Unlocking the Secrets to a Great Payment Vendor Partnership: A Discussion Featuring Forrester’s Lily Varon and CSG’s Jeff Kump
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To stay ahead of the competition, businesses must constantly seek partnerships that can propel them to new heights. One of the most important partnerships a company forges is with its payment platform provider. Choosing the right payments vendor sets the foundation for innovation, reliability and strategic prowess.
How do businesses know when they’ve gotten the payments partnership right? Jeff Kump, CSG Forte president, and guest speaker Lily Varon, Principal Analyst at Forrester dug into that question in a recent webinar, “What Good Looks Like: Making Payments Your Competitive Advantage.” They delved into the nuances that elevate a good payment vendor to greatness and offer insights into forging a partnership that stands the test of time.
Lily and Jeff discussed how companies can harness the payments process as a competitive advantage, explored various operational and technical aspects of payments systems. They also explained customer expectations and how to improve the customer experience.
Good vs. Great
A great payments vendor distinguishes itself by creating solutions that are efficient and intuitive, Lily explained. End users are looking for seamless transactions from service platforms that combine technology with user-centric design, creating a system where every feature resonates with the needs of the business as well as the customer.
When a vendor is good, they understand the strategic value of providing insights into payments and they’re making sure their platform is up to speed, Lily said. “Their payment optimization story is more than just the transactional piece,” she added. “But when we think about greatness, I think it is about becoming a strategic partner to their merchants and positioning themselves in that capacity.”
Payment vendors in today’s market can position themselves as visionaries that anticipate market trends and adapt swiftly. Consumers expect the businesses they’re buying from to do the heavy lifting for them, including mitigating fraud risks, without any friction or barriers to payment.
The New Customer Expectation: Forgettable Payments
Jeff gave the example of innovation in the rideshare experience that sets a standard of a “forgettable payment” and a better experience. “I think that does reset the expectation of the consumer of, ‘I don’t need to think about the payment. You have my information, you take care of it, don’t bother me.’”
“I love that ‘forgettable payment,’” Lily responded, “because—it almost feels sacrilegious as a payments nerd to say it—but we call payments the invisible invaluable for that very reason.”
“When a payment goes right, no one cares because it’s just embedded into the experience,” Lily continued. “But when it goes wrong, it’s the end of the world, right? The stakes are high.”
Creating a user-centric payments process can be a strategic advantage for businesses. It highlights the importance of optimizing payment processes to enhance customer experience and drive business growth. Lily explained that customers today expect a “rideshare kind of payment” from every vendor they work with.
“The last best customer experience that your customer has, regardless of where they have it, is the baseline of what their expectations are for their next experience,” Lily said. “So, this seamlessness of a rideshare kind of payment, it is still important for utility companies and insurance companies and public sector companies to recognize that the citizen or the member, the customer that you are serving is experiencing the seamlessness of these transactions elsewhere in their lives, and that is informing their expectations.”
As payment vendors strive to achieve greatness in their solutions, they can leverage emerging technologies such as artificial intelligence (AI) to enhance their offerings. AI can help payment vendors improve the speed, accuracy and security of their transactions, as well as provide valuable insights for their partners. “AI is transforming payments,” Jeff said. “It’s helping us do things better, faster and smarter.”
“Where we see AI, for example, in payments isn’t in the generative AI, customer-generated content. It’s about helping their payment partners be better for their customers,” Lily said. “It’s about navigating insights, navigating the report and using natural language to query data sets to get answers more quickly.”
The Quest for Quality Solutions
Quality is the cornerstone of a great payment vendor’s offerings. One sure way to ensure greatness, Lily said, is to make sure your company excels at the basics before adding the latest bell or whistle.
“Sometimes when people ask me about the future of payments, or what’s hot and new and exciting in payments, the answer sometimes is… a little bit less exciting than they might imagine,” she said. It’s still important and strategic to figure out what payment methods customers want to be using, she added, but “at the end of the day, customers want to achieve their goals. They want better shopping experiences, or better experiences, full stop. Not necessarily better payment experiences.”
The relationship between a business and a great payment vendor is a partnership of equals. It is a collaboration built on mutual respect, shared goals and an unwavering commitment to growth. A great vendor invests time in understanding the unique challenges and aspirations of their partners, crafting bespoke solutions that align with their strategic objectives.
Businesses looking for quality solutions should look for partners that can “help them optimize the [customer buying] experience on that front end, validating before the transaction to help them ensure that transaction is good,” Jeff said. “And then, on the back end, being able to help them if a transaction is declined, with retries.”
When embarking on the journey to find a great payments vendor, companies looking to provide a streamlined experience should consider the following:
Strategic alignment: Seek a vendor whose vision aligns with your business goals and who can provide strategic guidance to navigate the payments ecosystem.
Customer-centric approach: Choose a vendor that prioritizes the customer experience, ensuring that every interaction is a positive reflection of your brand.
Compliant and secure: Ensure that the vendor has a strong track record of compliance, security and platform stability, safeguarding your business and your customers’ data.
Great payment vendors are more than just service providers; they’re catalysts for transformation. By focusing on innovation, quality, and strategic partnership, businesses can unlock the full potential of their payment solutions and thrive in the dynamic world of finance.
How Can ACH Payments Simplify Payments for Property Managers?
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As a property manager, dealing with late rent payments, manual processing and human errors each month can be frustrating and time-consuming. Luckily, digital payment options can ease many of these burdens by providing your business and its tenants with streamlined payment collection solutions that offer enhanced security, traceability and convenience.
Automated clearing house (ACH) payments are becoming an increasingly popular option among property managers and landlords—and for good reason. These systems effectively simplify how your business facilitates taking payments, providing better experiences for your renters. Explore the key advantages of leveraging ACH payments below.
Using ACH for Rent Payments
An ACH payment is a type of electronic funds transfer (EFT) that allows users to send and receive money electronically between bank accounts. ACH is especially useful for property managers and landlords to simplify how they facilitate payments associated with their rental properties.
ACH transactions can optimize property management payment processing for various types of transactions, including the following:
Rent collection
Contractor fees
Security deposits
Utility bills
Homeowners association (HOA) dues
Benefits of ACH Payments for Property Managers
Property managers can deal with a high volume of monthly transactions, and leveraging ACH can help them manage payments more effectively. Explore some of the key advantages of using automated clearing house payments for your business.
Enjoy Cost Savings
As a landlord or property manager, processing paper checks for your tenants can quickly become expensive. ACH payments offer a cost-effective way to collect rent payments and security deposits. Streamlined payment processing means fewer labor costs associated with collecting and correcting renter transactions. Your business also does not have to deal with hidden fees.
