The development world is a quickly evolving one, and businesses that want to stay ahead of the curve need to be capable of adapting to ever-evolving digital technologies. So, promoting a “restful” application programming interface (API) may seem anti-productive—but it’s exactly the opposite. Businesses that offer online services use APIs to communicate between systems. Among the various types of APIs, representational state transfer, or REST, APIs are one of the most widely used. In fact, around 70% of all public APIs are REST APIs. Why? Because despite the lackadaisical speed the name implies, they’re actually the workhorses of APIs.
Read on to learn key characteristics of the REST architectural style, how it works, why REST API is so important and widely used, security measures to consider and what to look for in a REST API provider.
What Is REST API?
To understand REST API, one must first know that an application program interface, or API, is the name given to the code that sets uniform standards for how a developer writes a program so it can communicate with other operating systems or applications.
A RESTful API is a type of application program interface that uses HTTP requests and is based on “representational state transfer” (REST) architectural style, which requires the system be cacheable, remove the need to edit code, offer a uniform interface and a provide a method of separating client and server information. Using HTTP requests, REST API can perform operations such as searching for information (GET), adding information (POST), editing information (PUT) and DELETE.
Benefits of Tapping Into a RESTful API
Businesses that use RESTful AIPs can take advantage of several benefits. For example, they can be used without expensive third-party tools. The documentation is easier to understand and returns readable results. REST API also allows many different data formats and is especially good for cloud-based applications due to its statelessness, which means no information is kept or shared between REST executions. Additionally, REST APIs’ stateless functionality allows calls to be easily redeployed at scale.
RESTful APIs are preferable to SOAP (Simple Object Access Protocol) API technology for many reasons. They’re:
Lightweight
Easy to maintain
Scalable and flexible
Efficient and fast
High performing
Smaller and more efficient
These are all good reasons to select REST instead of SOAP—especially when using CSG Forte products and capabilities like our payments platform DEX, reporting or out tokenization tool Forte.js.
Security Considerations for Using REST APIs
While REST APIs offer numerous benefits, it’s crucial to implement proper security measures. Here are a few best practices to secure your REST API:
Authentication: Secure your API keys with proven methods to ensure that only authorized users can access sensitive data.
Encryption: Always use HTTPS for encrypted communication between the client and server. This prevents data from mid-transmission interception.
Input validation: Properly validate and sanitize user input to protect your API from common vulnerabilities like SQL injection and Cross-Site Scripting (XSS).
Rate limiting: To prevent abuse and protect your API from denial-of-service attacks, implement rate limiting that restricts the number of requests a user can make in a given time.
CSG Forte API Solutions
CSG Forte’s REST API enables merchants and partners to perform a variety of powerful tasks, such as creating and updating credit card, electronic check and scheduled transactions; securely managing customer and payment data; querying and tracking settlement information and creating and submitting merchant applications for new organizations and locations.
It supports multiple programming languages, such as JSON, Java, PHP, Ruby and VB.NET. REST is best suited for merchants that are tech savvy and have developer resources. These include ISVs with multiple merchants or third-party app developers that aim to receive and leverage our webhooks.
Digital payments have skyrocketed along with e-commerce in recent years. Most U.S. consumers today are familiar with sending and receiving e-payments, whether they understand how they work or not.
With more customers adopting new methods as tech evolves, your business faces the pressure of integrating multiple digital pay solutions. Understanding the changing landscape and future-proofing your business by leveraging the latest technology is vital to your success. By offering digital payment options, you can:
Remain competitive
Meet consumer expectations
Expand your reach
Enhance operational efficiency
Ensure data security
Optimize your customer experience
What Is a Digital Payment Method?
A digital or e-payment is a financial transaction completed without physically exchanging cash. This category includes electronic payments, which are transactions between a payer and payee using a digital device like a credit card, smartphone, PC or prepaid card. The payer and payee both need an account, online transaction method, device and transmission medium—like being signed up to a bank or payment service provider.
The Benefits of Digital Payments
Technology keeps evolving, and forward-thinking businesses must embrace its transformation to leverage the benefits that come with it. The benefits of digital payments include:
Greater accessibility for more customers, small businesses and merchants
Reduced costs through streamlining and efficiency
Increased transparency and security in trading
More control for your business and customers
Faster payments, compared to non-digital payment methods like paper check
The Role of Technology
Technology is critical in facilitating digital transactions. Technology provides:
The tools, security and capabilities necessary for seamless transactions
The means to empower digital transactions through efficient processing and data protection
Versatile payment options for customers, paving the way for e-commerce growth
Convenient, safe, customized digital payment options
Types of Digital Payments
Digital payments include transactions between you and your customer that use digital payment technology, including mobile wallets, credit cards, bank transfers, cryptocurrencies, peer-to-peer payments and contactless transactions.
1. Mobile Wallets
Mobile wallets or e-wallets are an online payment method that functions as an electronic version of a wallet. Digital wallets enable your customers to securely store payment information and access credit cards, gift cards, cryptocurrency and coupons. Popular mobile wallet providers include PayPal, Apple Pay and Google Pay.
Your customers can use e-wallets to make purchases online or through contactless payment terminals in-store. Customers can simply scan a payment code or tap their payment-enabled device to purchase items.
Not all merchants offer e-wallet payment methods—and when they do, their payment service provider (PSP) may restrict the types of digital wallets they accept. For a competitive edge, your business should work with a PSP that supports multiple e-wallet options alongside more traditional digital payment methods.
2. Debit and Credit Cards
Card-based payments are another way for customers to make cashless transactions. Debit cards are typically linked to your customers’ savings or checking accounts. When a customer taps, swipes or electronically pays, the purchase amount comes from their account. Credit cards are similar, but the funds come from borrowed money. Customers may also pay interest to the lender depending on the balance and terms of the credit card loan agreement.
Card payments are processed through a series of steps that involve a merchant, payment processor, card issuer and cardholder:
The cardholder—or your customer—initiates the transaction.
As the merchant, you send an authorization request to your customer’s payment processor.
The payment processor routes the request to the appropriate card network and then forwards the request to the card issuer.
The card issuer authorizes the transaction and sends information through the relevant channels, enabling funds to be paid.
Credit and debit cards are convenient and widely used, but they still come with a level of risk. Security measures are vital to protect against fraud and prevent unauthorized access to your customers’ data. Critical security measures include:
Card verification methods: You can use various verification methods, including pins, to guard against unauthorized transactions.
EMV chip technology: Chip technology adds a layer of security by encrypting data and providing unique transaction codes that make card counterfeiting difficult.
PCI DSS compliance: The Payment Card Industry Data Security Standard (PCI DSS) sets strict security requirements. Your organization must comply with these standards when dealing with cardholder data. The rules ensure businesses implement access controls and security measures to protect card and customer data.
