What to Consider When Choosing a Payment Gateway?

Integrating a payment gateway into your process can be simple, but knowing more about it can provide the confidence you need to help you identify a trustworthy provider.

 

What Is a Payment Gateway?

A payment gateway is a technology merchants use to accept customer credit and debit card payments. The term payment gateway is broad and covers point-of-sale (POS) terminals in brick-and-mortar stores and online payment portals for e-commerce.

As modern consumers, most of us know what it’s like to interact with a payment gateway. Whether we’re buying groceries or ordering clothing online, we interact with these gateways to securely pay merchants with our cards. Many consumers expect these payment gateways as cash and checks slowly become a thing of the past. Businesses must keep up with consumer demand and provide payment gateways for greater customer satisfaction.

 

How Does a Payment Gateway Work?

Payment gateways act like bridges between merchants and financial institutions. When a payment gateway plays a role in a transaction, it passes credit card information from the merchant to the bank with the help of the credit card network. The general process follows these steps:

1. A buyer uses a credit card to purchase a product from a merchant.
2. The payment gateway pushes the transaction information to the merchant’s bank.
3. The gateway also identifies the credit card network and routes the transaction information to the right payment processor.
4. The payment processor sends the payment request to the bank that issued the credit card.
5. The issuing bank uses fraud detection to determine whether the transaction is legitimate and confirm that the buyer has enough credit to complete the transaction.
6. The issuing bank approves or rejects the transaction and sends the decision to the payment gateway and the merchant’s bank.

A payment gateway is responsible for supporting an issuing bank’s payment authorization. When a transaction is authorized, the issuing bank puts the required funds on hold. On the cardholder’s end, this hold looks like a pending transaction. The merchant must reconcile payments and send a batch capture for all pending credit card transactions to gain access to the funds.

It’s essential to note that a payment gateway is not the same as a payment processor, though both play a role in a transaction. A payment gateway is responsible for collecting customers’ credit card information and encrypting it for processing later. A payment processor takes this information and charges the customer’s financial institution or credit card provider.

 

Main Types of Payment Gateways

Payment gateways include three types—on-site, redirects and front-end checkout. Each of these types offers benefits and challenges, and one may be better suited to your needs than the others.

On-Site

With an on-site payment gateway, checkout and payment processing occur on the merchant’s site. The on-site approach gives you extensive control but requires more responsibility. When a merchant is solely responsible for the front and back end of payment processing, the company must consider security features, system updates and user experience.

Complete customization is one of the most notable benefits of an on-site payment gateway. Merchants control the user experience, so they can create a seamless payment process for buyers. However, upkeep will require regular attention, and businesses should be prepared to provide that effort.

On-site payment gateways are not an accessible option for every business because of the resources it takes to maintain them. Larger enterprises usually have access to this type of e-commerce payment gateway, but it may be out of reach for small and medium-sized businesses.

Redirects

With redirect payment gateways, customers are taken to a new page to complete their transactions. Redirects can be ideal for companies that lack the time or resources to manage on-site payment processing. Merchants have no obligation to keep up with updates or user experience metrics. However, businesses also have no control over the purchasing experience.

Front-End Checkout

With front-end checkout, buyers work through the checkout process on the merchant’s site, but the payment processing occurs through the gateway’s back end. Checkout will include reviewing items for purchase and entering a shipping address. Payment processing includes entering credit card information and waiting for transaction approval.

This payment gateway option is the moderate option among the three main types because it gives the merchant some level of control through their checkout process and eliminates back-end processing responsibilities. However, merchants should be aware that a gateway’s back-end process will influence user experience even when it’s out of their control.

 

Choosing a Payment Gateway for Your Business: What to Consider

Integrating a payment gateway into your checkout process can offer a boost to the customer experience and make it easier for your team to manage payments. Plenty of payment gateways are available on the market, but not every provider will offer the best solution for your investment. When exploring your options, consider the following questions to make an informed decision about the payment gateway for your business.

1. How Much Does Your Business Want to Spend on a Payment Gateway?

Cost is one of the most significant considerations when implementing a payment gateway, especially if you run a small or medium-sized business with limited resources. When researching payment gateways, you’ll want to look into a provider’s fee structure. There are three main cost areas to learn more about—setup costs, transaction fees and administration expenses.

While credit cards are a popular payment method, they also come with higher transaction fees. If you’re not prepared to take on these fees for the volume of purchases on your site, you may want to consider ACH debit transfers. This payment method has lower transaction fees, making it easier to manage financially.