Save Time
Another key advantage of using ACH is saving significant time each month. Collecting, processing and depositing rent checks can require hours of manual labor every week. ACH payments automate the fund transfer process, enabling your team to save time and energy you can spend on other essential management tasks.
Boost Cash Flow
By providing renters with convenient recurring payment options, you can enjoy a more predictable income stream and better cash flow management. Automation helps reduce administrative and transaction costs, helping your business improve profits. ACH payments also streamline debt collection efforts, making recovering overdue or returned payments faster and more effective.
Improve Tenant Relationships
Landlords and property managers can improve their relationships and reputation with their tenants by offering ACH payments. These systems provide renters with increased convenience, predictability, flexibility and security, making monthly rent transactions easier than ever. You can support improved satisfaction and a positive rental experience for your tenants.
Simplify Reconciliation
ACH payments also support easier reconciliation processes by providing the following:
Detailed transaction information
Automated recordkeeping
Real-time updates
Fewer human errors
Audit trails
With more accurate and accessible financial reporting through ACH transactions, you can enjoy streamlined property management processes.
Benefits of ACH Payments for Renters
In addition to benefiting landlords and property managers, ACH payments are advantageous for tenants looking to simplify how they pay their monthly rent. The following are some key perks of leveraging ACH transactions for your renters.
Cost-Effectiveness
ACH payments come with few or no processing fees for renters. These payment solutions are typically more cost-effective than other common money transfer methods, such as paper checks. Most financial banking institutions require customers to pay for physical checks, a cost that adds up over time.
ACH costs are also significantly cheaper than processing paper checks, which can be subject to a range of internal and external fees, from network processing to postage expenses.
Convenience
Making ACH payments is very convenient for your tenants. When using ACH, property managers can make it easy for tenants to set up recurring rent payments. Tracking ACH payments is also a huge benefit. Your renters don’t have to worry about a physical check getting lost in the mail or arriving late. They can view their transactions online and ensure you’ve received their money. Offering convenient, automated ACH payment options can increase the likelihood of renters making on-time payments.
Greater Security
Another advantage for renters using ACH payments is enjoying safer money transfers. The ACH system is a government-established solution and must meet strict federal regulations for online payment security.
Nacha, which is the organization that oversees the ACH network, offers additional risk management services to protect these digital transactions and combat fraud.
Flexibility
Today’s renters want flexibility. Making ACH payments allows them to schedule their payments in advance and leverage automatic recurring charges, giving them greater control over their finances and peace of mind. Your tenants will also appreciate being able to pay via the methods most conducive to them and their preferences.
Fewer Errors
Human error can complicate rent payments. Whether they accidentally enter the wrong account number or payment amount as they complete their monthly rent transactions, a minor mistake can lead to late fees and headaches. An ACH payment solution lets them enter and authorize their banking information once, ensuring accuracy. Then, they can rely on automation to facilitate correct, on-time payments.
How to Set up ACH Payments for Rent
The best way to set up ACH payments for renters is to work with a trusted payments provider, like CSG Forte. We have extensive experience in the property management industry, and our platform makes accepting ACH payments from your tenants simple. We understand the importance of receiving rent payments on time to protect your bottom line.
CSG Forte will improve your payment processing and deliver outstanding data privacy and security, so you can feel good knowing your renters’ information is safe. We’ll help you streamline your administrative processes while reducing late payments and fraud.
Contact CSG Forte to See Our ACH Platform in Action
Property managers and landlords can easily capitalize on ACH payment processing with CSG Forte.
Give your tenants an easy, secure way to pay their rent and receive your payments on time every month. Our platform makes tracking funds and managing transfer confirmations simple. It offers access to over 20 banking institutions and enables same-day payment options for remarkable convenience for you and your renters.
Are you interested in learning more about our one-stop shop for payment processing? Contact CSG Forte to get started today.
What’s a Payment Channel?
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Today’s consumers have tons of options when paying for goods and services. From pulling out cash to quickly tapping a phone or credit card near a terminal, payment methods have expanded to include an array of choices, each with its own perks and drawbacks. Offering these different methods of payment—also known as channels—creates benefits for businesses and customers. Before you set them up, you’ll need to know the difference between channels and how to implement them in your organization.
What Is a Payment Channel?
A payment channel is any way a customer might make a payment or anywhere that you, a merchant, might accept a payment. A payment channel includes a payment method, such as a debit card or a bank account, and the technical infrastructure that allows businesses and financial institutions to verify transactions and send funds. The infrastructure might include steps like securely sending card information entered into a website or checking the transaction for potential fraud.
Retail channels are a similar yet distinct concept. Retail channels cover different ways people can shop, like brick-and-mortar stores, catalogs and online shopping sites. Payment channels are generally related to these retail channels but are more specific to how people make payments. They correlate to retail channels but leave some room for overlap.
For example, at a brick-and-mortar retail channel, you might process payments on a physical point-of-sale (POS) system—a cash register—as well as on smartphones or tablets within the store. Your catalog might accept payments by phone but also integrate into an omnichannel approach. Customers could walk into your brick-and-mortar store to pay at the POS, or they could shop the catalog online and pay via online checkout.
Payment and retail channels closely relate to each other. Since you definitely want to create a cohesive, omnichannel experience, it’s essential to consider what payment channels you might implement. Some of the most popular options include:
Physical POS Systems
Most brick-and-mortar stores have a POS of some kind. These systems allow businesses to take in-person payments such as credit and debit cards, cash and checks. A physical POS can use more traditional technologies as a standalone system, but mobile POS systems are also common. A mobile POS uses devices such as smartphones and tablets to process payments, often with attached card readers. This option works well for businesses looking for easy-to-implement tech or for those on the move, such as field service providers.
Phone and Interactive Voice Response (IVR) Payments
Payments made over the phone can come in one of two varieties. The traditional approach involves talking to an agent to communicate payment details and share card information. An alternative to these contact center payments is to use IVR to walk customers through the process without needing to talk to an agent. The customer can enter specific numbers or say certain words to make the payment. Both methods are popular with service businesses and recurring payments.
Online Checkout Solutions
Online checkouts can come in many forms for everything from e-commerce and subscription services to rent and utility bills. They might integrate features for managing shopping carts, storing the customer’s information for next time or setting up automatic payments. Supported payment methods might include credit and debit cards and Automated Clearing House (ACH) transactions. ACH is the system used to electronically transfer funds between bank accounts and process electronic checks in the United States.