Tokenization: Tokenization is a security measure that protects customer data during transactions. It works by replacing the customer’s primary account information with a token. Even if a hacker accesses the token, they cannot make further fraudulent transactions.
Encryptions: Encryption converts sensitive data into codes only decipherable with appropriate encryption keys. Encryption protects customer data during payment transmission and authorization.
Your security measures should include fraud monitoring and detection. A PSP can help by delivering sophisticated systems to assist you in identifying fraudulent transactions—for instance, some new systems leverage AI and machine learning to review historical data and flag fraudulent patterns.
Other card-based payment security concerns include skimming and data breaches. Skimming involves illegally capturing card data from customers’ magnetic strips or chips by tampering with payment terminals. Data breaches happen when hackers access and leak customers’ private information. Robust security measures can help you minimize fraudulent card activity.
3. Online Bank Transfers
Online bank transfers, e-checks, automated clearing house (ACH) transfers and wire transfers are electronic payment systems that function using internet-based platforms and mobile applications. Your customers can use smartphones, PCs and other devices to transfer funds to your business electronically. Financial institutions and banks throughout the U.S. offer online banking platforms.
Online bank transfers offer customers a convenient, transparent and accessible purchase method that’s relatively secure. Still, there are some risks associated with electronic transfers—cybercriminals can leverage phishing, identity theft, malware and hacking to access sensitive data during transactions.
Data breaches, unauthorized transactions, payment input errors and technical glitches are also concerns to consider.
4. Digital Currencies
Digital currencies, also called cryptocurrencies, are a virtual form of money that uses cryptography to secure transactions. What sets digital currencies apart from traditional bank systems is that crypto uses decentralized blockchain networks.
Digital currencies are stored and transferred electronically using digital wallets. Your customers can access e-wallets through mobile apps, online platforms and programs.
Digital currencies work on blockchain technology. A blockchain is like a digital ledger that records all transactions transparently and securely. Each transaction is divided into blocks and added to a chain of previous blocks, essentially forming a transaction history.
When a user makes a digital currency transaction, the network of computers or miners verifies the activity. Once authenticated, the transaction is added to the blockchain. Each user has a unique digital signature to verify their identity and validate the transaction.
If your business accepts cryptocurrency, you will receive payment in entirely digital currencies—the released funds won’t be in U.S. dollars.
The nature of cryptocurrency makes it extremely difficult for anyone to counterfeit or tamper with digital currency transactions. Digital currencies enhance privacy and provide rapid, low-cost transactions. Plus, digital currencies are decentralized networks. That currently means no single entity, bank or government controls them, though cryptocurrencies may be more regulated in the future.
Your customers can use cryptocurrency across borders. Some of the risks associated with digital currencies include price volatility and regulatory uncertainty.
5. Peer-to-Peer
Peer-to-peer (P2P) payments use payment gateway solutions to complete transactions. These gateways directly link the customer with your business bank account, eliminating the involvement of intermediaries. P2P payments are incredibly lucrative for small businesses due to their low setup costs.
For P2P payment to work, both the sender and receiver need compatible payment platforms. A sender uses contact information like an email address or mobile number and types in the payment amount. Once payment confirmation is complete, money transfers from the sender’s account to the receiver’s account.
Popular P2P payment apps include Venmo, Cash App, Zelle, PayPal, Google Pay and Apple Pay.
Peer-to-peer payment platforms are typically safe and easy to use. That said, transactions cannot always be reversed—so users should be mindful of scammers.
Keep these privacy and security considerations top of mind when using P2P payment platforms for business:
Use strong passwords and biometric verification to access P2P platforms.
Only transact using secure and trusted networks.
Ensure your P2P platform uses end-to-end encryption to safeguard sensitive data.
Always verify information to ensure the funds you receive or send go to the correct account.
Regularly update P2P apps to leverage the latest patches and security updates.
Review transaction history often to detect any unauthorized transfers or discrepancies.
6. Contactless Payments
Contactless payments are a broad category. Common methods of contactless payment include using cards, mobile devices or wearables to purchase items without swiping or inserting anything into a payment terminal.
Contactless payments leverage near-field communication (NFC) technology and radio-frequency identification (RFID) cards that enable devices to communicate when in close proximity.
When your customers want to pay using contactless methods, they just need to hold their contactless-enabled device near your payment terminal to complete the transaction quickly and securely. The convenience and ease of use make it a frictionless payment method for everyday purchases.
Contactless payments can come through any credit, debit or prepaid card with touch-free functionality. This method also includes mobile payment apps like Google Pay and compatible wearable devices such as smartwatches or fitness trackers.
Accepting contactless methods means giving your customers a quick way to shop your store or pay for your services. Consider implementing safety features to maximize the benefits and minimize risks:
Set transaction limits and enable pins or biometric verification to complete high-value sales.
Only use trusted and secure networks to prevent unauthorized access or interception of data.
Monitor transactions for suspicious activity to protect against fraudulent purchases.
Choosing the Right Digital Payment Systems
Giving customers the flexibility to choose between different payment methods is a great way to set your business apart and provide exceptional experiences. Selecting the right digital payment methods is vital to your success. Keep these three factors in mind.
Security Features
Your customers depend on you to deliver payment methods that are safe and secure to use. You need an experienced solutions provider who will work with you to provide a robust security payment platform and guide you on the best solutions for customers.
Control
You need a digital solution that provides granular control over how, when and where payments can be made. This level of control enhances security and empowers customers to choose their preferred transaction method.
Consumer Needs
Whether you’re in retail, banking, insurance or any other sector, customers want flexible and tailored payment solutions. Customers value smooth experiences and a business that offers them choices. Providing innovative, frictionless payment experiences is critical in retaining your existing customers and attracting new ones.
How CSG Forte’s Digital Payment Technologies Help
CSG Forte will help you deliver the digital payment services your customers want. We have helped thousands of telecom, insurance, government and other industry merchants revolutionize and systemize their payments. We provide:
Secure and reliable solutions: We simplify the security of all your digital payments by leveraging built-in Payment Card Industry (PCI) compliance, encryption and tokenization into our platform.
A complete solution set: Our platform supports any digital payment process and method you need, which means you can give your customers the flexibility and customization they want.
Superior customer experiences: We help you offer hassle-free digital payment methods, saving customers time and effort when transacting. The result? First-rate customer experiences.
Contact CSG Forte for Frictionless Digital Payment Methods
With over two decades of experience and award-winning solutions, CSG Forte will assist in streamlining your digital transactions and enhancing customer experiences.
Implementing a Transparent Payment and Fee Structure in Property Management
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As a landlord or property manager, you must provide honest insights about your payment and fee structure to maintain positive relationships. Promoting financial education and transparency with your renters can reduce administrative burdens and effectively fulfill tenant expectations.
Explore the importance of providing your renters with financial clarity and learn how a high-quality payment processing solution can benefit your business.