2. How Secure Is the Payment Gateway?

Security when moving money back and forth should play a major role in your payment gateway selection. While you want to trust you’re getting the money you earned, you also want to protect your customers when they make purchases on your site. Fraudulent activity connected to your business can detract from a positive reputation.

During your payment gateway research, look for providers who comply with Payment Card Industry (PCI) data standards. This compliance is essential when working with credit and debit cards because those methods require data encryption. When a customer enters their credit card information, the gateway should encrypt the data to prevent hackers from accessing it during the transaction.

Another aspect of payment gateway security is tokenization. This practice creates a unique token with no intrinsic value for every set of sensitive information to make it inaccessible to outsiders.

3. What Level of Support Does the Payment Gateway Offer?

While payment gateways can be valuable tools for businesses, they can also pose challenges. If your gateway creates issues for your customers, this impact on the buying experience can influence your company’s reputation. Access to reliable support from your gateway provider helps maintain those positive customer experiences.

Support for your gateway can take many forms. Strong customer support offers various resources and methods of contact for troubleshooting needs. Considerations for support include:

• Self-service troubleshooting
• Over-the-phone customer support
• Platform resources for updates and bug fixes
• General guides for working with the gateway

4. Does the Payment Gateway Offer Automatic Recurring Payments?

Every payment gateway is built differently, and some will have more functions than others. Handling recurring payments is a notable benefit for companies that offer subscription models for their products or services. If subscriptions are a part of your business, your payment gateway should provide recurring payment capabilities.

A payment gateway that supports recurring payments will store buyers’ credit card numbers to charge on a regular basis. Many gateways offer this feature, but you will need an online merchant account to access it. You may consider the flexibility of payment options. For example, ACH debit capabilities can be an ideal option for some customers, and they may support a higher volume of recurring payers within your customer base.

5. Can You Use the Payment Gateway With Your Existing Systems?

Using a payment gateway that doesn’t integrate with your other systems can complicate the administrative side of your business. When searching for a payment gateway, look for a provider that will help you integrate the gateway with your existing billing and accounting software for greater ease of use.

Integration support is an excellent way to improve your overall efficiency. When your applications work well together, you can automate more processes and reduce administrative burdens for your team.

 

How Can CSG Forte Help You?

CSG Forte is a payment gateway that offers the payment flexibility consumers want. With the ability to take card payments online, at the point of sale and over the phone, every consumer can complete purchases in a way that’s comfortable for them. Our payments platform offers impressive capabilities, including tokenization, user-friendly bill presentment and many other features.

With CSG Forte, your business can join the modern world. Our solutions support large enterprises and small to medium sized businesses. With recurring payment capabilities, our platform also supports subscription-based services. See what our platform can do, and get started today.

Check Verification Guide for Businesses

Ensuring your business receives payments on time from customers is paramount to business operations. Whether your business deals with checks, eChecks or both, verification procedures can confirm that the payment is valid before you accept it. Check fraud is a prevalent problem for both consumers and businesses, resulting in significant losses.

Fortunately, verification procedures or systems can lower the chances that your business will experience payment fraud. Businesses can employ manual verification techniques but using an electronic process can provide automatic confirmation without requiring a time-consuming phone call or bank visit for every check.

 

What Is Check Verification?

Check verification confirms that a customer’s check and bank account are valid before transaction completion. This process ensures that payments will process as expected without waiting days to see whether funds clear in your account.

Verification procedures cover in-person and online transactions using checks and eChecks. With a developed process in place, you can secure your business profits and potentially prevent fraud.

 

Why Is Verification Necessary?

Electronic and paper checks comprise a significant portion of payment methods, with checks accounting for 14.5 billion payments and Automated Clearing House (ACH) debits for 16.6 billion. As these payment methods are still common, they are often a target for fraud. It’s recommended that businesses employ verification procedures because they can:

• Protect against losses: Confirmation lets you spot fraud before a customer leaves without paying for your products or services.
• Decrease returned checks: Ensure that customers have enough money in their accounts to cover the costs before you accept payment.
• Prevent payment evasion: With immediate verification, you can confirm whether a check will clear before you deposit it into your account, meaning you can verify payment before giving customers a product or service.

 

How to Verify a Check

Businesses looking to verify funds on a check may turn to several methods. The most basic way is by calling the customer’s financial institution. This process includes:

1. Inspect the check’s front to determine which financial institution issued it.
2. Search for the bank’s official website and a customer service number online. Don’t use the customer service number printed on a check, as it could be fraudulent.
3. Call the online service number and say you wish to verify a payment received.
4. Provide the account and routing numbers listed on the front of the check. These numbers are typically along the bottom, with the routing number first and the account number second.
5. Give the dollar amount written on the check.

