Frequently Asked Questions About Payment Processing

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.


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.


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.

With CSG Forte, integrated payments are an all-in-one solution that benefits your business and customers.

 Payment Security

No payment processing FAQ would be complete without info about payment security.

1. What Is Tokenization?

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?

Nacha offers rules and requirements for any organization leveraging ACH payments. Here’s a brief overview of what Nacha expects your business to do:

  • 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.

Contact us online to simplify and secure your payments.

ACH Fraud

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:

  • Multifactor authentication: For your safety and privacy, we protect your data with layers of security.
  • 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.

To take the next steps with our secure platform, fill out the online form and a payment expert will be in touch. You can also contact our team if you have any questions before you get started.

What Are Electronic Payments and How Can They Help Your Business?

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.

See what electronic payments can do for you, and get started with our platform today.

Million Dollar Payments: Nacha Boosting Same-Day ACH Maximum

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

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.

Power to the People: Digitized Payments Make Payments Safer and Easier

The first electronic payment may have debuted in 1871, but digital payments have really shown their worth in the last 18 months. They have presented an ultra-secure, convenient and hygienically safe way to make payments without physical contact. Recent surveys show that digital payments are here to stay— 45 percent of US adults say they are likely to use digital or contactless in-store payments regularly in a store after the pandemic.


What Are Digital Payments

Consumers are increasingly growing accustomed to digitized experiences. With a few taps of a smartphone, a pizza can arrive on their doorstep within a half-hour—no phone call, cash or physical contact needed. Digital experiences also offer an extra layer of safety during an ongoing pandemic. As low touch and digital experiences become more ubiquitous, consumers have come to expect them to be available, especially when it comes to payments.

Payments play a pivotal role in the customer experience—and contactless payments give consumers a safe, secure and easy way to pay.  According to Forbes’ State of Contactless Payments 2021 report, when all other factors are equal, consumers will choose a store that offers contactless checkout over one without contactless. In terms of staying competitive, digital payments are no longer a nice-to-have—they are a must.


Benefits of Digital Payments

There are several benefits for both merchants and customers when it comes to digital and contactless payments.

  1. Convenience— When asked why they wanted contactless options, 2% of respondents cited convenience as their primary reason for using contactless payments. Contactless payments remove the need for PINs or signatures.
  2. Enhanced Experience—Digital payments offer a more seamless customer experience while cutting operational costs for merchants.
  3. Security— Contactless payments featuring RFID and NFC-enhanced technologies are secure, especially when paired with an enterprise-grade POS terminal with advanced security.


Choose CSG Forte for Digital Payment Solutions

From managing employees to balancing the books to creating an exceptional customer experience, merchants have more than enough to worry about—partnering with a payments provider with the right solution helps.  At CSG Forte, we offer a full suite of solutions to make digitizing payments scalable, secure and convenient.

Our V400C Plus device makes contactless payments easy. The device was designed with merchants and their customers in mind—with enhanced features including a color touchscreen interface, wi-fi connectivity and thermal printing, merchants can smoothly conduct transactions and provide an exceptional customer experience.

The V400C Plus can be used as a standalone device, be connected to a point-of-sale application, or seamlessly integrate with CSG Forte products. Merchants can accept every major credit card, as well as mobile wallet payments, like Apple Pay and Google Pay.

Combined with our cloud-based platform Dex, merchants can gain insights into what payments customers prefer and allow them to easily manage the entire transaction lifecycle.

Contactless payments were on the rise before the pandemic—COVID-19 has merely accelerated its momentum. When powered by the right technology, merchants can satisfy customers and boost revenues by offering secure and convenient contactless payments.


Scaling Digital Payments Smarter and Growing Businesses Faster with CSG Forte

From the renewed emphasis on contactless commerce to the promise of real-time payments, the business of facilitating transactions for goods and services is as hot a subsector of fintech as any other. To this end, we caught up with Jeff Kump, Head of Payments for recently rebranded CSG Forte, a unified payments platform based in Allen, Texas, to talk about innovations in payments, the power of enabling technologies, and the role played by companies like CSG Forte.