Strategies for Creating Your Payment and Fee Structure
Landlords and property managers can use a few techniques to streamline payment processes and provide renters with insight into their expected payments.
The first step in providing clarity is sharing a comprehensive, detailed outline of all charges your renters must pay and their due dates. The following are some common examples of rental fees to include in this breakdown:
Monthly rent
Security deposit
Application fee
Pet fee
Late payment fee
Utility fees
Maintenance fees
Parking fees
Move-in or move-out fees
Homeowners association fees
Be sure to share all payment-related information in each lease agreement. Your tenants deserve straightforward communication regarding how much you expect them to pay monthly. These insights help them budget to pay you what they owe in full and on time, fostering a mutually beneficial relationship.
Avoid charging hidden fees — these can create distrust, financial stress and legal issues. In October 2023, the United States Federal Trade Commission proposed a new rule to ban hidden and bogus fees, so it is best to forgo charging unexpected costs that could complicate compliance in the future.
Consider sitting down with your tenants to review all this information in person before they sign their agreement. Taking the time to educate them on the entire payment process and how your management business determines these fees can help renters understand their financial responsibilities.
If you offer multiple payment options, such as direct deposit, credit or checks, share the expectations for each method and any considerations for ensuring their payments are on time.
2. Prioritize Ongoing Communication With Tenants
In addition to sharing a full breakdown of rental expenses with each tenant, continue communicating about financial changes with your renters throughout their stay at your rental properties.
Keeping them abreast of new rates, fees or payment processes is crucial for nurturing mutual respect. Encourage them to ask questions and foster an open dialogue, and promptly resolve any issues regarding payment-related inquiries. Responding quickly and honestly to your renters’ concerns will make them feel like a valued part of your community and can also increase tenant retention rates.
By maintaining an ongoing conversation with your tenants about your payment and fee structure, you can avoid surprises and help them proactively prepare to make their payments on time.
3. Use a Robust Property Management Payment Processing Solution
CSG Forte’s payment processing platform is one of the best ways for landlords and property managers to establish a straightforward payment and fee structure.
These solutions can simplify payment history tracking and monitoring upcoming payments through a secure tenant portal. Keeping detailed records of each transaction, receipt and statement offers convenience and clarity for managers and renters.
CSG Forte enables you to offer your tenants different payment methods, including credit, debit, e-checks, digital wallets and automated clearinghouse payments, improving their experience and satisfaction with your property.
The Importance of Payment Transparency With Your Tenants
Why is payment transparency essential for a successful property management operation?
Improving Tenant Trust and Satisfaction
Renters want to understand how you calculate and justify your rates so they know where their hard-earned money is going. When your tenants are well-versed in their monthly financial obligations, lease renewal expectations and how your management team handles transactions, it instills trust in your business.
Delivering transparent insights into your payment expectations and a breakdown of what each tenant owes can also increase their satisfaction with their living arrangements. Trust and satisfaction in your property management style can lead to higher tenant retention rates, benefiting your bottom line.
Avoiding Disputes
Circumventing unnecessary misunderstandings is another reason property managers and landlords should prioritize transparency with their tenants. Many people’s rent and living expenses are their most significant monthly expenditures, and knowing how much they owe ensures they can cover these costs. Ambiguity or confusion regarding financial matters can lead to frustration, strain and conflict. Avoid these issues by providing accurate insights and communication about their monthly bills.
Encouraging Timely Payments
Your tenants can manage their spending more effectively when they know how much rent costs, what additional fees will apply and when those payments are due. Communication regarding expectations prepares your renters to make timely payments. It also inspires more accountability, respect and professionalism between property managers and tenants, which can motivate renters to uphold their end of the lease agreement.
Timely payments positively impact your business’ cash flow and save your team from wasting valuable time and chasing overdue charges.
Building a Positive Reputation
Many potential tenants looking for a place to live will read testimonials and reviews about your property management company. It will impact your business’ reputation if your current or former renters believe you are not entirely honest about your fee structure or you charged hidden expenses they hadn’t anticipated paying. Negative attitudes toward your payment model can make filling those empty units more challenging and expensive.
Conversely, transparent communication regarding tenant expenses can foster respect and satisfaction, building your reputation as a respected and ethical choice for new tenants.
Get Started With CSG Forte Today
CSG Forte makes managing tenant payments easy for landlords and property managers. Our platform can help you reduce administrative burdens and deliver a better payment experience to your tenants.
We have extensive experience in the property management industry and understand the importance of delivering convenient payment solutions to your renters. The CSG Forte platform enables you to accept various forms of payment, and your tenants can set up recurring monthly payments to ensure their rent and fees are always on time and in full.
Handling returned non-sufficient funds (NSF) automated clearing house (ACH) payments accurately and efficiently helps businesses protect themselves from financial losses by minimizing the impact of unpaid transactions. Promptly addressing NSF returns through clear communication, compliant follow-up procedures and a timely resolution enables merchants to recover funds and prevent further losses. Streamlined handling can also help businesses maintain strong customer relationships, reducing the likelihood of service disruptions due to unsuccessful payments.
At CSG Forte, our recovery solutions can help equip your business to handle NSF returns effectively. Our re-presentment options enable you to recover the funds for each NSF payment at no charge to you. More importantly, these automated solutions save significant time and resources, allowing you to focus more on the responsibilities that matter most for your business.
What Is an NSF Return?
An NSF return in banking stands for non-sufficient funds, otherwise known as an ACH network payment that was returned due to its inability to be completed. This means the bank has refused to honor the payment because there isn’t enough money in the account to cover it. Having a check returned due to NSF is often referred to as having a “bad” or “bounced” check.
When the merchant processes the payment and the receiving bank returns it due to non-sufficient funds in the account, this situation can result in fees for both the payer and the recipient trying to collect the funds. These fees are known as NSF fees or returned item fees, which are charged to the account that lacks the funds to cover the payment.
How NSF Fees Work
NSF fees can occur as a result of a customer writing a check or making an ACH payment believing they have ample funds available for a transaction. For instance, let’s say a customer has $2,200 in their checking account and makes a purchase of $2,000 for your product or service. However, it turns out that customer had recently withdrawn $300 from an ATM and forgot to account for it.
Because of this oversight, let’s say the customer makes an online ACH payment for $2,000 when their bank balance is only $1,900. Their payment is $100 more than what they currently have available. It’s possible this payment could be returned due to NSF and incur a fee to the customer’s bank account.
FAQs About an NSF Return
A returned NSF payment can be complex to navigate and remedy. Here are some commonly asked questions about what to do when you receive an NSF return and how to avoid them in the future.