Once you provide this information, the bank can confirm whether the check is valid. Depending on the bank’s security rules, the customer service representative may only state that the account exists, not the amount in the customer’s account. Other banks may verify a check’s funds, the account number and issuer and whether the account is active.

Some banks deny phone confirmation to protect customer privacy. In these cases, you must visit the nearest bank branch in person. You can also go to your bank, but the customer’s bank will give you a faster answer and more secure information.

Signs of Fraud

While your best course of action is to confirm validity with a bank or online fraud detection service, you can also look for warning signs like:

• Suspicious behavior: Actions like requesting cash for a check often indicate fraud.
• Check’s appearance: Authentic check backs include security features like a complicated pattern and the text “original document.”
• Microprint: Check backs also have tiny words printed in their design that often appear as solid lines or dots when they don’t come from a bank.

Businesses that frequently accept checks should set rules to reduce the chances of payments bouncing or fraud. These regulations might include requiring employees to report signs of fraud or keeping a business record of customers with previously rejected checks.

eCheck Verification

Electronic checks are created and sent to businesses online. As such, they have a different verification process. Procedures like calling a bank may not be necessary because eChecks process faster than physical checks, usually within 24 to 48 hours. Customers who use eChecks have less time to remove funds from their accounts, which would cause a check to bounce.

eCheck processing services often have built-in securities as well. The processor will verify a check online so you don’t need to. eChecks are also encrypted to keep information safe when sent online. These checks are much more challenging to steal and use fraudulently.

 

Sources for Check Verification

Sources for verification include:

• Your business bank: Your company’s bank can contact a customer’s bank to confirm the check information.
• A customer’s bank: The bank name is listed on the front of the check.
• Third-party services: These methods usually consist of an online service that confirms information based on check data.

You may verify checks using any of these options or a combination of them, but whichever you use, ensure it is legitimate. For example, don’t use a customer service number printed on a check. Instead, find the correct number on the bank’s website.

If your business uses merchant services, your service provider may include verification services or link you to another party that does. When you work with CSG Forte as your merchant payment processor, you can get merchant payment services from us.

Is Live Check Verification Secure?

As long as you use a legitimate form of live verification, it is very secure. Immediate payment confirmation offers a higher level of security than waiting for checks to clear because you receive approval or denial within minutes.

 

The CSG Forte Check Verification Process

With CSG Forte payment processing systems, you can choose between three verification methods: Validate, Validate+ and Authenticate. With each of these options, your business can automatically authorize checks and electronic funds transfer (EFT) payments using the routing and account numbers provided. Our Validate+ and Authenticate services offer an added layers of security features.

Things We Look for

Our procedure consults proprietary databases to check for suspicious information, including:

• Bad routing numbers: The routing number is invalid or goes to a different location than it should.
• Invalid checksums: The sum on the check doesn’t match bank records.

This service also verifies that the account exists and is open and valid. Payments that do not receive a definitive response move on to a national negative check database, which includes a comprehensive list of people who have previously written a bad check or one that bounced.

Based on the data received during our information search, the system will send a message indicating whether the payment was accepted. High-risk or insufficient funds checks receive an automatic decline. Others are accepted but may face further verification for your business’s safety. With Validate+, you can configure which results should lead to an approval or decline for added control over payment processing. When using CSG Forte’s Authenticate service, businesses are also able to verify account ownership, reducing the risk of fraud even further.

 

Choose CSG Forte for Online Check Verification

Online check verification ensures your business gets the promised funds for a product or service. With immediate confirmation, your business gains peace of mind when processing checks and electronic payments. Learn more about how our Validate service from CSG Forte processes all ACH payments, including eChecks, and provides immediate denial or approval to protect your business. Discover how to get started today.

Use Recurring Payments to Predict Your Revenue Stream

As subscription models become more popular, recurring payments are as well. A recurring payment is a regular payment for a product or service. They benefit your customers by improving their experience and are great for your company by providing a steady revenue source.

 

What Is Recurring Payment Processing?

Recurring payments are automatic charges for a product or service used regularly. The customer agrees to have their card charged automatically according to the merchant’s payment schedule. Charges are made weekly, monthly, annually or whenever the customer’s subscription needs to be renewed.

