Integrated Payment Processing, What’s That?
Integrated payment processing solutions allow you to combine your payment processing with the traditional accounting activities associated with accepting your customer’s credit cards. Unless your company manually inputs customer data into your payment terminals and POS system during every transaction, you’re using an integrated system, and more often than not, that’s a good thing! The fewer ‘touchpoints’ between your customers’ transactions, the less room for human error, and the more time you get back. Integrating your payment processing isn’t as simple as an on-off switch. Instead, there are multiple options to choose from, each with its own benefits and drawbacks.
What are the Different Payment Integration Systems?
If your POS system doesn’t talk to your payment processor via card readers, then your transactions are non-integrated payments. In other words, once a customer selects a payment method, you’ll have to manually input the dollar amount of the transaction into the payment terminal. After your customer is done paying, it’s your job to confirm that the transaction was successful and conclude the sale while printing the receipts manually. Once the terminal prints the receipt, you’ll have to manually enter the data into your POS system for record-keeping.
If you’re running an ecommerce store, then the ‘manual input’ is a redirect to a payment processor’s website where the customer enters their payment information. Regardless of if the transaction was offline or online, this process is time-consuming, inefficient, and leaves room for human error. Also, the only data you can retrieve from non-integrated payments is the confirmation that there was a successful transaction with a specific form of payment. This significantly restricts or even prohibits you from achieving level 2 or level 3 processing.
Fully-integrated payments often referred to as simply ‘integrated payments,’ is the most efficient and convenient way to process transactions. The entire process from the POS system to the payment terminal and payment processing software is automated. Fully-integrated payments provide the best customer experience and the least amount of work for the merchant. However, you’ll need to protect your customer’s data, as you’ll have complete access to it during this process. As a result, hacking attempts and data breaches are especially problematic for a fully integrated payment system, so additional security measures are strongly recommended if not required.
Semi-integrated payments blend the elements of integrated and non-integrated payments by allowing communication between the terminal and POS system. After you ring up a sale on your POS, the card terminal will retrieve that information along with the customer’s card data and send it for authorization.
So, why would anybody choose semi-integrated payments over fully-integrated payments? The key benefit to semi-integration is that your customer’s information never passes through your system. Your payment processor will receive cardholder data in a tokenized form directly from the terminal and will approve the transaction, allowing you to accept payment without the liability of protecting your customer’s sensitive information. Some merchants prefer this option, as they don’t have to worry about added protection in case of a data breach.