Contactless Payments
Many cards now have integrated chips with near-field communication (NFC) technology. A compatible POS system allows customers to tap their credit or debit card to make payments. Digital wallets like PayPal and Apple Pay can also use NFC technology to facilitate card payments and bank transfers. You’ll find these wallets integrated with online checkouts and supported by physical POS systems, which can collect payment data wirelessly from a user’s smartphone or watch.
The Benefits of Multiple Payment Channels
In a competitive landscape, offering convenience and choice can make a big difference in where your customers shop. Credit cards and debit cards are by far the most popular payment methods at the point of sale, but analysts expect digital wallets to become much more common. However, payment preferences can vary widely by industry, geography, customer demographics and other characteristics.
By offering a range of options, businesses and their customers can reap several benefits, including:
A Better Customer Experience
With more choices, customers can make payments how they want. These methods often come with unique advantages. Cash doesn’t have any processing requirements or fees, while credit cards can offer rewards and fraud protection. Online or over-the-phone payments are convenient and fast.
With multiple options, customers can pick the right one for their situation. From a business perspective, a better customer experience from payment channels can make it more likely someone will make a purchase with you or reduce the liklihood that their payment will be late.
More Sales Opportunities
Different payment channels can create new sales opportunities. Taking online payments can help a local shop reach customers worldwide, while a POS could help a storefront business take payments from customers who don’t typically carry cash.
Flexible payment options can also help customers make payments on time, allowing businesses to maintain steady cash flow.
Additional Features
Some payment channels support useful features. For example, online checkout systems can help customers set up automatic recurring payments, which you can’t do with cash payments. Online checkouts also offer branding opportunities. You could even create email or SMS text message payment channels by including a link to an online payment platform in emails and SMS text notifications.
Payment Channel Security and Compliance Considerations
Protecting customer information and meeting regulations is crucial for any organization collecting payments. Most payment channels use different technological infrastructures, so you’ll need to pay attention to security and compliance requirements. Make sure your solutions follow best practices for technology standards and protocols, like end-to-end encryption, tokenization and fraud prevention methods.
Depending on your industry and the payment channels you use, look for solutions that meet the Payment Card Industry (PCI) Data Security Standard (DSS) and the Health Insurance Portability and Accountability Act (HIPAA). Working with a member of the Nacha Preferred Partner Program can help ensure security with ACH transactions, too.
How to Set up Multiple Payment Channels
Setting up multiple payment channels might sound complex, but a merchant service provider and a unified payment platform simplify the process. Here at CSG Forte, we use the Dex Payments Platform, a comprehensive solution for payment processing. Dex integrates with various online, in-person and phone payment systems for simplified management and various tools to meet customer needs.
Your team can integrate this highly customizable platform with application programming interfaces (APIs), or you can work with our experienced team to implement channels for your business. We can also help with hardware requirements.
CSG Forte offers full payment processing support for the following channels:
Physical POS: We can help build a physical POS solution and supply the tech, including card readers and our Virtual Terminal that turns existing computers into instant workstations. Our POS systems are PCI-validated with point-to-point encryption for extensive security.
Phone/IVR: Our phone and IVR services come with your own toll-free number and script-building assistance. Touch-tone and speech-recognition technology can help you build a great customer experience. We also have solutions to streamline and secure payments received through your contact center.
Online payments: Our robust online checkout solution is smart, speedy and stocked with options. Accept credit and debit cards and ACH payments, and allow customers to pay through your app or other platforms through robust APIs.
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. For example, government agencies could implement online payments to accept taxes on the web and leverage a POS system for in-office payment collection.
Payment Channel Solutions for Your Business
Whatever your industry, diverse payment channels can transform your approach. Expand options for your customers and your business with simplified payment processing. 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.
Secure, Swift, Seamless: Why Your Customers Love Digital Wallets
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Consumers want fast, convenient ways to pay for their purchase—without digging through their wallet for their card payment details. Shoppers increasingly say they choose where to shop based on how convenient the online payments process is. One way to enhance your customer experience (CX) and streamline the online transaction process is by offering your customers digital wallets as a payment option.
Digital wallets are gaining popularity—with an expected 5.3 billion users by 2026. They’re becoming increasingly important not just for the benefits they provide customers; businesses that take advantage of this evolving technology soon will be ahead of the game—digital wallet adoption still lags among some types of merchants, despite continued increase in consumer usage.
It’s those ongoing advancements in digital wallets that are exactly why collaborating with a knowledgeable payments provider is essential for organizations that want to attract and keep customers in a dynamic online payment environment.
The Rise of Digital Wallets
Digital wallets are becoming mainstream. They’ve transcended novelty status and become an integral part of everyday life. Consider this: 79% of Gen Z consumers use digital wallets at least once a month. They’re also growing in popularity with Millennials and Gen Xers, half of whom reported using digital wallets more often than traditional payment methods in a recent Forbes survey.
So, we know digital wallets are increasingly popular. But, why?
Customers Expect Fast, Secure, Streamlined Service
Customers crave simplicity. They want transactions to be swift and secure, and they don’t want to take any unnecessary steps. Digital wallets fulfill these expectations by offering:
Fast Processing: With a few simple steps, payments are completed in seconds.
Security: Digital wallets employ robust encryption and authentication methods, providing peace of mind for users.
Reduced Redundancy: Say goodbye to repeatedly entering card details—digital wallets store payment information securely.
Why Offer Digital Wallets?
Meet Customer Expectations
Customers expect to see familiar payment options when they visit your website. Digital wallets have become a standard feature for most consumers, akin to credit cards and bank transfers. By offering a digital wallet option, you signal that your company is attuned to consumer preferences and up to date on the latest technology.
Increase Trust and Security
Trust is the bedrock of any successful business relationship. Customers recognize digital wallets as secure payment methods. Whether it’s PayPal, Venmo, Apple Pay or Google Pay, these platforms have earned their reputation for safeguarding sensitive data. By integrating them into your payment ecosystem, you reinforce trust with your audience.
Streamline the Checkout Process
Offer a frictionless checkout experience: no fumbling for credit cards, no manual data entry. Digital wallets eliminate these pain points. Customers appreciate simplicity—they can complete purchases swiftly, especially on mobile devices. This simplicity also helps your company’s bottom line; consumers who use digital wallets spend 31% more than non-users, according to recent survey data.
Choosing the Right Payment Methods
Quality Over Quantity
While variety is enticing, overwhelming customers with too many payment options can backfire. Instead, focus on quality. Prioritize widely used digital wallets that resonate with your audience. Remember, simplicity is best.
