From a high-end perspective, the payment process comprises of three disparate elements, or phases, that are essentially stand-alone. But there are a number of important, synergistic and cost-effective benefits achievable to those in the payments chain by bringing these three together into a seamless whole - colloquially referred to as ‘end-to-end payment processing’.
Firstly, there is the ‘Point of Sale’, typically nowadays a PED (or Pin Entry Device) terminal. Then there is the ‘Payment Gateway’ which collects the customer’s card information and encrypts it for later processing. Finally, there is the ‘Acquirer’ element which settles said card transactions on behalf of the merchant, into their account and effectively approves the transaction between the merchant and the customer. The Acquirer acts as the conduit between the merchant, the card issuer and the payment networks.
However, a sagacious merchant can capitalise on several cost-effective benefits by adopting an ‘end to end’ payment solution, rather than having to handle each of these elements individually.
For example, a single contract SLA, or Service Level Agreement, which will encompass acceptance and acquiring services. This typically comes with a unique support centre to cover instore and online transactions, enhanced capabilities to monitor said transactions that can handle and address negative situations with the merchants quickly and efficiently. This could also include unique reporting, accessible through an e-portal, together with reconciliation of all the merchant’s transactional data.
From a reporting perspective, unified reports can be prepared both online and instore with the merchant able to receive bespoke reports. This has often been cited as the equivalent cost saving of employing two to three additional personnel.
There are also a number of savings possible through such synergies, including where there are international operations involved, such as high-end retailers or hotel chains. This also allows the opportunity to take advantage of DCC (domestic currency conversion) functionality where customers travelling from abroad can be charged in their local currency for convenience. A global solution provider should be able to bring project costs down considerably, including offering significant advantageous revenue shares on certain transaction streams. A merchant should therefore always ensure they have “shopped around” to select the most value-enhancing and competitive payment processing partner.
Other advantages of selecting the correct partner might include staff training on services such as DCC, as a well-trained workforce is far more likely to encourage customers to use such services, increase the take up rate and therefore enhance revenue streams. Equally some acquirers may have their own Gateway however rarely their own PEDs.
Also, very importantly, one should always consider the “what if” scenario. While disruptions and system failures are, or certainly should be, extremely infrequent, a rapid fail-safe back-up should be in place. Leading solutions providers will provide the security and support all merchants require and expect i.e. total reliability and 100% rapid response support in any eventuality, around the clock and in every geography. Effectively they represent a guarantee to be there when you need it most.
These are all synergies offered by an end-to-end payment processing partnership, streamlining the payment process for all involved in the payments chain and often providing significant revenue generating advantages. It is therefore imperative for merchants to ensure they make an informed decision from the outset, both for their own peace of mind and to maintain an optimal relationship with their most important counterparty – their customers.
About the author:
Marc Docherty is Head of UK Acquiring / Large - Strategic Business, at Worldline. With more than 20 years’ experience working for blue chip organisations within the banking and payments sector, including Bank of Scotland, RBS, Barclaycard, AMEX and Visa, Marc’s expertise lies in business banking, factoring and invoice discounting, and cross border payments. He also has extensive experience in acquiring, having focused on the large corporate sector across the UK and Europe for several years.
Marc is passionate about driving solutions that deliver real value to customers whilst helping organisations reduce complexity and enhance the customer experience by providing a complete end-to-end payment solution.