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Read More >>As a merchant, you have two main options for credit card payments: integrated credit card payment processing or third-party payment processing.
What are the key differences? Essentially, credit card payment integration is done by your POS system provider. They create your POS software as well as manage payment processing.
There are many benefits to using integrated payments rather than a third party. For example, POS payment processing integration can help improve the customer experience, increase efficiency, and ensure smooth and effortless transactions.
You might be wondering: How do integrated payments work? What makes integrated payment processing and third-party payment processing different from each other? And why should businesses consider a credit card processing integration platform? This guide covers that and offers a comprehensive picture of using an integrated payment processor in retail.
What Are Integrated Payments?
Integrated payments refer to a POS system that also functions as a payment processor. In the past, businesses needed a POS system, but a third party processed payments with a standalone terminal. Now, many POS providers also offer payment processing services, e.g., they’re “integrated” into the system.
Therefore, to start accepting credit card payments, a retailer doesn’t need any third-party hardware or card readers. The credit card system is integrated into the POS.
Ultimately, integrated processing enables smooth and effortless transactions. What sets it apart is the convenience it provides to customers by allowing them to use various payment methods, such as credit and debit cards. This solution eliminates the inconvenience of manual processing or the need for separate terminals, resulting in a fast and efficient checkout experience for both businesses and their customers.
Key Benefits of Integrated Payment Systems
As mentioned before, POS payment processing integration provides easy and seamless transactions, boosts efficiency, and enhances the customer experience.
Integrated payment systems provide the following benefits:
1. Save money
By integrating payments into your business, you can achieve significant long-term savings. This allows you to bypass the laborious and time-consuming tasks of manually inputting and reviewing transaction data as account processes become automated. Many POS payment processing systems offer the best rates, as well as potentially discounts on hardware and software fees.
2. Fewer accounting mistakes
Integrated payment systems make accounting processes easier. This allows the received payments to be automatically routed for accounting. This reduces the need for reconciliation and syncing data between your POS and a third-party platform.
3. Stronger security
This solution better protects customers’ sensitive information. This is because there are fewer data sources and routing issues. By opting for this solution, businesses can minimize the chances of data breaches and fraudulent activities.
4. Diminish fraud
Merchants can identify potential fraud by analyzing trends and patterns in sales through these solutions. Digital payments provide a high level of security and protection against fraudulent transactions, thanks to their utilization of secure and encrypted channels.
5. Real-time data
Credit card processing integration offers businesses the benefit of real-time transaction monitoring. This streamlines accounting processes and ensures greater accuracy. Furthermore, it provides instant access to valuable transaction data and insights, offering pivotal information for a business’s daily operations.
6. Marketing integration
Thanks to integrated payment solutions, businesses can easily access and analyze customer spending habits in real-time. This provides faster and more reliable data, allowing businesses to effectively sort customers based on their purchasing behavior.
By inputting this information into your POS CRM software, businesses gain valuable insights into which products are successful and which ones are not. With this information, businesses can optimize their marketing strategy, promoting successful products and discontinuing underperforming ones, leading to long-term success.
7. Better relationship with payment processor
With this solution, you have better access to support staff. That’s because you already have an existing relationship with your POS provider. An established relationship can also help eliminate high-risk credit card fees, for example. Your POS provider knows your business, and that you operate legitimately. Therefore, they’re less likely to see you as a risk.
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How Payment Integration Benefits Customers
Payment integration offers numerous benefits, one of which is significantly boosting customer satisfaction. Some of the key benefits include:
More payment options
With the majority of integrated credit card processing solutions, customers have the flexibility to choose from a range of payment options.
These options include:
- Credit cards
- Debit cards
- Gift cards
- Digital wallets (like Venmo, PayPal, or Google Pay)
More convenience
Lack of integration can lead to frustrating checkout experiences, abandoned carts, and dissatisfied customers. However, by implementing an integrated payment solution, businesses can streamline the process, increase speed, and enhance security. Additionally, customers can conveniently make purchases directly through the business’s website or mobile app, eliminating the need for separate payment portals.
Payment processing on a recurring basis
Having payment processor integration for your business subscriptions not only simplifies billing but also enhances efficiency when it is connected to the merchant’s CRM software. By requiring customers to provide their payment information only once, the system can securely store and automate future invoicing and ongoing payments.
Stronger security
Integrated payment solutions keep customers’ confidential information protected within the business’s secure systems. This includes credit card information, routing numbers, and personal details. Instead of sending this sensitive data to an external payment gateway, the business processes it internally.
Integrated Payment Processing vs Third-Party Payments Processing
Here’s a closer look at how an integrated merchant services account compared to third-party processors:
Integrated payment processing
An integrated payments solution connects a payment processor to a POS system for streamlined payment processing and transaction completion. This eliminates the need for manual processing and separate terminals, resulting in a faster checkout process for both merchants and customers.
This type of solution offers features such as storing customers’ personal information and tracking sales data. Thanks to ecommerce payment integration, customers can conveniently make payments without being redirected to external websites or apps.
