What’s a payment channel?

Since all of our recent chatter about omni-channel is centered on multiple channels, here’s a quick breakdown on payment channels and what we offer.

A payment channel is basically any way that a customer might make a payment or anywhere that you (as a merchant) might accept a payment. This is slightly different from retail channels, which might include bricks-and-mortar, catalogs, and online shopping/eCommerce sites. Payment channels are generally related to these retail channels, but are more specifically how the payment might be made: physical POS systems, phone/IVR payments, online checkout solutions, and mobile payment options, for example.

So these correlate to retail channels, but leave some room for overlap. For example, at a bricks-and-mortar retail channel, you might process payments on a physical POS system (ie the cash register), as well as on smartphones or tablets within the store. Your catalog might accept payments by phone, but also integrate nicely into the omni-channel concept so that customers could walk into your bricks-and-mortar store to pay at the POS, or they could shop the catalog online and pay via online checkout. There is a relationship between payment channels and retail channels, and since you definitely want to start creating a cohesive experience via omni-channel, it’s important to consider what payment channels you might implement.

CSG Forte offers full payment processing support for the following channels:

Physical POS

We can supply card readers, help build a solution with our Virtual Terminal that turns existing computers into instant workstations, and more.

Phone/IVR

Comes with your own toll-free number and script-building assistance.

Mobile payments

Use the iDynamo and our mobile app to instantly take payments on smartphones and tablets.

Online payments

Our new Checkout is smart, speedy, and stocked with options.

You can accept both credit cards and electronic checks on any of these channels, and each channel comes with our cloud-based Virtual Terminal for transaction management and our powerful payment gateway services. All of the reports funnel into the Virtual Terminal, so you don’t have to worry about piecing things together on your own.

These payment channels don’t necessarily have to correlate only to retail, as well. Government agencies could implement online payments to accept taxes on the web and build a smart physical POS system for in-office payments. Veterinary clinics, dance studios, and other businesses can all benefit from considering an omni-channel approach.

And what’s easier than setting up all of your channels with one company? Get started with CSG Forte today. Give us a call at 866.290.5400 to see what we can do for you.

 

Cryptocurrency: Explain it to me like I’m 5

If you were paying any attention to rumblings in the payments industry in the mid-2000s, you probably heard someone say the words “Bitcoin,” “cryptocurrency” or “blockchain.” Following these utterances, you probably met the stare of the person talking to you with either a blank look or a look of skepticism, as you probably connected these terms with the dark web and nefarious purchases.

Now, cryptocurrency, and Bitcoin in particular, is becoming more mainstream – even if many Americans are still confused by the mysterious world of digital currencies. Many skeptics consider digital currency to be a speculative bubble. Some consider cryptocurrency to be the future of payment processing. Either way, let’s hop into the discussion to explain what exactly cryptocurrency is and why it should matter to you.

What is a cryptocurrency?

Cryptocurrency is the general name given to represent different digital coins. Many people are most familiar with Bitcoin, but there are various altcoins that compete with Bitcoin in different ways. Ethereum, Ripple and Litecoin are some major altcoins you may have heard of (but there are others in the market).

Ethereum, Ripple and Litecoin operate a bit differently from Bitcoin. Bitcoin operates off a blockchain, which essentially is a digital ledger of all transactions that occur with the specified cryptocurrency. To put it really simply, the blockchain is managed by ledger-keepers, who are also called “miners.”

While trying to explain the inner-workings of blockchain gets super technical (just think really, really big computers with lots of processing power), just know the ledger-holders must all agree on any changes to the blockchain for every transaction. This keeps everything (the ledger, your transactions and so on.) accurate and secure. For Bitcoin miners, they can earn a specific number of Bitcoin just by keeping track of the transactions that occur – also commonly called “mining.”

How does cryptocurrency work (and why do people like it)?

Cryptocurrency is founded off the idea of decentralization. Unlike most payment options to-date, cryptocurrency has no general need for the intermediary, i.e. the banking system. This intermediary system has been integral in maintaining the integrity of our monetary system.