Understanding Customer Preferences
Knowledge is power. By analyzing transaction data, you can discern which payment methods your customers prefer. Do they browse from Apple devices? Then consider offering Apple Pay. Are they connecting using Google Chrome? Google Pay may help you speed up transactions. Armed with this type of insight, you can tailor your offerings and enhance the user experience.
Collaborating with Payment Providers
Now, let’s address the elephant in the room: managing separate accounts with various digital wallet providers. It’s time-consuming and inefficient. Here’s where a payment provider comes to the rescue:
Centralized integration: Partnering with a payment provider allows you to consolidate digital wallet options. Instead of juggling multiple accounts, you have a unified interface.
Seamless updates: When a new digital wallet emerges or an existing one evolves, your payment provider handles the integration and is there to guide you through the process.
Efficiency: Focus on your core business while the payment provider manages the technical intricacies.
Remember, the goal is to enhance your customers’ experience. By offering digital wallets and collaborating with a reliable payment provider, you’re not just streamlining payments—you’re building trust and loyalty.
The future of wallets is digital, and now is the time to claim your spot—ahead of the competition. Incorporating digital wallets isn’t a trend, it’s a necessity to stay relevant and keep customers coming back. Your customers demand speed and convenience; meet their needs by adopting digital wallet technology today. Contact our experts at CSG today.
Think Outside the Square: How QR Codes reshape payments
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From telemedicine to bread baking, there’s a list of things that enjoyed a surge in adoption during the pandemic. For businesses, that includes the use of contactless payments and QR codes—which turned out to be no passing trend.
Previously, QR codes were used mainly for marketing purposes. Now they have found mainstream adoption beyond the pandemic as a tool to facilitate contactless payments. With convenience being a top priority among consumers, QR codes have proven to be a seamless and secure payment method for both businesses and customers alike.
We’ll delve into the benefits of incorporating QR codes into your multichannel payment processes and offer examples on how to effectively implement them, enhancing the payment experience for your customers.
WHAT ARE QR CODES?
QR (short for “quick response”) codes are two-dimensional barcodes that store information in a readable pattern. Traditional barcodes can only hold limited data like product numbers. QR codes, with their added dimension, can store various types of information including URLs, contact information and payment details (e.g., an invoice).
QR codes encode data into a grid of black squares on a white background, which can then be scanned by a smartphone or QR code reader. The scanning device then instantly accesses the encoded information, letting users quickly access websites, make payments or retrieve other information automatically.
You can think of QR codes as a bridge between physical and digital commerce. They offer a quick way to interact with content and perform tasks using a smartphone camera.
TYPES OF QR CODES
The QR codes that businesses use can be split into two types: static and dynamic. Each type differs in content and function.
STATIC QR CODES
These QR codes contain fixed data—the data can’t be changed once the code is generated. You often see these used to contain simple, unchanging information like website URLs, business card details or product information.
DYNAMIC QR CODES
Dynamic QR codes can be modified after creation. They’re often used in conjunction with a web service or platform that lets a user update the content linked to the code. This means the QR code can be personalized to specific users—linking to different URLs or displaying different text. This is why dynamic QR codes are often used in situations that require real-time updating, like marketing campaigns, inventory management and—as concerns us here—payments.
HOW QR CODES WORK IN PAYMENTS
Here, we’ll focus on one of those tasks that QR codes facilitate—initiating transactions—which merchants can use to offer contactless payment at a store or settle an invoice remotely.
Take retail transactions, for example. Merchants can generate QR codes to represent a specific payment amount. At the point of sale, a customer can simply scan a displayed QR code using their smartphone. This usually directs them to a secure payment portal where they can confirm the transaction and choose their preferred payment method—credit/debit card, mobile wallet, bank transfer, etc. The process makes it easy for customers to pay on the go, and merchants don’t need to have a cash register or payment terminal to accept payment.
Beyond retail transactions, QR codes can also facilitate invoicing with reduced friction. Businesses can generate a QR code for each invoice, embedding payment details such as the invoice number and amount due. When recipients receive the invoice, they can simply scan the QR code to access the payment portal, where they can review the details and complete the transaction with a few taps on their device. This streamlines the payment process by eliminating manual entry of payment information and reduces the risk of errors.
Essentially, QR codes are digital keys that unlock seamless payment journeys, whether they involve in-store purchases, ecommerce or invoice payments. They’re versatile and easy to use, making them an appealing tool for businesses looking to simplify their payment processes and improve the payment experience.
EXAMPLES OF QR CODE USE CASES FOR PAYMENTS
As mentioned, QR codes are versatile, and they help customers make quick, secure payments in a variety of ways. Here are just a few examples.
STREAMLINING PAYMENT VIA MONTHLY BILLING STATEMENTS
If your company sends out monthly billing statements, chances are you encourage customers to make payment online or through your app. You can take them straight to a payment portal by printing a QR code on the bill encoded with that URL. This saves the customer time in having to navigate to that portal through several clicks or even having to enter the URL. Not only that, but you can also encode the QR code to include the account number and amount due, which pre-fills the payment information for a faster checkout. It’s a great way to combine a traditional communication channel—the paper statement—with an easy digital payment experience.
ACCEPTING IN-PERSON PAYMENT MORE EASILY
Imagine you’re a field technician installing a new internet router in a customer’s home. As you’re setting it up, the customer shows interest in upgrading to a better router on the spot. With a few taps on your tablet, you quickly generate a personalized invoice reflecting the upgrade cost. Instead of fumbling with cash or card readers, you simply present the QR code on your device screen. The customer scans the code with their smartphone, and just like that, the payment is processed. You install the upgrade then and there, leaving the customer satisfied with faster internet connection. The best part is the QR code ensured payment right away—you didn’t have to invoice them and wait for the payment via the monthly bill.
REPLACING PAPER INVOICES
Suppose you’re a home repair service worker who has just completed a job for a customer. Instead of the traditional route of handing over a paper invoice and waiting for a check, you offer a more secure and efficient payment option: a QR code. The customer scans the code with their smartphone, securely processing the payment electronically. This not only saves time and reduces the risk of errors associated with manual payments, but it also provides a better payment experience by using a modern payment solution.
ADD QR CODES TO YOUR PAYMENT CHANNELS
Incorporating QR codes as a payment channel offers businesses a practical and efficient way to interact with customers. With CSG Forte Engage, our intuitive payments solution, organizations can seamlessly integrate QR codes into their operations, providing customers with personalized and secure invoices for hassle-free transactions. By leveraging QR codes, businesses can streamline their payment processes and enhance customer satisfaction with a secure and convenient digital payment channel.