1. Are NSF Fees the Same as Overdraft Fees?
Anyone who has tried spending more money than what’s available in their bank account has likely been issued an overdraft charge or an NSF fee. Although many believe the two terms are interchangeable, there are some critical differences between them:
Overdraft fee: Banks typically charge overdraft fees when they allow a transaction to process that would have otherwise overdrawn an account. Customers can view an overdraft as a temporary loan from the bank, and they can expect to pay back the amount the bank covered plus an overdraft fee. For example, if you have $200 in your checking account and initiate an electronic check payment for a purchase of $230, the bank may accept the check. However, your account balance will be in the red by $30, incurring an overdraft fee. Overdraft fees have typically been around $35 per transaction for most large banks.
NSF fee: Banks commonly charge an NSF fee when an account lacks the funds required to cover a transaction and the bank doesn’t permit the transaction to process, resulting in a bounced check or denied electronic bill payment.
2. What Happens When an NSF Payment Is Returned?
When an NSF return occurs, a number of consequences may follow. The payor’s bank makes one of two choices:
Allow the Payment
The bank may decide to let the ACH payment or check post. This, however, would put the account holder into an overdrawn status. For some banks, this means the bank will charge a fee for overdrawing the account. The bank may continue to charge for each day or it can charge a specific flat fee to cover the amount that the account is overdrawn. These charges can end up burning quite a hole in the wallet.
Refuse the Payment
The bank may refuse to honor the payment. The bank will not allow the funds to be processed, and the account holder will likely be charged a fee just for issuing the payment without having funds available.
If a check is returned due to NSF, it could potentially sink the depositor’s account into overdrawn status, also initiating an overdraft fee.
3. What Do I Do When I Get a Check Returned Due to NSF?
Consumers who get charged an NSF fee will have to pay the fee as outlined in their bank’s policy. The merchant will likely try to contact the customer about the returned payment. This is an important step because an NSF payment isn’t always intentional.
The merchant can send a new bill for the original item the customer purchased, the NSF returned check fees and any fees received for trying to deposit an NSF payment. If possible, the merchant can try to deposit the payment again manually. However, this step should be taken with caution as there’s always a chance the check could bounce again and incur another fee. This is also can be a manual process for a merchant to manage.
Businesses that still do not receive payment may send a demand letter, hand the payment over to a collection agency or initiate legal actions in a small claims court.
Working with a trusted payments partner like CSG Forte can help merchants navigate arduous NSF payments and automate the process to make recovery simple.
5. How do You Protect Your Business From NSF Payments?
NSF payments can be very frustrating and costly to businesses that need to process the transactions. Some businesses decide not to accept ACH payments or checks at all as a last resort. For example, debit card payments are authorized in real time, enabling you to confirm that the customer has enough funds for the purchase. However, this choice limits payment options for your customers.
For many businesses, accepting paper and eChecks is a wise decision. This practice gives customers the flexibility of selecting a payment option that works for them—and many people want to simply have a payment come right out of their bank account.
But how can businesses handle NSF payments? It’s wise to have a plan in place so that when NSF payments appear, they aren’t a complete disaster. NSF re-presentment is your best option, as it allows you to recover the funds for each unsuccessful ACH transaction.
Some other tips for protecting your business against NSF checks include:
Create a check acceptance policy and ensure employees follow it.
Train staff on red flags to look for, such as missing the preprinted name and address or having a fake routing number.
Require ID verification when accepting a check in person.
Use a verification service like CSG Forte Validate+ before accepting payment.
6. Can I Redeposit an NSF Check?
Yes. It’s possible to recover the funds by attempting to re-deposit the payment once it is returned, also known as NSF re-presentment.
7. What Is NSF Re-Presentment?
When an NSF payment occurs, re-presentment will strategically re-present the payment at a later date. This way, the payment has another chance to clear. CSG Forte’s NSF re-presentment option lets you select the date you wish to re-present payments that are returned, enabling you to choose a time when you think there is a stronger likelihood that the funds are available with your customer base.
You may know, for instance, when your customer gets their paycheck. Scheduling NSF re-presentment on or directly after this date increases your chances of accessing the funds and clearing the payment.
The Benefits of Using CSG Forte’s Recovery Solutions
Whatever the causes, NSF payments cost your business valuable time and money. At CSG Forte, it’s our goal to help streamline payment processing and protect your business from potentially nefarious actors. Our recovery solutions allow businesses to automate the process of recovering NSF payments. We will attempt to re-collect NSF payments up to two times on your behalf for ACH payments, saving you significant time and hassle. Benefits you’ll enjoy with this service include:
Improved payment recovery: Our smart re-presentment functionality allows companies to re-present payment when they will most likely receive a recovered payment.
Boosted revenue: Besides receiving the complete value of recovered payment, your business will receive part of the collected NSF fee and experience a revenue share.
Nacha compliance: Recover NSF payments with peace of mind. Our recovery solutions meet Nacha regulations.
Reduce service disruptions: Enhance customer satisfaction by reducing service disruptions due to incomplete or returned payments.
How It Works
At CSG Forte, we make collecting NSF payments simple. When you’re hit with an NSF payment, our solutions will automatically attempt to recollect the ACH or eCheck payment up to two times. Here’s how it works:
Returned NSF payment: Our recovery solution automatically queues the payment for strategic re-presentment.
Automated re-presentment: Using our advanced re-presentment technology, we strategically reattempt payment.
Successful collection: If the collection is successful, your business will receive 100% of the face value of payment.
Unsuccessful returns: If we cannot successfully recover the payment for you, we’ll return the check to you so you can move into collections and get your funds back. With a 60% average recovery rate, we’re confident we can help your business collect payments and avoid returned payments in the future.
Get in Touch With Us Today
When a customer’s payment is returned, it results in frustrating service disruptions and cash flow issues. At CSG Forte, we’ve developed a solution to automate the process of reattempting and collecting payments lost to NSF checks at no cost to you. With our recovery solutions, you can minimize the risk of time-consuming recovery processes and focus on driving business growth. Contact us today to learn how one large enterprise organization recovered $78 million through CSG Forte’s recovery solutions.
Finding a Secure Approach to Accepting Phone Payments
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Credit card fraud is widespread—and it’s expensive for U.S. consumers. In fact, one recent survey found that 60% of Americans have experienced credit card fraud at least once, and 45% have been victimized multiple times. It should be no surprise, then, that according to a recent McKinsey & Company report, 69% of U.S. bill payers rank security as a top feature in the digital bill payment process.
One area of heightened risk is taking credit card payments from your customers over the phone. Your organization needs to get paid, and you can leverage tools to make taking over-the-phone and call center payments more secure.
Merchants who accept credit card payments must comply with the Payment Card Industry Data Security Standard (PCI DSS). Payment card brands may fine merchants up to $500,000 per incident if they aren’t PCI compliant at the time of a data breach.
Taking Credit Card Payments by Phone Can Be Risky Business
When consumers think of how contact center agents take payments, they often think of being asked to read off their credit card number, expiration date and card verification value (CVV) code over the phone.