Growing Your Business With Digital Payments

Since 2006, Kump has been tasked with leading and growing CSG Forte’s operational and cross-functional teams. Additionally, he has proven instrumental in advancing CSG Forte’s corporate development and growth strategy, serving as Forte’s COO and CFO before the company’s acquisition by CSG in 2018. During his tenure at Forte, the company was recognized by the Inc. 5000 as one of America’s Fastest Growing Companies for eight consecutive years. The company is an alum of our developers conference, FinDEVr, having hosted presentations on payment technology at events in 2014, 2015, and 2016.

What problem does CSG Forte solve and who does it solve it for?

Jeff Kump: To start, we offer one of the most complete and customizable payments solutions in the world, enabling companies to scale digital payments smarter and grow their business faster while also reducing costs.

Offered as a unified end-to-end payments platform, our technology was purposefully engineered to make it easy for companies and integrated software providers to set up, integrate, quickly adapt to changing needs and scale fast—because speed so often translates to success. We have done this by managing the entire payment lifecycle within a single platform, fueled by modern APIs and RESTful architecture that transforms their payments operations into a competitive business strategy.

This agile foundation has also helped us to succeed across hundreds of industries. It can be difficult to find a partner both competitive on price and legitimately equipped to provide the custom solutions necessary to succeed. Our team leverages deep yet specific channel expertise to support our customers’ verticals, including security, compliance, and integration.

Our unique approach to payments has enabled us to grow rapidly – outperforming larger competitors and transforming payments from an expense to a critical growth driver. From 2010 to 2018, Forte was, for example, listed on the Inc. 5000 list as one of America’s Fastest Growing Private Companies. Today, we work with over 70,000 merchants across hundreds of industries in North America.

What impact did the COVID-19 pandemic have on your business? What are some of the biggest takeaways from 2020?

Kump: When COVID hit, many companies were forced to transform how they interact and support their customers and employees. The pandemic also had a lasting impact on the payments industry, but maybe not in the way that many expected.

While contactless and mobile payments certainly received their fair share of attention, it was the rapid rally around electric payments that was critical to the success of social distancing, stay-at-home orders and bill payments. Merchants and governments across a range of verticals turned to CSG Forte to get smart in e-commerce – quickly enabling their websites to handle online orders, introducing store-specific apps that allow their customers to shop more easily from home or encouraging pay-by-phone.

We also saw a surge in self-service payments kiosks and anticipate this interest in these kiosks will increase for businesses and consumers alike who want to arm themselves against future emergencies, rely less on cash, and encourage social distancing habits post-pandemic. Kiosks are a flexible solution, offering a breadth of payment options to support both people using cash (including underbanked populations) and payers who prefer to avoid human interaction. Moving forward, you will see a rise in VR (Voice Response)-enabled and Conversational AI-enabled kiosks that minimize the number of times payers need to touch the screen or keypad.

Related to the rise of contactless payments, it has not all been hype. As consumers have returned to their normal in-person shopping habits, more and more merchants have turned to CSG Forte in the last year to put in place the point-of-sale infrastructure that supports contactless options and mobile pay.

Which of the main payment trends – digitalization, tokenization, contactless, the security/fraud challenge etc. – will have the most impact on payments in the near term? What will businesses need to do in order to successfully take advantage of these trends?

Kump: We think that digitalization is the most important trend for businesses to follow and act on right now – paving the way for the rise in virtual cards, contactless, and other payments advancements.

Reinforced by COVID, industries are shifting from paper methods to digital processes, and more transactions are taking place online. Digital payment solutions can improve security, accuracy, efficiency and profits, giving businesses a competitive advantage in a digital economy. For instance, ACH payments are more secure and considerably faster than paper checks, cost less to process, and leverage advanced technologies to protect against check fraud, data breaches, and identity theft.

The challenge of digitalization is addressing the security concerns it presents. With increasing digitalization, hackers gain more access to sensitive data, leaving individuals and enterprises vulnerable. Over half of U.S. merchants have faced a data breach at some point – in 2017, over 19% reported an incident. About 60% of consumers say they will actively avoid businesses that have experienced a recent data breach, especially when it involves credit card information.