Take the next step in offering this convenient, secure method and contact us today.
Frequently Asked Questions About Payment Processing
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The digital payments market is projected to reach $16.62 trillion by 2028. All businesses should be familiar with the basics of payment processing to remain agile in a competitive industry and ever-expanding landscape. We’ve answered some frequently asked questions (FAQ) about payments and their processing to help you get started.
Payment Methods
Understanding the terms and systems that go into payment processing gives you the edge to offer your customers frictionless, secure and simple ways to pay. Here are answers to some common questions about payment methods.
1. What Goes Into a Transaction Flow?
The transaction flow consists of various participants and components, including:
Customer: The customer is the individual or organization paying for services or products.
Merchant: The merchant is the service provider or business receiving payment from the customer.
Payment method: The payment method is how the customer pays—via check, credit or debit card, cryptocurrency, or electronic wallet.
POS system: The point-of-sale (POS) system is a digital platform or physical device used for the transaction. The POS system can be on an e-commerce website, app or terminal point at a store.
Payment gateway: The payment gateway safely captures and sends information from the POS system to the acquiring bank or payment processor. This gateway encrypts and secures the data during the transaction.
Payment processors: The payment processor is a third-party company managing the technicalities of the transaction. These technicalities include validating information, receiving authorization, and facilitating communication between the acquirer and issuer.
Acquirer: The acquiring bank, or the acquirer, is the financial institution where the merchant’s account is. The acquirer receives payments on behalf of the merchant, processes transactions for the merchant and settles the funds in the account.
Issuer: The issuer or issuing bank is the financial institution that authorizes or declines the transaction on behalf of the customer. Issuers consider customer account status, the validity of the transaction and available funds.
Card network: The card network includes organizations like Mastercard, Visa and American Express. These organizations provide the infrastructure, rules and standards for processing transactions.
ACH network: The Automated Clearing House (ACH) network is used to move money between bank accounts in the United States electronically. Nacha, previously called the National Automated Clearinghouse Association, runs the ACH network and ensures the payment system is safe and efficient. Transaction types include business-to-business, consumer and government transactions.
Payment security: Payment security consists of a range of technologies and standards to ensure transactions are secure from breaches and unauthorized access. Security involves encryption, tokenization and compliance with the regulations set by the Payment Card Industry Data Security Standard (PCI DSS) Council or the ACH network for bank-based payments.
Settlement: Settlement and reconciliation are the processes of transferring funds from the issuer to the acquirer and updating the transaction records to reflect the funds transferred.
2. What Is Payment Authorization?
Payment authorization is when the issuer verifies that the customer has the available funds and confirms that money can be released from the customer’s account. The issuing bank conducts thorough checks before authorizing transactions.
3. What Are Payment Settlement and Operations?
Payment settlement starts with customer payment initiation and ends once the funds are deducted from the customer’s account and paid to the merchant.
During settlement, the issuing bank verifies the transaction details and authorizes money to be debited from the customer’s account and credited to the merchant’s account. This settlement communication operates through the payment network.
4. What Are the Needs and Considerations of E-Check and Credit Card Payments?
E-checks and credit card payments have a few key differences:
E-check payments: The Automated Clearing House (ACH) merchant network processes e-check payments between participating financial institutions. E-checks are categorized as electronic funds transfers (EFTs). They work like ACH transfers with routing and account numbers, facilitating funds transfer between accounts. Electronic checks can save your business on payment processing costs—they’re typically more affordable than card transactions.
Credit card payments: Card authorization occurs when the merchant accepts a card payment and the payment processor reaches the card issuer. The issuing bank ensures the credit card is valid, verifies the transaction amount and available funds, and does security checks. The issuer will deliver a two-digit code approving or declining the transaction. Credit card transactions are convenient for customers, especially those who prefer to have a range of payment options.
5. What Are the Top Digital Wallets and How Do They Work?
The top digital wallets in North America include:
Apple Pay
Google Pay
PayPal
Venmo
Digital payment wallets use software that links your payment details from your bank account to the vendor you’re paying. Some apps offer open wallets that allow contactless online and in-store payments.
Electronic wallets make payments easy for customers—there’s no need to keep card details on hand to pay, and the information is stored in one central, protected location.
6. What Does Accepting On-Site Payments With Devices and POS Entail?
If you want to accept on-site payment with POS systems and devices, you need the associated hardware and software. You’ll also need a payment solutions provider.
The necessary hardware includes a card acceptance machine, like a POS terminal. The hardware connects to software that processes transactions via the provider’s solution. POS terminals can accept several types of payments, including contactless payments, credit and debit cards. Customers can tap, swipe and insert cards depending on their preferences.
Processing Models
Processing models allow transactions to happen between the issuer and the acquirer. Here are the related questions answered.
1. What Is a Payment Gateway?
A payment gateway links all entities involved in a transaction and helps systems communicate with each other. Payment gateways establish secure connections to transmit data and process the transfer of funds from the customer’s account to the merchant’s to complete payment.
2. What Is an Enhanced Payment Gateway?
An enhanced payment gateway is a robust version of a standard payment gateway. This solution goes beyond processing payments, leveraging advanced fraud detection capabilities. Enhanced payment gateways may also feature subscription billing and customizable checkout options.
3. What Is an Acquired Payment Gateway?
An acquired payment gateway is a payment processing solution offered by a payment service provider. This solution lets you securely receive customer payments using online wallets, debit cards and credit cards. The gateway handles authorization, transaction processes and the transfer of secure funds into your account.
4. What Is a Payment Facilitator?
A payment facilitator (PayFac) simplifies the setup of payment processing for your business, allowing you to accept in-person and online payments. The PayFac has a master merchant account. Your business becomes a sub-merchant under the PayFac, eliminating the lengthy underwriting process. The PayFac enters a contract with the acquiring bank and manages the approval process on your behalf.
5. What Does It Mean to Be a Third-Party Sender?
A third-party sender (TPS) facilitates ACH transactions by having funds flow through its account. Third-party senders act as intermediaries, making payments on behalf of customers. This approach provides little protection in terms of risk management and adherence to safety standards. A TPS typically comes with higher transaction fees because of the higher involvement in the flow of funds.
6. What Is the Difference Between a Third-Party Sender and a Third-Party Service Provider?
A third-party sender directly receives and transmits funds through its bank account on behalf of a company. A third-party service provider does not hold funds and transfers funds to ACH network users.
