to specific groups, such as merchants or intermediary entities (ISO and payment facilitators).

Let us review some of the signs, indicating that it is time to search for an alternative payment processing platform.

  • Processing costs and fees – your cost of processing is too high and the processing fees are being re-adjusted even though your volume has significantly grown. You may have started with small processing volumes, but now your volumes are much higher, so your current transaction processing cost is significant, because the fees you are paying are the same as before. If you are not able to re-negotiate transaction pricing with your current processor, then you should look for alternatives.
  • Funding delays – it takes too much time to get the funds you are entitled to. The funds are arbitrarily frozen and delayed, while you have a good processing history, there are no problems associated with your account and no particular reasons for suspicion and funding delays. If you are unable to resolve the issue with your current processing partner (i.e., your processor cannot provide a suitable solution), then, perhaps, it is time to look for a new one.
  • Lack of multi-currency support – you need to accept payments in multiple currencies, but your current payment platform does not support multi-currency payment processing. While you can use a different payment platform to handle additional currencies, it might also make sense to find an alternative payment gateway solution that will handle everything with one interface (from one entry point).
  • Lack of the necessary features – when you have started, your processor had a satisfying feature set, but since you started using the existing solution, your needs have changed. Now there are certain features, that you need, that are not available within your current payment processing platform. For example, traditionally, you worked with e-commerce transactions, but now you would like to handle card-present payments as well. You need to work with payment terminals and offer new solutions to your customers, but your payment gateway provider is unable to support the new technology. Or, perhaps, you would like to enroll in 3D secure program, in order to improve transaction security, but your provider does not support the respective features.
  • Reporting issues – reporting is not customizable enough. I.e., the reports are not presentable in the format that you need. There are no ways to export raw data in a format, allowing you to manipulate it. Some of the data, you would like to be able to see, such as details of processing costs is not available, etc. Perhaps, as a result of unclear reporting procedures, you experience problems while trying to reconcile your deposits properly.
  • Integration inconvenience – it is possible, that the technology, offered by your payment service provider, is not the most modern (up-to-date) one. While you managed the initial integration, supporting it imposes unnecessary costs on you. You might consider looking for an easier and more natural solution.
  • Limited branding functionality – you would like to present payment processing interface to your customers under your own brand. However, your current payment platform does not allow you to do that. As a result, lack of required branding functions limits your marketing capability and hampers your relationships with your customer base.
  • Merchant onboarding problems – as we have explained in our previous article, merchant onboarding problems are extremely relevant for payment facilitators and ISOs. More and more systems today offer real-time merchant onboarding and provisioning, which is a critical feature. It becomes one of the driving factors of competitive advantage in the merchant services industry. You may be used to submitting paperwork manually and waiting for a couple of days for the MIDs do get issued. However, your customers are demanding a more streamlined process. If your current payment gateway solution is unable to accommodate it, you may consider some additional or alternative options.

Conclusion

If some of the listed issues resonate with the pinpoints, that you have with your current payment processor, perhaps, you should consider some changes to the existing payment gateway solution, or even switching to a new one.

Handling Bank Account Transfers Worldwide

This article is targeted at those who need to deal with bank accounts in different countries while processing transactions. It explains certain aspects associated with the process in different parts of the world.

Every US based business, dealing with bank accounts internationally, should pay attention at these things and the particularity of the process in each country of operation.

Globally, there are two types of systems, which are most popular today. Systems of the first type, allow for one-phase processing of fund transfers between accounts, while systems of the second type allow for two-phase processing.

One-phase processing of bank account transfers

One-phase processing is used in such countries as the USA and Canada. In these countries inter-bank fund transfers are conducted through a nation-wide clearing house. In the US, for instance, the clearing house is the Federal Reserve. A merchant has to send a file with the list of transactions to be funded (withdrawals) to the clearing house; within one or two days it gets the requested funds from the clearing house. After that the clearing house sends transaction requests to respective banks to verify the availability of funds and complete these transactions. Usually, member banks will then have certain time period (up to sixty days in the US) to either confirm transaction or decline it. If a bank declines a transaction for whatever reason, then the return is sent to the merchant, who originated the transaction, and the funds are forcibly withdrawn from the merchant’s bank account (check our article on ACH returns for details).