Pros: </h4 > Faster checkout times
No need for data syncing and reconciling
Better customer data tracking and payment profiles
Reduced costs on hardware and potential savings on processing fees
Cons:
Initial higher costs
Lack of customization options
Possible integration challenges
Data Security risks
Third-party payment processing
In contrast, payment processing that’s not integrated lacks communication between the payment processor and the point of sale. This means that transaction data is not captured automatically during a sale, necessitating the entry of customer payment information into a separate payment terminal. Additionally, without integration with the POS system, businesses cannot access reporting and inventory data automatically.
Pros:
Many established options (better recognition with customers)
Ease of accepting credit cards
Reduced chargebacks
Increased security
Cons
Risk of reconciliation errors
A lack of real-time data
Potential hidden fees
Slower checkout process
Integrated Credit Card Payment Processing and FTx POS
Discover the benefits of integrated credit card processing with FTx Card Payments and find potential cost savings with your current processor.
FTx offers you the flexibility to choose between payments that are integrated and third-party integration, giving your business options that many providers don’t. While most systems require you to pick one or the other, we let you choose what works best for you.
By using Datacap NETePay with your existing processor and payment hardware, you can easily add this solution to your payment system. It’s important to note that successful integration needs cooperation from your current processor to connect with Datacap NETePay. This choice ensures that you can select the processor that meets your company’s specific needs, providing a tailored and efficient credit processing experience.
We’re also dedicated to helping businesses get the best rates. With FTx POS, you can maximize savings and improve your bottom line.
Other benefits of FTx Payments include:
Enhanced reporting and inventory management across multiple stores
The option to initiate online transactions and finish them in-store to prevent higher interchange fees for cards that are not present and to activate chargeback protections
Roll out dual pricing and cash discounting
To get started with FTx Card Payments, be sure to get in touch with us today to schedule a consultation and check out a demo!
FAQs
The main difference between the two is that integrated processing involves integrating payment capabilities directly into existing business systems, while non-integrated processing requires a separate system for handling payments.
Another difference to note is that when it’s integrated, it allows for a more streamlined and efficient payment process as there is no need to switch between different systems or manually enter data. Non-integrated processing may be slower and more prone to errors in comparison.
Integrated and embedded payments are both popular methods used by businesses to accept online payments. While they may seem similar, there are key differences between the two.
Those that are integrated refer to a payment solution that is seamlessly integrated into a business's existing system or software. This means that customers can make a payment without ever leaving the company's website or application. The integration is done through an API (application programming interface), which allows for a smooth and secure transfer of data between systems. Thanks to integration, businesses have more control over the entire payment process.
On the other hand, embedded payments involve embedding a third-party payment platform directly into an existing system. This allows for quick and easy implementation of online payments without having to build a payment system from scratch. Embedded payments are often used by small businesses or startups with limited resources and technical expertise.
Billing and payment processing are key parts of any business transaction. Although they might seem similar, they have important differences.
Billing involves creating and sending invoices for goods or services provided by a company. It includes recording sales, fees, and other charges related to what a customer buys or uses. The billing process also tracks unpaid invoices and manages collections if needed.
Payment processing, on the other hand, is about handling incoming payments from customers. This can include credit card transactions, online payments, checks, cash, and more. Payment processing makes sure that all received funds are accurate, properly recorded, and securely deposited into the business's accounts.
There are some key differences between POS (Point of Sale) and payment processing, even though both are crucial for transactions. POS refers to the physical location where a purchase happens, while payment processing is about the back-end systems that allow electronic payments.
One major difference is their main roles. A POS system facilitates transactions at the time of purchase, usually through credit or debit card payments. On the other hand, payment processing manages all parts of electronic payments, including authorizing transactions and settling funds in merchant accounts.
Standing for Integrated Circuit, IC is a technology used in credit card processing to provide secure transactions. It consists of using a small microchip embedded in the credit card, which stores and protects sensitive payment information.
This technology has become increasingly popular in recent years thanks to its ability to combat fraud and protect customer data. Unlike traditional magnetic stripe cards, which are easily cloned or skimmed, IC cards generate a unique code for each transaction, making it nearly impossible for hackers to get hold of valid card information.
VCC processing, or virtual credit card processing, is a method of payment where a temporary credit card number is generated for a single transaction. This virtual credit card number can be used to make online purchases without revealing the actual credit card information, which adds an extra layer of security.
VCC processing is typically used by businesses and individuals to protect their financial information when they’re making online payments. It also makes it easier to track and manage individual transactions.
Payment processing offers several key benefits that are essential for both businesses and consumers.
Some of these advantages include the following:
- Convenience: Payment processing allows customers to make payments quickly and easily without needing to carry cash or write checks. Thanks to online payment integration, online payment options make the process even more convenient because customers can make purchases.
- Increased sales: For businesses, offering multiple payment options through payment processing can result in increased sales. Customers may be more likely to complete a purchase if they have their preferred payment option available.
- Quicker transaction times: Traditional methods of payment like checks or money orders can take days to clear, resulting in delays in receiving funds. However, with payment processing, funds are typically deposited into the business's account within a few days or even immediately in some cases.
- Improved security: Payment processing offers enhanced security measures like encryption and fraud detection to protect sensitive customer information. This not only prevents potential losses for businesses but also provides peace of mind for customers.