When third-party senders pay on behalf of a client, the risk involved tends to raise the price. A TPS solution can also cause customer onboarding friction.
Leveraging a third-party service provider (TPSP) offers greater security, as these entities strictly adhere to regulations and don’t automatically move money. You’ll also benefit from faster processing times, better customer onboarding, flexible transaction limits and lower transaction fees.
Pricing
Payment processing pricing is also an essential consideration for your business.
1. What Is an Interchange Fee?
Interchange fees make up the majority of payment processing fees. You pay interchange fees to financial institutions that manage the customer’s card payments. These are standard charges that come with the convenience of using a specific payment method.
2. What Is Pass-Through Pricing?
Pass-through pricing includes interchange, assessment and payment processor fees. These fees are typically itemized or combined monthly on a statement for a merchant to pay. Pricing structures differ, so it’s important that your business partners with a competitively priced payment solutions provider.
3. What Is a Flat- or Fixed-Rate Model?
A flat- or fixed-rate model charges your business the same processing fee percentage regardless of the card used. The flat-rate percentage is typically based on the cards with the highest interchange rates.
4. What Is a Convenience Fee?
A convenience fee is an additional credit card or online payment charge. It’s sometimes charged by a payment processor when a customer does not pay by cash, check or ACH. It can be applied as a split charge or split fund.
5. What Is a Split Charge?
With a split charge, the payer sees two entries on their statement—one for principal and another for convenience.
6. What Is a Split Fund?
Merchants can set up predefined splits to go to different bank accounts. Split funds come in handy when your business charges convenience fees that need to go to a separate account from the transaction amount. Debit and credit funding bank accounts are usually set up this way for merchants.
CSG Forte offers split funds and handles the setup to ensure hassle-free allocation.
Integrations
Integrated payments connect your POS system to a payment processor, offering streamlined transactions.
How Does Integration Impact the Payment Experience?
Integrated solutions enable you to offer a better payment experience. Customers can pay using various methods without the need for different payment terminals or manual processes, making transactions frictionless.
Payment tokenization is a security measure that uses unique tokens instead of transmitting sensitive payment data during transactions. These tokens protect information like banking details, primary account numbers (PANs) and credit card numbers.
2. What Is the Payment Card Industry Data Security Standard?
PCI DSS is a set of standards requiring all businesses that handle credit card or payment information to maintain a secure environment. These compliance standards apply to all organizations, no matter the size of your business or the amount of transactions it handles.
3. What Are the Top Considerations for Nacha Compliance?
Secure payment transmission and storage of sensitive information.
Store hard copies of documents with customer information safely.
Validate customer routing numbers.
Guard against possible fraud.
Verify customer identities.
Outline and enforce an official security policy.
4. What Is End-to-End Encryption?
End-to-end encryption (E2EE) is a way to safeguard your customers’ data during transactions. This encryption prevents data breaches and unauthorized access to sensitive information like credit card or bank account details. Sensitive information is encrypted and securely transmitted from one point to the next, allowing your customers to pay you safely.
The payment gateway performs the encryption when the customer initiates the payment, and it decrypts the information when it reaches the acquirer.
5. What Is Point-to-Point Encryption?
Point-to-point encryption (P2PE) is an encryption method established by the PCI DSS Council. It offers excellent protection, using an algorithm to encrypt card information when the customer initiates payment. The unreadable code is transmitted to the payment processor with a decryption key. The decryption happens virtually, so your business never comes in contact with customer payment information.
While P2PE and E2EE are similar, the PCI DSS Council only accepts point-to-point encryption.
Ready to Streamline Your Payment Solutions?
CSG Forte will help you scale your business rapidly and make payments frictionless for you and your customers. Each year, we help process over $84 billion of payment transactions.
The Automated Clearing House (ACH) is a network that clears funds moving from one bank account to another. When a payer transfers money via debit, credit card or EFT, the funds await authorization. Once clear, the ACH system moves the funds into the payee’s account.
The National Automated Clearinghouse Association (Nacha) oversees this network in the United States. Nacha employs rigorous security measures to guard users’ accounts. Outside its security nexus, bad actors who gain access to pertinent information can commit ACH fraud. This type of fraud is relatively common—a criminal only needs access to a few details to open the door to several opportunities for theft. Preventing access at the start is better than remedying a security breach.
What Is ACH Fraud?
ACH fraud occurs when criminals use account and routing numbers to impersonate victims and manipulate the movement of funds. Criminals can obtain routing numbers at the bottom of their targets’ checks. They might use this information to impersonate someone and steal funds through various methods:
Internal fraud: When an employee of a company uses legitimate credentials to make unauthorized ACH withdrawals and payments, the fraud is considered internal.
ACH kiting: Kiting occurs when fraudsters move funds from one company account or financial institution to another.
Fraudulent authorized push payments (APPs): When a customer attempts to pay you, criminals trick them into making ACH transactions prompted by scams, and the funds never reach your account.
Unauthorized access to personal accounts: ACH transactions render you and your clients vulnerable to unauthorized persons having access to sensitive accounts.
Unauthorized ACH withdrawals: Merchants and clients risk having funds withdrawn from bank accounts without authorization.
Within the ACH network, there are several steps between a payer sending funds to an account and the payee receiving the funds. This process is not impenetrable to criminals, who are using more sophisticated means of defrauding unsuspecting users. Traditional ACH systems lack proper security mechanisms, leaving you and your end users vulnerable.
ACH Fraud and Concerns
Concern is mounting over the rate at which ACH fraud is increasing, highlighting the need for more vigorous security methods. Criminals only need two data sets to successfully steal money through the ACH network—a bank account number and a bank routing number. Businesses and enterprises accepting payments need to address increasing ACH fraud to protect themselves and end users.
ACH fraud can occur from external means or inside a company. Employees don’t need to know complicated data sets or complex codes to hack a business or another person. Staff are also at risk of social engineering and phishing attacks.
How ACH Fraud Can Effect Your Business
A U.S. District Court recently found a credit union liable for not acting on several suspicious ACH transactions. If you’re a business accepting payments or overseeing financial transactions, it’s critical to be proactive in preventing ACH fraud. Nacha and the Federal Reserve Regulation E have policies that state the consumer is not responsible for ACH fraud unless they fail to report an incident within 60 days.
Financial institutions can be held liable, with the bank returning the funds to the consumer and claiming them back from the original enterprise. Successful fraud protection can keep your end users safe and protect you from the costs of fraudulent ACH activity.