If that doesn’t make you a little nervous, it should. Why? That method of sharing card information may increase the risk of credit card fraud for several reasons:
A contact center agent may write the credit card information down on a piece of paper or somewhere visible where another person could walk by and steal the information.
A disgruntled employee taking the payment may steal the credit card information, using it to make unauthorized purchases or obtain funds from the account.
The customer may be in a public place when reciting credit card details. Someone may overhear the conversation and jot down the credit card information.
Reading out a CVV code negates the reason for having it. This code is used to prove the payer has possession of the card at the point of payment. Someone who overhears and captures that CVV can use it to make card-not-present charges.
Discover Better, More Secure Ways to Take Credit Card Payments Over the Phone
Inbound and outbound interactive voice response (IVR): Customers can pay via IVR by using automated voice prompts and keypad inputs, eliminating all four problems listed above. The contact center agent transfers the caller to the payment IVR system. The customer enters the card number, expiration date and CVV on their phone keypad when prompted. The IVR system is integrated into a payment gateway to make the transaction and provide the customer with a receipt number. To make it even more convenient for your customer, you can leverage an outbound IVR, where a customer can schedule a time to receive an automated call to make their payment.
Live agent assist technology: Businesses can leverage payments technology to have contact center agents quickly send customers a link to a custom online payment page for payment. By using a solution like CSG Forte’s Payer Engagement Platform, contact center agents can easily create an invoice with a few clicks of a mouse and send it to the customer via email or text message. This allows customers to pay promptly and securely—without sharing their credit card information with the agent. This method of payment greatly reduces the risk of fraud, as well as the risk of exposing customers’ personally identifiable information, or PII.
The Payer Engagement Platform is a secure digital payment solution that enables customers to make payments using their preferred channel and payment method, at any time. By incorporating IVR and live-agent assist technology, businesses can ensure secure, efficient and customer-friendly payment processes that minimize fraud risk and protect sensitive information.
Contact us to learn how the Payer Engagement Platform simplifies bill payment, improves customer experience and reduces fraud exposure.
Securing Merchant Gateways in the Era of Effortless Experiences
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Many merchant service providers (MSPs) now offer online portals that allow merchants to manage transactions and accounts, often with integrated virtual terminal capabilities. These gateways can streamline customer experience (CX) and backend operations to drive efficiency, satisfaction and clear communication. However, they are also prime targets for fraud.
Most merchants understand this risk and have taken great strides to balance consumer data privacy with effortless, satisfying experiences. Fewer, though, realize the fraud risks associated with merchant gateways aren’t just about customers. Just as bad actors can access customer information through these attacks, they can access a merchant’s proprietary documents, banking information and other high-risk areas of a digital ecosystem.
Then, thanks to real-time processing, hackers can make changes (or withdrawals) before the merchant has time to react. Given the speed of these transactions, merchants’ growing attack surfaces and the increased adoption of real-time payment gateways, it’s not just important that merchants who opt to use the tool prioritize cyber best practices. It’s vital to their survival.
What’s the Big Deal?
On the macro level, the impact of these attacks on merchants and other organizations is significant and growing rapidly. According to Sifts Q1 2024 Digital Trust and Safety Index, account takeovers (ATOs) cost merchants $38B in losses last year, and that number is expected to balloon to $362B by 2028. The organization’s Q2 Index found that 78% of businesses now face artificial-intelligence-enabled fraud risks consistently.
For individual omnichannel and digital-first merchants, attacks on payment gateway portal accounts present a serious threat, and they’re far more damaging than typical attacks on online shopping accounts. When a cybercriminal hacks into a payment gateway, they can quickly access the host merchant’s account and transfer money directly into their own. Imagine the panic of discovering that your hard-earned funds have vanished without a trace.
These criminals have a variety of tactics at their disposal, which makes prevention, detection and response difficult. Upon breaching a merchant account, the hacker might turn off notifications so the merchant is unaware when fraudulent transactions occur. They may change account contact details, so alerts about unauthorized activities are deactivated.
Worse yet, hackers who successfully access an account can run ACH credit transactions to tap money from a merchant’s bank account to their own. Many will alter bank information and other sensitive details to make it even harder for merchants to regain control of their accounts. It isn’t just a minor inconvenience; it’s a potentially business-crippling event. Once an attacker has access to the merchant’s account, there’s little hope of recovering the losses.
You Can Never Be Too Secure
Though cybercriminals and ATO attacks can be devastating, there are plenty of steps merchants can take to protect themselves. This includes the typical recommendations, like using complicated passwords, investing in credential managers and prohibiting employees from saving login details in browsers. However, given the increasing frequency and severity of these attacks, merchants may want to go a little further in their efforts to protect themselves from fraud.
Achieving that goal starts with the merchant’s MSP choice. When choosing a partner for payment gateways, it’s not just about the surface-level touchpoint the vendor can offer end users. Merchants must also verify that the MSP they choose offers the security tools necessary in the current cyber landscape, including:
IP-based restrictions: These settings allow merchants to configure gateways to restrict users from logging in to their accounts based on location. This helps prevent account takeovers, even if the password is compromised.
Granular roles and permissions settings: The more granular a gateway’s permissions and custom rules capabilities, the more precise a merchant can be about who gets access to what. This allows merchants to limit each user’s access to only the elements of the account that are necessary to their role—which means fewer entrances to sensitive areas of the system for hackers to exploit.
Multifactor authentication (MFA) requirements: This security mechanism requires a user to verify their identity through two (or more) methods. The extra step(s) protects accounts with compromised login credentials with a time bound authentication code that must be verified via a secondary touchpoint like a SMS, Phone call or an email different from the primary one.
Authenticator app: Varied and a better form of MFA, in which the authentication code is generated locally and is not intercepted by cybercriminals or stolen because of a SIM takeover.
Passkey authentication: Passkeys differ from MFA in that there is no password to enter. Instead, the system creates unique public and private keys for every online application or site, device and user identifier, then matches the keys to their public counterparts to confirm identity and grant access. By removing traditional credentials from the process, this approach leaves traditional phishing nearly useless, as there is no password or username to steal. It doesn’t make accounts unhackable, but it does make executing a fraudulent login much more complex and less dependent on human error.
Transaction Risk Management: AI/ML-based models that instantly score an incoming transaction for fraud based on several parameters such as the transaction history, payment methods used, location, time of the transaction, the average amount of the transaction etc. These models allow merchants to customize the base model to suit their business needs.
The above represent just a few of the many possible tactics a merchant could use to firm up operations against ATOs—and a strong MSP in today’s market should offer all of them and more. This proactive approach not only mitigates financial risks but fosters trust with customers and stakeholders, leading to happier, loyal customers.
Securing Merchant Gateway Against Intruders
To protect merchant gateways from fraud can’t just be a priority; it must be a necessity. In today’s increasingly digital world, safeguarding sensitive data is an end-to-end imperative, and it must be a part of every decision. After all, the stakes are high! A single fraudulent incident can expose customer data, tarnish reputations and jeopardize future success.