Two-phase processing of bank account transfers

Two-phase processing is used in the UK (BACS), EU (SEPA), and Australia. Under this approach clearing houses are also used. However (in contrast to one-phase systems), in such systems as BACS and SEPA all bank accounts must be registered within the system before any financial transactions can be processed through them. A registration file with the list of accounts is sent by a merchant to the respective financial authority (body), which issues payment mandates to merchants. (At the stage of bank account registration invalid bank accounts can be identified). Within a certain period after the registration (generally, about two weeks after the mandates are obtained) the merchant can start processing actual transactions. After that the process, generally, follows the same patterns as during one-phase processing. The clearing house contacts member banks to clear the funds. However, most of two-phase systems, usually, provide most of the responses within three days and do not require the 60-day wait period (as the accounts are already registered in the system). However, some banks may delay payments, while some other banks may dispute them post factum.

The advantage of the first system is its simplicity, while the advantage of the second system (although more complex) is its reliability. I.e. in the second case merchants have better chances of getting their money from valid bank accounts of their customers, however, implementation of a two-phase system requires more efforts.

Conclusion

If you are a payment gateway provider, processing worldwide, and you want to process in the countries, using different banking systems, you need to pay attention at the architecture of the whole process. Your main objective in this context is to make your payment gateway capable of working with both one-phase and two-phase systems, while providing your customers with a unified integration API.

Visit the UniPayGateway website if you are interested in the diagram illustrating this topic.

Payment Gateways II: Introduction

In a previously published series of posts we have covered a set of basic features to be considered by merchants and resellers as online payment gateway selection criteria. Posts concerning these fundamental features can be found in Payment Gateways series on our web-site.

Although needs of most merchants and resellers are confined to the features discussed so far, enterprise merchants, wholesale resellers, independent sales organizations (ISO) and payment service providers (PSP) occasionally face some challenges induced by their size and specifics of their business. For the benefit of these groups of players, we have decided to write another series of articles covering the so-called advanced enterprise-level payment gateway features. In the current series we will offer a review of advanced features (which are sometimes no less important than basic ones) to be considered when choosing a credit card processor or online payment gateway provider.

In the installments concerning basic online payment gateway features we have considered merchant and reseller perspectives separately for illustrative purposes. In contrast to basic features, where the two specified perspectives could be clearly defined and understood, enterprise features tend to apply to both resellers and enterprise merchants in the similar way. The only thing for resellers to keep in mind is that a reseller must always strive to select a processor\online payment gateway, capable of supporting the set of features, satisfying all current and potential needs of merchants this reseller is dealing with.

Consequently, in our subsequent posts we are going to look at all of the above-mentioned players from a single perspective. In either case, we will try to supplement the concept explanation with a meaningful example from the industry.

Particularly, this series will look into the following advanced online payment gateway features:

  • Ability to support surcharges (such as convenience fees and taxes);
  • Support for batch transaction processing (especially if there is a need to do recurring billing\process large files);
  • Support of ACH transactions through unified ACH\CC API;
  • Blacklist capability of “never-to-be-active” accounts;
  • Availability of various types of recurring billing schedules;
  • Support for tokenization and hosted paypages (to reduce PCI scope);
  • Built-in merchant on-boarding and merchant account provisioning mechanism (to automate the merchant data collection process);
  • Enterprise reporting for advanced reconciliation;
  • Payment aggregation and remittance for PSPs;
  • Credit card BIN and “business intelligence” (to allow businesses to gain extra-knowledge about their customers).

All aforementioned topics (and more) will be covered in subsequent articles, so stay tuned and wait for new installments to appear.