Integrated Payments
Costs of Processing
Strategic Software Developers Choose Payments Integration that Maximizes Business Growth
![Chris Wheeler](https://www.paystri.com/hubfs/Website/Team%20Page/ChrisWheeler.jpg)
Chris Wheeler ● June 5, 2024 ● 9 min read
Taking the "easy" way out by integrating with a payments platform like Stripe may seem like the best way to quickly offer payments functionality to your clients. However, quick payment processing integration may be the only real advantage.
While payments integration makes life easier for your customers' accounting and back office teams and enhances checkout with fast, smooth experiences, there's a benefit you may not see until you take a step back and look at the big picture. Integrating with the right payment solution - and working with the right payments partner - helps your software growth.
Maximizing the success of your software company and the revenue it generates over its lifetime depends on maintaining relevance. The innovative software you brought to market must be agile enough to compete with other solutions as technology, industry trends, and user preferences evolve. And the rate of change is accelerating.
In the B2C or B2B market, you're facing the challenge of keeping up with the dynamic payments industry, which presents some daunting challenges.
Consider companies with field services teams, for example. Software developers must equip field teams with mobile devices to enable them to operate in the field. But to enhance productivity, cash flow, and their customers' convenience, software developers also need to enable field teams to accept payments, including credit, debit, contactless, mobile wallet, and eCheck/ACH.
Field teams can streamline processes even more by sending digital invoices to customers with a payment link and the payment solution tokenizes cardholder data to make future payments quick and easy.
As your market becomes more competitive and your users demand more functionality from the solutions you provide, you need to approach payment integrations strategically.
The best strategy is to choose a platform and a payments partner that will best meet your customers' needs today and tomorrow, helping you adapt and stay relevant -- rather than stagnate or fall behind while other software developer businesses grow.
Future-Proof, Frictionless Integrated Payments Solution Features
Although it may be tempting to choose processing integration designed for easy integration, it may not meet all of your customers' needs or provide the most value to your business in the long run.
Before you invest time into payment processing integration and establishing your clients with those payment companies, consider its capacity to keep up with payment and industry trends and meet customer expectations for friction-free payments, now and as your customers' businesses scale.
Keep in mind that your customers who only accept EMV contact credit and debit cards now may eventually want to enable ACH payments or contactless and mobile wallet payments to make transactions smoother and more convenient.
Your customers may want to take advantage of Level II or Level III processing for business-to-business (B2B) or business-to-government (B2G) transactions to decrease the processing fees they pay. Or, your customers may begin to accept recurring payments and would benefit from account updater to minimize declined transactions.
Other features that can remove friction from payment transactions include:
Hosted payment pages (HPPs)
Customizable HPPs allow your clients to direct their customers to a payments page that your payments partner hosts, eliminating web development and maintenance. HPPs also reduce Payment Card Industry (PCI) scope, since payment data is collected and managed by the payment processor, not your client.
Virtual Terminal
For greater flexibility, find a payments partner that allows merchants to run transactions, from sales to refunds, voids, and credits, from any computer or device. A PCI-compliant virtual terminal solution gives your clients those capabilities.
Electronic Invoicing
Choose payments integration that allows your customers to generate invoices digitally and accept one-time payments, payments through their accounts in a payment portal, or recurring payments for subscriptions or regular services.
You'll see higher customer satisfaction and more ROI from payments integration if your partner's platform offers functionality that allows your users to transact in ways that make the most sense for their businesses.
Although your clients may not need all the features of your partner's payment platform today, they'll have the option to use them when their business operations scale or change in the future --without requiring you to invest the time and expense of a new processing integration.
A Word About Payment Processing Costs
Another factor to consider before you invest in payments integration is the payment company's fee structure.
Some fees make sense for high-volume, enterprise businesses, but they're cost-prohibitive for smaller merchants. On the other hand, an additional fee per transaction could make the opposite true.
Make sure you and your payments partner align on your target market and give them access to payment processing that they can afford. If you choose to work with a company whose primary benefit to software developers is easy integration, you probably won't find yourself with a partner willing to work with you to optimize rates for your customers.
Also, consider whether your payments partner offers tools and services that help your clients control their processing costs. A cash discount program allows your clients to lower their credit card processing fees by encouraging their customers to use cash. Another option is surcharging; merchants add a fee to cover payment processing costs if the customer uses a credit card.
Merchants who choose to offer a cash discount or to surcharge must be careful to follow state laws and card brand regulations to ensure compliance. Requirements include signage that keeps all customers informed of discounts or charges and receipts that show the surcharge or discount.