Banks, especially when it comes to digital transactions such as stocks and non-cash transactions, help validate transactions. This is especially helpful in preventing “double-spending” in which a transaction is replicated, primarily through error or from a matter of hacking. The claim that Bitcoin makes, however, that that the blockchain system is more secure than any banking system, processes transactions faster than any bank can dream and gives the transactional authority back to the person who holds the money.

Cryptocurrency in its essence is a peer-to-peer method of transacting business – and it’s for this reason that cryptocurrency got a bad rap in some circles. People who have been in-the-know about cryptocurrency remember the coins being used to fund dark web transactions and other (sometimes illegal) enterprises. No longer is this the main use case, however. Now, people who own Bitcoin and other altcoins can use their money to purchase items found on the common market.

Whether you believe that cryptocurrency is just a flash in the pan of the payments industry, or you believe cryptocurrency to be the future of our global economy, most can agree that it’s an exciting time to witness the volatility and growth of these digital markets.

SEC Code Glossary: A Quick Guide to Entry Class Codes

In the world of electronic payments, NACHA (National Automated Clearing House Association) governs and dictates the regulations for processing electronic transactions through the Federal Reserve. The regulations are very serious, utilized in legal proceedings regarding transactions and relied upon by banks, payment processors, and both federal and state governments. NACHA keeps the order for the industry, and it’s important to abide by every one of their regulations.

Whenever a transaction is submitted, NACHA needs an SEC code along with it.

What is an SEC code?

SEC stands for “Standard Entry Class,” and is basically a code that denotes the way a customer authorized a payment. When you apply for payment processing, sometimes you will find that certain types of payment methods are associated with lower costs.

For now, we’re going to give you a quick glossary of SEC codes for easy reference.

POS/POP

POS (Point-of-Sale) and POP (Point-of-Purchase) entries refer to single debit payments made in-person via credit/debit card (POS) or converted check (POP). Both the card and/or the check are used to record the account information in association with the payment, and the original method of payment is then returned to the customer.

PPD

PPD (Prearranged Payment and Deposit Entry) refers to Direct Deposit entries and any Preauthorized Bill Payment applications. In this way, these payments can be both debits or credits (meaning funds can be removed or deposited into an account) and either single or recurring (occurring as a one-time payment or scheduled multiple payments).

WEB

A WEB (Internet Initiated Entry) is simply any debit via the Internet. These entries may be single or recurring.

These debits must be authorized by the receiver via the Internet. In other words, if the authorization itself was actually received in person, via U.S. Mail or by phone, for example, even to actually suffice for a payment from the Internet – it’s not really a WEB entry. However the authorization was received is how the transaction must be classified via the SEC code.

Also bear in mind you may only initiate a credit here as a reversal of a WEB debit. You can’t submit a credit using the WEB entry code.

TEL

TEL (Telephone Initiated Entry) entries are single debit entries authorized via the telephone. In this oral authorization entry there must be a pre-existing relationship between the receiver (person authorizing the payment) and originator (person/entity receiving the payment). If there is no relationship already in place, then the receiver has to make the phone call.

Additionally, all TEL transactions have to be recorded and kept on file for a minimum of two years from the date of the transaction. If the transaction is not recorded, then the originator needs to provide the receiver with a written notice that confirms the oral authorization before the payment settles.

CCD

A CCD (Corporate Credit or Debit) is also known as “Cash Concentration or Disbursement.” These entries can be either a credit or debit – and occur specifically between corporate entities. It can be a single entry or recurring.

All business bank account transactions are listed under this SEC code. A signed authorization has to be obtained either separately or included in the contract between the businesses prior to the transaction date.

ARC

An ARC (Accounts Receivable Entry) is defined as a check conversion that is originally received via the U.S. Mail. This includes the USPS (United States Postal Service), as well as courier services like FedEx and UPS. According to NACHA, this does not include personally delivered or night drop-box items. Corporate checks are also not included.