A smart MSP will understand that and embrace its role as a supporting partner to merchants as they seek to delight and protect customers. Together, MSPs and merchants can fortify defenses against fraud and unauthorized access to maintain resilience, safeguard reputations and get back to what matters: delivering effortless and secure experiences that drive customer trust, lasting loyalty and business growth.
If you’re ready to elevate your payment security and protect your business against cyber threats, now is the time to act. Discover how CSG Forte’s advanced payment solutions can provide the robust security measures you need to stay ahead of fraud and ensure the integrity of your transactions. Contact us today to learn more about how we can help you build a secure, trusted and seamless payment experience for your customers.
Build or Partner? Embedded Payment Processing for ISVs
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“Why don’t we just build our own?”
A homegrown payment processing solution can seem appealing to independent software vendors (ISVs). Many ISVs consider building their own systems to lower costs, benefit from additional revenue share, customize the customer experience and maintain direct control over the entire transaction.
While the idea of developing an in-house solution is tempting, it can come with hidden baggage. The upfront savings aren’t always enough to offset the added risks and responsibilities assumed by ISVs that choose to process their own payments. On the other hand, partnering with a payments vendor offers ISVs plenty of advantages that might outweigh the allure of becoming a payment processor. How can you determine which option is right for you?
In this blog post, we’ll explore the factors ISVs need to assess when deciding whether to build or buy a payment processing solution.
What It Takes for ISVs to Process Payments
In addition to facilitating transactions, ISVs that build their own payment processing solutions are on the hook for several critical functions that aren’t readily visible. Managing risk and charge disputes, onboarding new clients, remaining legally compliant and preventing fraud all fall under the ISV’s purview. Mastery of the following roles is essential to creating a seamless and secure payment processing system:
Risk management: Performing due diligence is an essential first step in processing payments. Not all prospective clients have pure intent—verifying a merchant’s identity and having security checks in place helps insulate the business from risk. ISVs must be prepared to evaluate each application before accepting it.
Onboarding: Onboarding clients is a process in itself. Once a business is approved, providers must seamlessly integrate their system with the payment gateway before they can begin to process transactions. After the account is set up, they’ll need ongoing training and support to use the new platform effectively.
Dispute management: Transactions don’t always go according to plan. When customers have insufficient funds or contest a charge, payment processors must evaluate the likelihood of winning the dispute before accepting it or requesting additional documentation.
Fraud prevention: Cybersecurity is an ongoing job for payment processors. They must continuously monitor for unusual activity to predict and quickly detect fraud. For ISVs that process their own payments, fraud prevention is particularly important as they would be assuming full liability.
Compliance: Payment processing is a highly regulated industry. ISVs must understand and adhere to ereporting guidelines for card brands they acquire and banks they’re working with as sub-merchants to remain legally compliant.
Why ISVs Partner With a Payments Solutions Provider
Building a robust payment processing system from scratch is risky and resource-intensive, which is why many ISVs choose to outsource the entire cycle or parts of it they don’t want to handle in-house. But beyond managing the hidden headaches, there are additional benefits to trusting an experienced partner with payment processing:
Faster speed to market: Bringing in an external payment processor eliminates the learning curve for ISVs. They can execute efficiently and quickly integrate an ISV’s existing software with an API.
Reduced PCI-DSS and security exposure: If an ISV processes their own payments, they store sensitive payment data that opens them up to greater exposure. They are also subject to stringent PCI-DSS security standards. Working with a third-party absolves ISVs of this burden.
Better scalability: As the business grows and needs to process more transactions, an established payments partner can help ISVs adapt and scale more quickly and securely than reworking the system themselves.
Expertise and support: Some of the functions required to process payments—like underwriting and risk management—require expertise that many ISVs do not already have in-house. Instead of adding new talent to their teams, they can outsource these duties to an experienced partner that already has certifications and connections in place that would otherwise be time-consuming and costly to attain.
How to Know the Right Choice for You
Deciding whether to build or partner to integrate a payment processing solution is a complex decision that requires careful consideration. Each ISV must weigh the unique challenges and potential benefits of both options to determine the best path forward for their specific business needs.
ISVs can ask themselves the following questions to assess their preparedness for building a payment platform:
Readiness: What is the size and maturity of my business? Have I explored all my options related to optimizing payments and reducing processing costs?
Costs: Am I prepared to cover the additional costs required to build and maintain my own payment processing platform? What talent would I need to hire to have the necessary expertise in-house?
Time: How long will it take to become a payments processor? Can I afford to wait that long?
Risks: What is my risk tolerance, both for financial losses and reputational risks? Am I comfortable assuming liability as a payment processor?
Finding the answers to these questions will prepare you to take the next steps forward in building or buying a payment processing solution as an ISV.
Choose a Payments Partner That Can Grow With You
Ultimately, ISVs want to ensure the payments experience feels like a seamless part of their software, which might initially make building their own platform look like the best path. But the right payments partner can help ISVs achieve that—while also taking the strain of processing payments off their shoulders.
CSG Forte grows alongside your business. Whether you’re at a stage where you want to offer payment acceptance within your software or you’re ready to become a payment facilitator, CSG Forte’s flexible partner program is designed to scale to your needs. We make it easy to ramp up your offerings on an a-la-carte basis as your business grows, until you’re ready (or not) to take on the whole process.
Contact us today to discuss how our integrated payment solutions can support your goals, no matter where you are on your journey.
How To Choose a Payments Partner for ISVs
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Need to add a payments partner to your existing ecosystem? Or introduce the first one to your platform? There are plenty of options out there. But to keep it easy and keep costs down, you’ll have to find a reliable payments partner for easy integration.
Choosing the right payments partner is an important decision for independent software vendors (ISVs) aiming to improve the user experience and keep customers happy. A strong partnership leads to smoother transactions, fewer risks and greater trust. A weak one may breed confusion and frustration.
When selecting an integrated payments partner, there are many factors ISVs must weigh in their decision-making. We’ll focus on the most critical considerations to prioritize, and we’ll recommend four questions to ask any potential payments partner.
What Should ISVs Look for in a Payments Partner?
The payments partner you choose can be the difference between a streamlined integration and a protracted headache. Given the complexities involved, ISVs must carefully consider whether or not a partner aligns with their business needs. From APIs to developer support, ISVs should start by looking for these essential criteria when assessing potential payments partners.
One of the most critical aspects ISVs should evaluate is the quality and functionality of the payment partner’s APIs. A well-documented and flexible API means fewer roadblocks during implementation and a better ability to customize the user interface (UI). Presenting an intuitive UI becomes particularly useful in industries like government or healthcare, where there is a broad range of technological savvy amongst users.