CSG Forte’s Approach to ACH Fraud Prevention
CSG Forte has extensive experience in ACH fraud prevention and detection, and our robust payment platform provides reliable, secure solutions. For your convenience and safety, we adapt to the evolving digital economy to provide a unified payment solution with built-in fraud-prevention protocols using the latest technology.
Furthering your peace of mind that your funds are handled safely, we’ve partnered with Nacha, the body overseeing all ACH transactions. You’ll also benefit from:
Advanced security protocols: Your data stays protected with our advanced security solutions, such as Forte.js and compliance with major card brands.
Real-time alerts: You can remain in control of your funds by monitoring transactions in real time and receiving alerts for every activity connected to your funds.
Comprehensive evaluation: We thoroughly evaluate merchant accounts to prevent delays down the line and help you accept payments seamlessly. Evaluation helps ensure your payment system will have adequate ACH fraud protection, mitigating loss in the long run.
We bring you reliable, safe payment processing solutions. Our approach to fraud prevention is comprehensive, as we’ve partnered with several leading software providers to prevent money laundering and several types of sophisticated financial crimes.
Key Features of Our ACH Fraud Prevention
To secure every payment and keep your data safe, CSG Forte develops every software platform and application tool with security as the cornerstone. The key features of our ACH fraud prevention include:
Software to detect behavioral anomalies: You can have peace of mind knowing our behavioral analytics software detects discrepancies from your usual activity and alerts you in case of an anomaly.
End-to-end encryption: We use end-to-end encryption technology to safeguard all data and prevent your information from leaking to a third party.
Tokenization: We limit the exposure of your sensitive information through tokenization, ensuring your data remains hidden in the system throughout the payment process.
We are committed to providing you with rigorous, up-to-date security systems for your enterprise, as evidenced by our compliance with several security programs. You can rest assured your funds are protected during every transaction.
Protect Against ACH Fraud With CSG Forte
ACH is a vital payment method to offer your customers. However, its attainability makes it vulnerable to breaches. Protecting your funds and your customers takes a proactive stance. Take action by integrating an advanced, robust platform from CSG Forte.
What Are Electronic Payments and How Can They Help Your Business?
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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 mean 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.
What Are Electronic Payment Systems?
Electronic payments are any payment completed through an electronic medium. These methods include credit and debit cards, ACH payments and virtual cards. These electronic methods replace physical checks or cash, and they can occur at the point of sale or online. For example, consumers can use their virtual rewards card to pay for their coffee at the drive-through.
The Benefits of E-Payments
With e-payments, users can enjoy:
Payment ease: Many forms of e-payment allow users to pay with as little as a tap. With an easier payment process, you improve the user experience for payers and payees.
Reduced processing costs: Processing checks involves printing, signing and mailing, requiring manual labor and material expenses. Electronic payments eliminate these processes, saving you money on payment processing.
Greater visibility: With electronic payments, you can track transaction status, access financial metrics and follow audit trails for compliance needs. These tracking capabilities are often integrated into e-payment platforms, so following the status of your financials is much easier than when manually processing physical payments.
Improved security: Handling cash or checks can easily lead to theft or fraud. With electronic payments, you eliminate passing physical money between hands, and you can enjoy built-in encryption that protects user data during transactions.
Types of Electronic Payments Systems and Their Advantages
There are various types of e-payments, and they all offer unique advantages.
ACH Debit Pull
The Automated Clearing House (ACH) processes electronic transactions between bank accounts. In the case of an ACH debit pull, a payee initiates a pull of funds from a payer’s account. One of the most common examples of a debit pull is direct deposit for employees.
These debit pulls are typically low-cost, and sometimes they’re completely free. The most significant advantage of this electronic payment is it eliminates the need to collect and process checks or deposit cash.
ACH Credit Push
An ACH credit push is the opposite of a debit pull. Rather than the payee pulling the funds from the payer’s account, the payer pushes the amount out of their account and to the payee. Credit pushes are common for a range of online payments where the vendor is an established company. ACH payments often come with lower processing fees than credit cards, making them a practical option for some businesses.
Credit Cards
With a credit card, a user borrows money from their card issuer up to a certain predetermined limit. The cardholder is then responsible for paying this borrowed money back and can be charged interest for outstanding balances.
In the case of e-payments, credit cards are fast and accessible. This secure payment method is easy to use at the point of sale. With the growing use of chip payments with credit cards, every transaction has a unique code that makes it challenging to steal sensitive information.
Mobile Pay
Mobile pay relies on a mobile device, such as a smartphone, smartwatch or tablet, to complete a transaction. Many of these devices are compatible with mobile wallets that allow users to upload their card information for use at point-of-sale terminals. These terminals must have near-field communication (NFC) to receive payment information from the mobile device and accept payment.
Mobile payments can also include mobile payment platforms that use ACH payments to complete transactions. This payment type offers convenience since most people carry some kind of mobile device. Additionally, these mobile payment methods typically require authentication before completing a transaction, making them a secure electronic payment option.
The History of Electronic Payment Systems
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 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 have been specific challenges 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 merchants’ minds. It’s easy to see why. Data breaches can have long-reaching financial and systematic impacts on 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 Payment Systems?
According to a McKinsey study from 2020, 78% of Americans currently use at least one form of digital payment. 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.
The Benefits of E-Payments for Your Business
Your business can benefit from e-payments with the help of:
Improved supplier relationships: When your vendors can enjoy the ease of e-payments, they know that you value their time, security and ease of payment processing. These e-payments also include remittance data for ease of reconciliation. Many modern suppliers may come to expect e-payment options and may even turn down relationships without this convenience factor.
Increased customer satisfaction: Your customers will enjoy the convenience and security of e-payments as much as your vendors. When paying for products or services is easy, consumers are more likely to follow through with a purchase.
Reduced costs: Processing cash and checks can require hours of physical labor and expenses dedicated to stamps and mailing. Enjoy the reduced administrative overhead of e-payments.
Enhanced security: With encryption and unique transaction codes, e-payments are far more secure than physical cash or checks. Plus, electronic payments eliminate the risk of losing cash or checks before they get deposited.
Greater flexibility: If you offer various types of e-payments, consumers can pay in a way that works for them. For example, a buyer who forgot their wallet can use their mobile wallet to cover costs. This flexibility encourages more sales.
How Can CSG Forte Help Optimize Your Electronic Payment Systems
CSG Forte offers a comprehensive electronic payment solution that supports online, in-person and phone payments. Our payments platform supports secure, flexible payments with reliable reporting and a user-friendly interface. With recurring payment capabilities, intuitive bill presentation, point-of-sale support and trusted security practices, CSG Forte supports the success of modern businesses.