There’s also a slight change you’ll run into these less common SEC codes:

CTX

CTX (Corporate Trade Exchange) entries are initiated by originators to pay or collect their obligations. The funds are transferred to other organizations and so mirror the same business entity requirements as the CCD entry code. Both credits and debits are allowed.

RCK

The RCK (Represented Check Entry) entry refers specifically to single debits that occur as a result of check representment. Check representment occurs after an item is returned NSF (Non-Sufficient Funds), or is bounced. The service will simply represent the check at a later, scheduled date after it is returned. Some businesses choose to initiate check representment in order to attempt to recollect their funds. For merchants that use RCK entries, a notice must be displayed visibly at the POS.

BOC

BOC (Back Office Conversion Entry) entries are single debit entries that are initiated by source documents (checks) received at POP or manned bill payment locations (in-person). These checks are collected first then converted to ACH during back office processing.

CIE

A CIE (Customer Initiated Entry) is a credit initiated usually through a bill payment service by an individual. These are meant to pay an obligation.

XCK

The XCK (Destroyed Check Entry) refers to a replacement entry that is initiated when an original check is unreadable, lost or destroyed and cannot be processed.

 

Electronic Payments: A Brief History

Imagine. You want to purchase a doughnut at the local bakery, but instead of handing over your credit card, you reach into your pocket and pull out a few grains you picked on your farm earlier that day. After all, the baker can use the grains to make more dough. Seems crazy, right? However, the barter system was a cornerstone of transactions in our early history. Lucky for us, advances in payment acceptance means you no longer are tied to your farm (in fact, you don’t even need to have a farm nowadays). But the biggest advance in payment acceptance isn’t particularly tangible. Why? Electronic payments. The invention of electronic payments makes receiving and making payments online, via mobile and at the point-of-sale a whole lot simpler.

A Brief but Important History of Electronic Payments

Electronic payments have their roots in the 1870s, when Western Union debuted the electronic fund transfer (EFT) in 1871. Since then, people have been enamored with the idea of sending money to pay for goods and services without necessarily having to be physically present at the point-of-sale.  Technology has been a driving factor in the development of electronic payments. Today, making a purchase is as easy as tapping a button on your smartphone. Work with streamlining payment methods has been hard-won.

From the 1870s until the late 1960s, payments underwent a slow but gradual transformation. In the 1910s, the Federal Reserve of America began using the telegraph to transfer money. In the 1950s, Diner’s Club International established itself as the first independent credit card company, soon followed by American Express. In 1959, American Express introduced the world to the first plastic card for electronic payments.

Entering the 1970s, people became more reliant on computers as part of the buying process. In 1972, the Automated Clearing House (ACH) was developed to batch process large volumes of transactions. NACHA established operating rules for ACH payments just two years later.

The (Wide, Wide) World Wide Web

Then along came the Internet. In the 1960s, ARPANET, a precursor to the modern Web, was built as a military network to improve communication. In the 1990s, online internet banking services were offered to bank customers. Those first online payment systems were anything but user-friendly—users had to have specific encryption knowledge and use data transfer protocols.

Soon, development across the Web, and the eventual invention of Web 2.0, set the stage for online sites to participate in what’s now known as e-commerce. In 1994, Amazon, one of the pioneers of eCommerce, was founded, along with a slew of other websites that we know and love to purchase on.

Payment acceptance and securing payments has been a specific challenge for e-merchants and payment processors. In the early days of electronic payment processing, you needed special equipment and software to send a payment for goods. Now, payment acceptance can be integrated into websites, mobile platforms, and at the point-of-sale for scalability amongst merchants big and small.

Keeping Your Private Data Safe

As technology changes at an increasingly rapid pace, however, keeping your data safe has been at the forefront of most merchant’s minds. It’s easy to see why. Data breaches can have long-reaching financial and systematic impacts for businesses, and can damage the reputation of long-standing organizations. What’s more, breaches can also spell financial ruin for companies without the financial, legal and logistical bandwidth to weather the storms of a hack.