Recurring charges are divided into two types based on the amount owed:

1. Fixed recurring payment: The customer is charged the same amount every pay period, regardless of usage.
2. Variable recurring payment: The customer is charged a different amount every pay period based on usage.

A company needs a payment service provider and merchant account to accept and process these payments.

Recurring payment solutions incur some costs. A recurring payment system charges a flat monthly fee and a percentage of your transaction volume. Costs will also vary based on the capabilities you need and the credit card issuer.

 

How Do Recurring Payments Work?

A recurring payment model takes several steps to set up:

1. The customer enrolls in a recurring payment option: The customer signs up for a subscription or opts to have their credit card charged automatically based on the payment schedule.
2. The customer chooses a payment method: The customer decides which payment mode to use for their recurring payment, such as a credit or debit card.
3. The customer agrees to the terms and conditions: Recurring payment systems must be approved by the customer. When customers accept the terms and conditions, they consent to the system storing their card details and charging their account every pay period.
4. The payment details are stored: The customer provides their card details, which the payment gateway stores for further transactions.
5. The payment is processed: The customer’s credit card network and issuing bank and the merchant’s acquiring bank approve the transaction, and money transfers from the customer to the merchant account.
6. The customer’s card is charged every period: When the next payment is due, the customer will be charged the amount owed based on the card details on file. The customer will get an invoice beforehand and a payment receipt once the transaction is complete.

Once this process is complete, your business can accept recurring payments from customers and receive payments within a few business days. The payment process repeats automatically every billing cycle, only stopping if the customer stops recurring payments or ends their subscription, or if the payment details are incorrect.

 

Businesses That Use Recurring Payments and Processing

Recurring payments used to be exclusive to a small sector of products and services. Now, many businesses are implementing a subscription model and allowing customers to make recurring payments. Any company offering products or services that customers frequently need can implement a subscription service.

Invoice-based recurring payment systems are ideal for:

• Subscription services and club sales: Recurring payments can pay the service fee every period, so the customer can keep participating in the service. Examples include streaming services and magazines.
• Membership services: Companies that run invoices for services can automate payments every billing cycle. Examples of these businesses include fitness clubs, tutoring companies and dance studios.
• Service providers: Service providers are businesses that service a customer at regular intervals and charge based on time. Examples include child care, lawn care and house cleaning.
• Government and municipal services: Government organizations can take advantage of recurring payments to ensure citizens pay their taxes on time.
• Services with payment plans: Companies that charge a high-cost service often allow customers to make scheduled payments over months. These smaller payments add up to the total service cost. Recurring payments can help customers make their monthly payments.

Recurring payments for online businesses can be used for:

• Online services: Many online services charge their customers for access to their products. Examples include mobile apps, virtual service providers and Software as a Service (SaaS).
• Subscription boxes: Subscription box companies sell subscriptions to their packages online. Subscribers enroll in the service and can be charged every period before the box is shipped to them.
• Restricted content services: Some companies make special content for paid subscribers only. Recurring membership payments can help ensure those who pay for the content can access it.
• Online learning: Online schools can charge their students every payment period for access to courses and instructional materials.

 

Benefits of Accepting Recurring Payments

Businesses that implement a recurring payment solution experience several benefits. They can:

• Have a predictable revenue stream: Subscription service payments make it easy to get predictable and stable revenue every pay period. With ad-hoc billing, your revenue is inconsistent since some customers may neglect paying their bill.
• Offer several payment options: Your customers can choose from various payment methods and schedules that work for them. Being this flexible without recurring payments is more difficult to manage.
• Simplify their workflow: Recurring payments automatically process invoices and payments, so your team will have less work to do every billing cycle.
• Enhance the customer experience: Recurring payments are convenient for your customers. They can set up their payment details and let the service charges pay for themselves without doing anything manually. By paying consistently, your customers will enjoy continuous service.
• Increase customer retention: Recurring payments encourage customers to continue to use your product or service, improving customer loyalty.
• Reduce the risk of fraud: Since the payment gateway stores the customer’s payment details, the risk of fraud is reduced.

 

How CSG Forte Helps With Recurring Payment Processing 

A payment gateway is one of many ways to process a recurring payment. Payment gateways are part of the recurring payment process by storing the customer’s card details for future charges. Companies can work with a payment gateway to support transactions.

Accept and process recurring payments with the payments platform by CSG Forte. With this platform, you can schedule recurring payments with your customers and manage these payments through account verification, returns management and more. You’ll also benefit from high gateway availability and minimal downtime with our enhanced payment gateway performance.

Contact CSG Forte for more information, or sign up for your recurring payment system today.