Million Dollar Payments: Nacha Boosting Same-Day ACH Maximum
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Think of your favorite news outlet, any news outlet. Chances are, if you visit their site right now, the leading topic will be the economy. From inflation to new job numbers, several metrics and topics are commonly discussed when analyzing the economy. However, the Automated Clearing House (ACH) network often goes overlooked in economic discussions. And it definitely shouldn’t—with over 7.5 billion payments valued at $18.9 trillion in the fourth quarter of 2021 alone.
With payment volumes and values continuing to grow, new rules are needed to foster the growth of the ACH network. The National Automated Clearing House Association (Nacha), an organization that governs and facilitates the ACH Network, develops standards and rules to ensure the ACH Network operates smoothly, and that payment information transfers securely and quickly.
In response to substantial increases in ACH payments, Nacha announced a rule that will increase the same-day ACH spending limit. Beginning March 18, 2022, businesses will be able to transfer same-day credit and debit payments up to $1 million, up from the current $100,000 cap.
And with more verticals likely to adopt this because of the increasing amount of payments they can accept, there’s never been a better time to start offering this payment option. Get paid faster, lower payment processing costs and easily manage recurring payments.
Choose CSG Forte for Same-Day ACH Payments
CSG Forte is the leading payments provider of same-day ACH, supporting over 73,000 merchants. With a best-in-class solution and decades of experience, we deliver a scalable and seamless solution to companies operating in a wide variety of verticals, including integrated software vendors (ISVs), healthcare, property management, government, insurance, enterprises and utility organizations.
Our payments platform can turn what was once an operational expense into a revenue generator through our revenue optimization solutions. Our platform optimizes ACH payments by validating payments in real-time, automatically re-presenting failed payments and keeping recurring payments on track.
Want to learn how you can optimize your ACH payments and take advantage of the rule change? Click here to learn more.
5 Payment Trends to Watch in 2022
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Human beings have an innate need to make predictions. For whatever reason, we like to make forecasts on just about everything, from Oscar winners to World Series champions, from election results to the likelihood of weather events, and everything in between.
The most effective prognosticators tend to take a 360-degree view. That is, they try to eliminate blind spots and take multiple factors into account. The recent past can give us a good idea of where things are heading moving forward.
In the payments world, the COVID-19 pandemic sent shockwaves throughout the industry that continue to reverberate. Today, we are seeing innovative breakthroughs in new digital payments technology, with rapid adoption across a wide range of industries. On the flip side, there are more opportunities for hackers and bad actors to try and take advantage.
Where is the payments industry headed? While I don’t claim to be Nostradamus, there are a few major trends I believe will dominate the payments headlines in 2022.
1) Digital Payment Methods Transform (and Explode)
The past few years have shown consumers that there are more ways to pay than just checks, cards and cash. As a result of the pandemic, contactless payments adoption has surged. Today, more than half of all Americans use at least one form of contactless payments (mobile apps, contactless cards, etc.). And consumers are letting merchants know that they expect more digital payment options—57 percent say they are more likely to do business with a merchant that offers a contactless payment option.
New payment methods will continue to attract first-time users in 2022, such as virtual credit cards, which provide consumers with alternative credit card numbers to disguise their sensitive information when making online transactions. There are a number of reasons virtual credit cards are an alluring prospect: they are environmentally friendly, incredibly secure and easy to monitor. They also empower the customer by allowing them to set spending limits and expiration dates. Just like with contactless, once buyers use a virtual credit card, they’ll demand the option moving forward.
2) Tighter Payment Security
An unfortunate byproduct of the rise of digital payments is the increase in digital payment fraud. eCommerce fraud grew to more than $20 billion in 2021. As security threats loom over merchants and consumers alike, more advanced fraud prevention will become a necessity.
In the next year, multifactor authentication (MFA) will become more commonplace. MFA has three types of authentication factors—biometric identification, device in-use and traditional password. Just as consumers are used to opening their smartphones with a quick press of the thumb, consumers will get used to using MFA for purchases.
In 2022, consumers will have the ability to set up multiple layers of security while making purchases in real-time. When a consumer is using a credit card at their local market, they can instantly receive a message to confirm their purchase. In the time it takes to glance at a screen, the transaction is confirmed to be safe. These additional levels of security can drastically reduce the risk of fraud, a tremendous benefit to both consumers and merchants.
3) Better Bill Pay
Bill payment is the one guaranteed touchpoint your customer will have with your business every month or quarter, and since these interactions are guaranteed, there’s a great opportunity to make them stand out.
In 2022, we predict that businesses and merchants will level up their bill payment processes, from offering customers payment methods like PayPal to establishing recurring payments so customers can set it and forget it. In fact, almost 40 percent of consumers prefer to pay their bills through automatic checking account deductions or credit/debit charges. By offering more convenience and choice, companies can make ordinary bill payment experiences extraordinary.
4) Companies Will Offer More Financial Flexibility
The last few years have highlighted the importance of flexibility—in how we work, interact and communicate. Now, consumers have come to expect flexibility in their payment terms. With the rise of apps like Klarna and Affirm, companies are embracing the “buy now, pay later” option, letting consumers pay off purchases in installments rather than one single payment. On the flip side, consumers can also customize when they get paid, with some prepaid debit cards and even financial institutions developing early payday options. In some cases, early direct deposit allows consumers to receive their paychecks into their accounts up to two days early.
Large financial institutions are beginning to adopt these new technologies to create a pipeline of young consumers who place a premium on flexibility, convenience and financial freedom. I anticipate the increased implementation of financial flexibility in the next year as a tech-savvy generation continues to push institutions to reinvent their business to keep pace with digital transformation.
5) Recurring Payments Will Keep Going (And Going, And Going…)
Nobody likes to waste money—especially on something as avoidable as late fees. For that reason, many consumers have embraced recurring payments for regular charges, including cable, utility and rent bills. The notion of having to pull out a checkbook and pay bills monthly is outdated—and this trend will spread to the B2B space.
Unfortunately, payment failures can stand in the way of a successful recurring payments strategy. Payment failures can lead to customer churn, bad debt and a diminishing bottom line. Businesses are increasingly embracing automation when it comes to their payments, including recurring payments. B2B companies that embrace payment modernization can avoid failure and effectively set and forget their recurring payments.
Want to learn more about how payment security can make 2022 your best (and safest) year yet? Download our 3 Steps to Ensure Payments Security here.
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