Regulations by both NACHA and PCI standardize how payment data is received, stored, transmitted and processed for each transaction, and help reduce the likelihood of an attack. However it’s important that payment processors who offer PCI compliance programs stay ahead of those who wish to do harm to hardworking business owners by hacking their systems.

For point-of-sale transactions, EMV-enabled (also known as “chip card”) transactions add another level of encryption to your sales when performing card-present sales. End-to-end encryption, like what CSG Forte offers, provides a level of security to your entire payment processing system from terminal to payment acceptance and beyond. When accepting payments online, SSL webpages and other methods of data encryption help ease the worry of consumers and take some of the burden off merchants to remain PCI-compliant.

What’s Next for Electronic Payments?

According to a new McKinsey study, 78% of Americans currently use at least one form of digital payments.  Offering consumers more ways to efficiently pay bills and purchase the things they want should be a key objective for all modern business owners.

Hot-button technologies like cryptocurrency and blockchain could be another way payment processing gets another technological push into a new era. After all, some cryptocurrency contenders aim to revolutionize the processing time for electronic payments, and if successful, can completely change the game for the payments industry. But in the interim, new trends like PIN on Glass acceptance to allow customers to use their PIN for mobile point-of-sale transactions, as well as contactless payments, same-day ACH and advancements in payment APIs all are geared towards making payment processing simpler, faster and more efficient.

For the last century and a half, the world of electronic payments has seen several notable technological shifts. As we speed through the industrial advances that the payment industry currently faces, we will only see a payment processing scheme that is safer, faster and operates how consumers and merchants need.

Forte Places 2nd in The Strawhecker Group’s “Best in Breed” API Set Award

A payments gateway needs to be easy to use, fully functional and intuitive for developers. Today, The Strawhecker Group (TSG), an industry leader in payments consulting and analytics, released their 2021 “Best in Breed” API Assessment, powered by the firm’s Gateway Enterprise Metrics (GEM) platform.

Part of the assessment centered around evaluations of API Sets. In a competitive field Forte placed second out of 20 payments companies in the “Best of Breed” API Set awards. Here’s how the scores were awarded.

 The Assessment

TSG assessed features and functionality without integration and focused on APIs offered, response codes and versioning. TSG conducted the evaluation without assistance from gateway personnel, allowing them to accurately rank a processor’s gateway from three major standpoints—understandability, functionality, and self-sufficiency. The objective of the report was to provide a better understanding of how a gateway’s API affects merchants, developers, and the consumer.

The report was broken down into three areas: APIs, response codes and versioning.

  • APIs—According to the report, Forte provides very informative descriptions of the available APIs. Having added multiple APIs since the last assessment, the setup was presented logically and intuitively.
  • Response Codes—TSG found that Forte’s response codes were easy to locate and that in many cases, the descriptions offered substantial detail on any encountered issue.
  • Versioning—The versioning was found within the web service URL and listed as three versions, with multiple changes within each version.

Forte offers a unified end-to-end payments platform that easily adapts to changing needs and empowers companies to transform their payments operations into a competitive business strategy. By leveraging world-class technology, Forte continues to innovate and endeavor to make payments faster, smarter, and simpler.

5 Payment Trends To Watch For In 2021—And Beyond

If we’ve learned anything in the last year, it’s that human beings have a remarkable capacity to adapt to rapidly changing and challenging circumstances. Some of the changes introduced in the last year will likely go by the wayside (sorry, elbow bump). But other changes, like digital payments, will become part of the post-COVID normal.

While the adoption of digital payments was on the rise before the pandemic, COVID-19 has acted as a major accelerator. Accenture estimates that approximately 420 billion transactions worth $7 trillion are expected to shift to digital by 2023.

Let’s look at some of the payment trends we anticipate in 2021 and beyond.