Partnering with a payments company that supports these programs and the tools merchants need to run them compliantly will help your clients operate more profitably and help you build stronger relationships with your customers.
Security and Reduced PCI Scope
Software developers must do their due diligence to ensure integrated payments solutions are PCI compliant. But using a PCI Data Security Standard (PCI DSS) validated solution is only one step toward keeping cardholder data safe and helping your clients reduce their PCI scope.
A multilayered approach to security will reduce the risk of a data breach while making PCI compliance easier to achieve. Software developers should work with an integrated payments partner that offers PCI-validated point-to-point encryption (P2PE) or end-to-end encryption (E2EE). Encryption ensures that a hacker or other malicious actor can't see (or sell) actual card numbers, account holder names, or other sensitive information.
Another essential security technology is tokenization, which replaces information with random strings of alphanumeric characters. Merchants can keep tokens, managed in a token vault by a service provider, to associate cardholder information with their customers without ever putting it at risk - even merchants can't see the actual data.
But another advantage of using these technologies is limiting PCI scope. Because human-readable cardholder data is never collected or used by the merchant's system, it doesn't have to meet extensive requirements to comply with PCI mandates. This same concept applies to both cloud integrated or semi-integrated payments hardware, ensuring you can capture card present payments and even tokenize for reuse for recurring payments, yet keeping your customers and software out of PCI scope.
Choosing the right payments partner can also remove friction from PCI compliance. Companies that recognize the burden that requirements like the self-assessment questionnaire (SAQ) put on your customers and help them streamline this process. It's something that payments companies that go to market with an easy-to-integrate message but minimal customer support won't do.
The Impact of Payments Integration Partnership on Business Growth
The features of the payment platform you integrate with undoubtedly make an impact on the types of transactions your clients can run and how easily they can comply with PCI standards. However, you also need to evaluate your payments partner's practices in addition to its technology to position yourself for growth now and agility and continued relevance in the future.
Vet payment companies on their ability to deliver:
Excellent Customer Experience, Service, and Support
Although your plan may be to count on your payments integration partner to provide customer service related to payments and stay in your lane with support for your software, your clients probably won't see it that way. They'll associate how well the total solution works with your brand.
With this in mind, choose a payment processing integration partner with an in-house customer success team and processes that make it easy to reach a human for assistance when necessary. A knowledgeable customer success team will contribute to greater customer satisfaction, longer customer relationships and higher customer lifetime value (CLTV) - for you and your payments partner.
Also, research the payments company's merchant onboarding process. A long, complex onboarding process will get a business relationship off on the wrong foot and may even have new customers rethink the arrangement. Walk through the onboarding process to ensure a friction-free experience before making a final decision about a partnership.
Take this part of your vetting process seriously. A 2023 Strawhecker Group survey of Retail Solution Provider Association (RSPA) members found the three biggest challenges software developers face with payment partnerships are merchant onboarding, servicing customers, and preventing merchant attrition.
Payments Integration With Less Pain
Payment companies committed to their software developer partners' success will provide APIs and SDKs to streamline payment processing integration. Using code in the SDK for the APIs the company offers, you can focus on UI and testing, getting your solution to market more quickly. Also, research the development support the payments company offers to help you include payments securely as you innovate to add new features or solutions.
Partnership that Helps Grow Your Business
Payments companies that value your partnership will offer ways to help you monetize payments, leading to business growth for you and your partner. Research opportunities for recurring revenue and financial incentives, such as capital infusions that you can use to cover development costs, marketing campaigns, or portfolio conversions to build your client base.
A payments integration partner committed to your success will also offer sales enablement services, work with you to understand your market's payment needs, and participate in joint marketing campaigns.
Let Payments Vault You Forward, Not Hold You Back
Integrating with a payments platform like Stripe may seem like a good way to allow your users to accept payments. However, you need to take the long view. Your team may have an ambitious roadmap to ensure that your software stays on the leading edge with the functionality your users need. But if the payments solution you've integrated with doesn't back up its technology with service and support, you may lose relevance in your market.
Take a customer-centric approach to payments integration by choosing a partner with an excellent track record of providing payments solutions, service, and support to the markets you serve. Also give your business the advantage of working with a partner who offers competitive payment processing fees, support for cash discount and surcharge options, and a multilayered approach to security and PCI compliance. You will also benefit from a partner who prioritizes development support, sales enablement, and co-marketing opportunities to help you grow your business and stay relevant in your market.
For more information download our ebook The (Not So) Secret Ingredients of Successful Integrated Payments or contact us.