ISVs should look for APIs that are fully controlled and fully developed, with the ability to capture information quickly and support the full lifecycle of the merchant journey—from onboarding to processing and refunding to disputing transactions. Having a robust API gives ISVs faster speed to market, freeing you up to focus on your core product.
Equally important is the availability and clarity of developer documentation.
Comprehensive, easy-to-understand documentation is essential for an ISV’s developers to implement and troubleshoot the new payment solution effectively. Detailed guides, code samples and FAQs can accelerate the integration process and minimize errors. When documentation is regularly updated, ISVs are always aware of new features, updates and best practices, keeping payment systems current and efficient.
Innovation Roadmap
Payment systems need to keep pace with changes in regulation, security and technology, That’s why you’ll want to know the development and innovation track the provider follows.
Make sure your payment partner’s product roadmap aligns with your industry-specific needs and emerging trends. A partner that demonstrates a clear understanding of your sector and is proactive in addressing future challenges will ensure long-term compatibility and success.
Look for payment providers that have consistently attained their roadmap goals, showcasing their ability to deliver on promises and keep pace with innovation. Strong customer testimonials are also key evidence of their effectiveness in real-world applications. Industry recognition and awards from respected payment research firms, too, can point to their reliability and forward-thinking approach.
Dedicated Technical Payment Expertise
Even with excellent APIs and documentation, having access to technical payments experts maximizes the benefits of a new payment solution for ISVs. It also ensures ISVs are adhering to industry standards and best practices, compliance regulations and niche functionality of the processing platform. A payments partner that provides personalized support can help resolve issues faster, minimize wasted time, tailor solutions to your specific needs, and inform you of new releases and their impact on your integration.
ISVs should look for a payments partner that solicits input from their clients and makes its experts accessible, helping them understand best practices for the platform. Dedicated support optimizes integration and reduces downtime, which helps ISVs and their users get the most value from the payments platform.
Flexible processing models
Finally, ISVs must consider the flexibility of a potential payment processing model. Can their partner support a quick, easy and hands-free referral partnership? Or equip them to support an embedded payments model that provides a great user experience and financial benefits? Your business needs will evolve over time, and your payments partner should be able to scale with you. Look for partners that offer scalable solutions, transparent pricing, robust partner-level research, and the ability to automate transaction and account management.
Flexibility in processing models ensures that as an ISV’s business grows, their payment solutions remain efficient and cost-effective, supporting expansion without unnecessary—or costly—complications.
4 Key Questions ISVs Should Ask When Choosing a Payments Partner
How can ISVs determine whether a payment service provider will check all the boxes?
Here are four essential questions ISVs should ask before signing on the dotted line:
1. What does the contractual agreement entail?
When you sign up with a new payments partner, is what you see what you get?
Understanding the complete terms of the contractual agreement is the first question to ask a provider. ISVs should inquire about the length of the contract, any automatic renewals and the flexibility to adjust terms as their business evolves.
2. What is the pricing structure?
Likewise, ISVs need to know a potential partner’s pricing and fee structure. What are the commission rates? Are there any additional fees or hidden costs that could impact the overall profitability of the partnership?
Compare the effective revenue share after accounting for all associated fees. This helps ISVs guarantee they are getting a fair deal and accurately predict the costs involved.
3. Do ISVs gain visibility into the onboarding process?
Efficient onboarding means faster speed to market and less stress for ISVs. Transparency expedites the process. How much visibility will the payment service provider offer?
ISVs should ask potential partners about the steps involved in onboarding new merchants and how long it typically takes. When an application is pending approval, will you know what’s going on behind the scenes? Or will miscommunication drag out the process, leaving money on the table and frustrating customers?
It’s important to understand how the payment service provider manages these stages to stand up new merchants with minimal delay. If an ISV can stay informed each step of the way, then can intervene when necessary to catch errors early and keep things moving.
4. How will ISVs realize their revenue?
ISVs need to understand the functional differences in the transaction processing offered by a payments partner. Ask to model scenarios based on how you intend to use the provider’s platform. Then you can determine how you can fully realize the revenue you expect.
Choose a Payments Partner You Can Trust
The payments partner you choose carries serious implications for your long-term business efficiency and growth. Transparency is the foundation of trust: Do you know if the provider will keep you informed every step of the way? When things go wrong, are you right on the front line, or the last to know? ISVs need to have confidence that the provider they choose will be a true partner.
Use an experienced payments partner that is not only easy to integrate with, but also easy to do business with. CSG Forte’s flexible processing models, comprehensive support and transparent pricing give ISVs a reliable partner that can adapt to your future needs.
Contact us to learn how we can help you achieve an easy integration and support your business growth.
Recurring Payment Systems: How a Great One Can Boost Your Bottom Line
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Your payments platform is supposed to be drawing revenue, right? Unfortunately, poor payment processes could be costing you—both customers and money. How can that be? Complicated, disjointed payment processes can frustrate customers, eroding trust and leading them to choose a different provider. On the other hand, providing the right payments platform makes it easy for customers to keep paying their bill and for you to keep growing your business.
Generating consistent revenue is critical for any business, and having a robust recurring payments platform is a key factor to making that happen. But not all systems are created equal. The best payments platforms have several key features that distinguish them from competitors and can have a significant positive impact on your bottom line.
Payment scheduling: Customers have enough to remember without having to mark their calendars to pay a bill every month. Automating the collection of regular payments helps ensure customers pay their bill on time and consistently (weekly, monthly, annually, etc.).
Payment processing: No one remembers their credit card number or account information, and digging a card out to make a payment is a pain. Automating the payment process (ACH, credit cards, etc.) ensures customers can make consistent and timely payments without the need for manual input, making customers happy and helping your business run smoothly. Additionally, using a payment solution that leverages tokenization for recurring payments ensures payment data is kept safe and out of your systems.
Invoicing and notification capabilities: Customers like surprises, but not on their bills. Automating your company’s invoicing and payment notification capabilities means your customers are informed about their payment amounts, including any changes, enhancing transparency, satisfaction and reducing missed payments.
Recurring Payment System Must-Haves
Many businesses rely on recurring revenue models to ensure steady growth and financial stability in today’s digital, often subscription-based, purchasing world. Their payment systems are the engines for those models, powering customer satisfaction, operational efficiency and revenue consistency. A payment system must offer a range of features that cater to both the business’s needs and the customer’s expectations, such as:
Customization and automation: The best recurring payment systems offer customization and automation options. Customers can choose different payment schedules or methods, and browse available plans, current promotions and key features, allowing them to feel in control of their options. Automated retries for failed payments help reduce customer frustration and missed payments.
Security and compliance: The best systems ensure Payment Card Industry Data Security Standard (PCI DSS) compliance for card payments, implement strong data encryption and have robust fraud detection measures. Leveraging tokenization can also help ensure recurring payment data is kept secure. Trust and security are crucial for building long-term relationships with customers.