With that in mind, businesses should invest in technologies such as End to End (E2E) encryption, EMV, and tokenization that can mitigate risk related to fraud and security breaches caused by bad actors. E2E encryption can be used alongside digital platforms that support point-of-sale (POS) transactions and IVR phone payments; the technology hides payment information and converts it into an unreadable code as it is transmitted across the payment network that is decrypted with a private key upon reaching the intended destination. Merchants who have POS devices that accept contactless payments are able to securely transmit payment data using EMV technology that works by generating a one-time transaction code. The code is unique to each purchase, eliminating the fraud risk of duplicate credit cards that often occurs with magstripe cards. Tokenization is used for eCommerce, recurring and automated transactions, and stored cardholder data. Tokens replace the payment data with a randomly generated code that can only be exchanged for real data by the payment processor that stores it. These are often used by merchants that offer automatic/recurring payments like subscription- or membership-based services. Tokens are easy to use and effective for the security they provide. Any cybercriminal that gets their hands on tokenized data will find it unreadable, as only payment processors can exchange tokens for real data, ensuring both external and internal protection.

Implementing secure technology such as E2E encryption and data tokenization can help protect businesses from enduring the negative and costly impact of fraud and data breaches that can also cause reputational harm to their brand. CSG Forte has several solutions that are out-of-box and/or easy to integrate and can reduce the scope and burden of managing PCI and Nacha compliance requirements. Businesses that do not have these protections in place should engage a trusted payment processor, such as CSG Forte, to assist with implementing these necessary security measures.

CSG Forte announced a partnership with CivicPlus this spring. This reflects one trend – government modernization – that was accelerated by the pandemic. Can you tell us more about the partnership, including how it came about?  

Kump: Government modernization is a hot topic indeed. With many offices closed to the public in 2020 and into 2021, government agencies turned to CSG Forte to quickly evolve the way they do business. In response to sky-high demand, we doubled down on our partnerships and innovations that empower the government vertical in the last year – joining forces with CivicPlus, gWorks, SeamlessDocs, and Accela, to name a few. In 2020, we were also named a preferred partner by Nacha for Government Agency ACH Payment Gateways.

CivicPlus and our CSG Forte team have been bumping into each other for a couple of years now, having been involved in similar projects with local municipalities and state governments. After a few of these encounters, and one where we helped them to quickly get some new accounts deployed, the idea of a true partnership truly took root – and is what we announced this spring.

By partnering with CivicPlus, we can offer over 4,000 local governments a full end-to-end payments solution that accelerates the evolution of traditional payments services and meets the needs of today’s digital-savvy citizens while providing key capabilities needed to drive an industry-leading online payments experience. This includes:

  • Enhanced security: E2E encryption protects sensitive card data throughout the transaction lifecycle
  • Seamless payments: Secure, online payments received instantly through an intuitive, easy-to-use platform
  • Check processing with verification: Gives government agencies the ability to accept checks with confidence, providing checking account validation. Verification capabilities meet new requirements set forth by Nacha
  • Updated payment status: Automatically records the payments status to keep the system updated in real-time

What else can we expect from CSG Forte over the balance of 2021?

Kump: First off, we just rebranded the business. Previously known as Forte Payments Solutions, the holistic CSG Forte rebrand includes a new logo, website, and social pages that position CSG’s payments business for rapid growth into new regions and across the hundreds of verticals it serves.

As we look at innovation and product enhancements for the remainder of the year, our focus at CSG Forte is to simplify the customer experience and improve their journey. Consumers are increasingly interested in Apple Pay and Android Pay, among others, so we are enhancing our product roadmap to include digital wallet options for merchants. Additionally, we are transforming the way that we manage transaction monitoring to ensure a seamless processing experience for merchants.

Our customer-centric approach is also focused on developing solutions that minimize compliance burdens such as Nacha’s “Supplementing Fraud Detection Standard” mandate, which impacts many of our merchants who leverage ACH services, as well as accelerating value delivery to merchants by reducing onboarding time so they can begin processing transactions faster. We will continue to evolve our payments platform to align with the voice of the customer and ensure we are not only meeting but exceeding their expectations, making ordinary customer experiences extraordinary.

Jeff Kump is Head of Payments at CSG and leads the newly rebranded CSG Forte business, where he oversees go-to-market strategy and new opportunities in the global payments market. Kump previously served as Head of Operations for Forte, focusing on continuous business process improvement, risk and fraud management and providing an unparalleled customer experience.

This post originally appeared in Finovate.

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.

What is a Payment Channel?

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.


Payment Channels CSG Forte Supports

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.


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.


Payment Channel Solutions For Your Business

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.

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.


Anticipating Payment Trends in 2021

  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.


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