  1. Old-School Habits Will Turn Into New Payment Preferences

We all have stories about someone we know changing a long-held habit during the pandemic—an uncle using online banking for the first time or a grandparent ordering groceries online. While digital payment options aren’t new, their adoption has surged over the past year—digital wallet adoption jumped from 38 to 55 percent during the pandemic. As consumers get used to the speed and convenience of digital payments, options like digital wallets and contactless payments will become the new normal.

  1. Tokenization Takes Off

Tokenization, or the use of non-decryptable data that acts as a substitute of a sensitive data element, plays a major role in ensuring that payments are secure. It helps reduce risk from data breaches and provides customers with a sense of confidence in the safety of their financial information and property. As more payments are made online, the use of tokenization will become more of a focal point for merchants and processers. The future of tokenization is bright—one forecast believes that the worldwide tokenization industry will reach $4.8 billion by 2025.

  1. No Contact, No Problem

Many individuals, merchants and government agencies used contactless payments for the first time during the pandemic and found them to be efficient and intuitive. In fact, the usage of tap payments in the United States rose by approximately 150 percent in March relative to the prior year. Today, more than half of Americans are using at least one form of contactless payments. Not only are contactless compliant with social distancing guidelines, but they are also secure and flexible. Even as restrictions associated with the pandemic subside, consumers will continue to expect contactless payment options.

  1. More Governments Modernize the Citizen Experience

The pandemic upended workflows for not only the private sector, but for government agencies as well. When the pandemic hit, state and local governments rushed to keep government business progressing and revenue coming in. Governments have accelerated their adoption of new, flexible ways of operating, including accepting online and ACH payments for the first time and supporting bill payment through interactive voice response (IVR). Now that these stop-gap measures have been widely implemented, governments will need to keep moving forward with more digital offerings.

  1. Fraud Prevention Measures Will Be Tested

An unfortunate byproduct of the pandemic has been an increase in fraudulent activity. According to the Association of Certified Fraud Examiners (ACFE), 79 percent of respondents had observed an increase in fraud since the start of the pandemic. As a full economic recovery is expected to take years, we are likely to see an increase in fraudulent payments in the short to medium term. E-commerce businesses are particularly vulnerable to fraud. Payment processors will be tested by bad actors looking for vulnerabilities and will need end-to-end encryption and a secure token data vault to reduce risk.

This past year’s disruption has conditioned us to expect the unexpected. If there is anything positive to be found when looking back at 2020, it’s individuals’ and companies’ ability to adapt amidst adversity. Absent having a crystal ball, it’s impossible to know exactly where the payments industry is headed moving forward. But we can expect that payments will be more flexible, modern and digital.

 

This post originally appeared on csgi.com.

Forte Tied for 2nd in The Strawhecker Group’s GEM API Integration Review

Earlier this year, the Strawhecker Group (TSG), a recognized leader in payments analytics and consulting, released their API Integration Review. The firm’s Gateway Enterprise Metrics (GEM) platform reviewed four areas of API offerings: documentation, developer tools, implementation and certification process. GEM subscribers account for approximately two-thirds of all payment gateway volume in the United States.
Out of 21 reviewed gateways, Forte placed second, with a strong showing in each category. Let’s take a look at some of the key insights and feedback found in the TSG report.

THE RATING PROCESS
Each segment is rated on a 1-4 point scale, with 1 being the best. Forte’s overall average was an impressive 1.5 out of 4.

DOCUMENTATION
Score: 1
TSG believes Forte’s documentation distribution is well-designed, easy to use and presented clearly and logically. Additionally, Forte provides multiple documentation formats, detailed information, programming examples, clear instructions and helpful descriptions. According to the report, “Forte’s documentation appears to be structured with developers in mind and designed to make the integration process simple and painless.”

DEVELOPER TOOLS
Score: 1
TSG found that Forte provides a fully functioning test environment for testing and development. The report gave Forte high marks for offering a full test suite for formatting within the developer tool. In Postman, a popular API client, developers can insert credentials, run test transactions and receive instant feedback.