Self-service options: A great recurring payment system has intuitive user interfaces for payment management, empowering customers to manage their payments gives them a sense of control, which increases satisfaction and loyalty. Making it simple for customers to change or cancel their recurring payments is also a key feature that helps keep them returning to your site.
Juniper Research Can Help You Choose the Right Payment System
Juniper Research, a leading analyst firm in the mobile and digital tech sector, predicts that recurring payments will present a $15 trillion opportunity by 2027. “This means now is the time for vendors in the space to stay agile and embrace customer choice,” said Nick Maynard, VP of fintech market research at Juniper Research. “CSG consistently surpassed our evaluation criteria for innovation, user experience, compliance and security in a highly competitive field.”
Juniper Research recently recognized CSG Forte Engage at the 2024 Future Digital Awards for Fintech & Payments, awarding CSG a Platinum win in the Omnichannel Payments Platform category and Gold in the Recurring Payment Platform Innovation category. Juniper identified Forte Engage as a standout recurring payments platform because it “offers a true omnichannel experience to help improve customer satisfaction and engagement while mitigating late, failed and abandoned payments.”
CSG Forte Engage can help your company increase its revenue and reduce customer churn while complying with evolving security requirements. Here’s how:
Increased revenue and predictable cash flow
A reliable system ensures on-time payments and reduces missed revenue opportunities.
Automation reduces errors and streamlines manual work for billing teams, cutting down on administrative overhead.
CSG Forte Engage scales easily with your business as your customer base grows.
Customer retention and reduced churn
Smooth multichannel billing experiences improve the customer experience and increase brand loyalty.
Easy payment management and flexible billing options lead to longer customer lifecycles.
By investing in the right payments system now, you can prevent facing costly migrations in the future. The best recurring payment systems, such as CSG Forte Engage, stand out for their flexibility, automation, security, integration and superior customer experience.
You can accept and manage recurring payments easily with CSG Forte. Schedule payments, verify accounts, handle returns and minimal downtime with our robust payment platform. Contact CSG for more details or sign up today.
Deferred Payments vs. Installment Plans
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Purchasing a good or service from your business may be more manageable if the customer can break up their payment or settle their balance at a later date. The revenue will still come your business’s way in the future, while the flexibility can convert some undecided leads into paying customers. Deferred payments and installment payments are two options that make purchases easier for the customer.
At CSG Forte, we help businesses drive revenue by providing tailored payment solutions that are compatible with flexible structures.
What Is a Deferred Payment?
Deferring a payment means the customer can access the product or service now and pay in full at the end of a three-phase process.
The first phase is the purchase agreement. You provide what the customer needs with little to no upfront expenses. The customer agrees to submit a deferred payment, meaning they will settle up in full later. You and the customer enter a purchase agreement that includes a deferral due date.
The second phase—the deferment period—is the time between the agreement and the payment due date. You can send due date reminders to your customers during this time, either independently or through the payment service provider.
The third phase is the payment period, which begins on the payment due date. Your customer is responsible for paying the full balance at that time. Some deferral agreements allow the customer to begin a payment schedule starting on the due date.
Common Reasons to Defer Payment
Deferred payment is an option when the customer needs a product or service immediately but has immediate financial constraints. Common deferred payment use cases include:
Business-to-business (B2B) transactions: Businesses can receive essential products and services quickly and agree to a deferred payment date.
Retail purchases: Consumers can take home expensive goods to use that day with payment deferred, meaning they can repay the merchant later.
School tuition: Universities and student tuition financers set due dates after the student receives some or all of their education.
Healthcare: Practitioners often provide the care patients need when they need it, then allow patients to pay the bill later.
What Is an Installment Payment?
An installment payment is one a customer submits as part of a payment plan. Within this structure, you provide access to the good or service that your customer needs. The customer agrees to repay their balance over time in regular installments.
Many installment plans require monthly payments with a minimum amount. Customers can submit payments manually on or before their due date or schedule automatic withdrawals from their bank account through Automated Clearing House (ACH) processing. Many agreements allow customers to pay more than their minimum amount for faster reconciliation and lower interest.
Your business can offer installment options independently or with support from a third-party payment service. A payment service provider will grant access to merchant- and customer-facing resources curated and managed by a business that specializes in payment collection.
Common Use Cases for Installment Payments
The installment payment model is a common solution for large B2B and business-to-customer (B2C) transactions. Some examples include:
Consumer purchases: Consumers can enter an installment agreement when purchasing expensive items such as appliances, furniture, electronics or music equipment.
Inventory and equipment: Businesses might enter installment plans to finance the purchase of equipment, materials or products essential to their revenue.
Real estate and car financing: Financing options for major purchases require monthly minimum installments with interest.
Credit card payments: Credit cards grant consumers and businesses purchasing power with a purchase limit and installment requirements.
Common Benefits From Deferral and Installment Agreements
Deferring or dividing large payments can benefit the merchant and consumer alike:
Increased sales: Offering a lower upfront cost boosts conversion rates and creates room to upsell.
Tax deferral: Deferring earnings allows businesses to disperse the earnings of one sale across numerous statements.
Customer benefits include:
Immediate access: Deferral grants immediate access to valuable goods and services.
Financial planning: Consumers can form a savings plan and budget with a set date in mind.
Buying power: Customers have funds available to complete other pressing transactions that impact their cash flow.
The Key Difference Between Deferral and Installment
While deferral and installment agreements share some common principles and benefits, installments offer advantages over deferral:
Cash flow: An installment agreement establishes a payment schedule and disperses the entire balance across those dates, creating consistent revenue from one sale.
Recovery: Installments allow customers to pay smaller amounts that are easier to include in their budget than a lump-sum payment.
Bookkeeping: Revenue from installments enters the books as you receive it, meaning you report the revenue you have received and not what your customer still owes. Deferred revenue requires revenue recognition as a debit or amount owed.
The Challenges of Deferred Payments and Installment Plans
Deferred payment means deferred revenue, just as fractional installment payments mean fractional revenue. You can still factor the money from a deferred or dispersed payment into your budget, but be careful—a default could leave you with less than you need to fulfill your own obligations. Customer defaults could also impact your credit score.
CSG Forte’s Tailored Solutions for Payment Plans
At CSG Forte, we support merchants’ installment agreements by developing complete payment solutions that help to mitigate customer default. We implement dependable collection strategies and innovative technology to facilitate installment agreements and maximize recovery.
With our platform, your customers will experience a smooth, secure payment process that connects you with the revenue you earned. The automated communication systems will deliver timely messages reminding customers of due dates and account balances. Customers can pay how they prefer by using a credit card, debit card or ACH processing. The software integrates seamlessly with your existing accounting programs.
We set our platform apart by implementing features and capabilities like:
Seamless integration with business operations
Enhanced data security and fraud prevention measures
Ongoing support from our customer service department
A user-friendly interface for your business and your customers
Cross-Industry Success With CSG Forte’s Installment Payments