IMPLEMENTATION
Score: 3
Overall, the TSG test implementation with Forte went smoothly. The complete score was impacted by an issue with duplicate transactions, which the system attempted to reverse too quickly after authorization. However, Forte’s responsive staff was able to quickly work through the issue. TSG found Forte payment experts to be “helpful and friendly.”

CERTIFICATION PROCESS
Score: 1
As Forte does not require a certification process to move to production (Forte already has certifications with several test gateways), TSG awarded the highest possible score. Having the gateway certified saves both time and resources. Nearly half of the other gateways scored a 2 or lower in this category.

GEM is in the business of evaluating the best gateways in the industry. Forte offers intuitive documentation, advanced developer tools, smooth implementation and seamless certification. Forte is proud to receive this recognition and will continue to innovate and improve our payments gateway.

CSG Forte and Nacha: A Partnership to Modernize the ACH Experience

It’s no secret that ACH payment volume is on the rise. Last year alone, there were 24.7 billion ACH transactions, totaling $55 trillion. This year, ACH payment volume grew 7.9 percent in Q2 compared to the same period last year.

Even with those astonishing numbers, there is still room for growth through the modernization of the ACH experience.

How?

Two partners in the payments field, CSG Forte and the National Automated Clearing House Association (NACHA), have some ideas.

CSG Forte, an industry leader in payments management, offers a scalable and seamless all-in-one payment solution for integrated software vendors (ISVs), enterprises, governments and small/mid-size businesses. NACHA facilitates the administration, development and governance of the ACH network, which is the linchpin for the electronic movement of money and data in the United States. As partners, the two organizations are committed to fostering and accelerating innovation in the ACH and larger payments environments.

Recently, Jeff Thorness of CSG Forte and George Throckmorton of NACHA held a webinar to discuss the main ways to modernize ACH, from customer self-service to intelligent representment. You can watch the entire discussion and learn more about the future of ACH here.

CSG Forte and Chargify: A New Partnership in Payments

CSG Forte Payment Systems and Chargify recently announced a strategic partnership that will give their customers access to both CSG Forte’s payment processing solutions and Chargify’s recurring billing and subscription management system. By joining forces, both companies offer an all-in-one payment and billing solution available for approximately 31 million small and mid-sized businesses (SMBs) in the United States.

CSG Forte is an industry leader in offering innovative payment solutions that help more than 500 organizations of all sizes create, manage and perfect the process of accepting and processing payments. From integrating payments into large, complex revenue management implementations suited for Ascendon, CSG’s cloud-based SaaS platform, or smaller, less complex integrations for SMBs, CSG Forte has the expertise and solutions to deliver results, regardless of size and complexity.

Chargify is a well-known provider of subscription-based revenue management for SMBs across the country. Chargify’s key capabilities include offer and subscription management, recurring billing, payment integrations, revenue retention, analytics, insights and more. The company has helped more than 1,200 customers grow their recurring revenue through elastic and events-based billing.

As a result of the partnership, SMBs will have access to CSG Forte’s integrated product suite, which offers full stack APIs and dynamic payment processing services, including ACH, credit card, tokenization, payment gateway and more. Customers will also be able to administer their revenue management and recurring billing needs through Chargify while managing their payments operations with CSG Forte Dex, an innovative transaction management and reporting solution.

Together, CSG Forte and Chargify will enable a seamless experience for payment processing and a transaction solution that reduces stress and maximizes efficiencies for their customers. SMBs now have the ability to seamlessly onboard and create an ecosystem that simplifies automation, enhances data synchronization and maximizes operational efficiencies. The result of this preferred partnership is an increased emphasis on customer experience. Companies now have a payment management system that provides everything they need to process payments across any channel, while streamlining operations and growing recurring revenue.

When two industry leaders come together, good things happen. Through their respective expertise and cutting-edge solutions, CSG Forte and Chargify can help businesses of every size maximize cash flow, reduce business costs and enhance efficiency.

To learn more about how CSG Forte’s innovative payment solutions can help your business, click here.