Organisations want to make it easy for their customers to pay them…
…with debit card payments being the single most used payment method by consumers, businesses need to have the facility to accept payment by debit or credit card from their customers.
In many instances, organisations that have signed up to these so-called Merchant Services will default to the payment processor or gateway that comes with the card acquirer as it is convenient, and because many people do not fully understand the difference between gateways and acquirers because they do not entirely understand how the payment process works.
Taking time to look at the differences is worthwhile, as there are many benefits to separating your acquirer and processor. Independent processors focus solely on providing a great processing service helping organisations be more secure and offer the paying consumer more choice. It also makes it much easier for merchants to move between acquirers, ensuring they are getting competitive rates.
So what is a Merchant Acquirer?
A Merchant Acquirer is usually a bank or financial institution that works in conjunction with a card issuing scheme, such as Visa or Mastercard, in order to enable merchants to accept debit and credit card payments.
After the acquirer has received transaction information from a payment processor, and checked with the relevant card issuer that the transaction can be authorised, the acquirer will settle funds into the merchants chosen bank account, usually after a few days.
An acquirer takes the financial risk of the card transaction, as they deal with any disputes and chargebacks that may occur.
What is a Payment Processor?
A Payment Processor … processes payments! Typically these are technology companies and there secure software service is authorised by Merchant Acquirers to facilitate the payment process.
Payment Processors, which include Payment Gateway services, do a number of things such as help authorise transactions, check for fraud, stipulate whether payments are processed using digital wallet systems like ApplePay or GooglePay and assist in the 3D Secure v2 authentication process.
They do not take any financial liability for the provision of card services to a merchant, as this lies solely with the merchant acquirer.
Some financial institutions can be the payment processor and the merchant acquirer, either because they have an internal engineering team that has developed payment processing software, or they have purchased a company that has done so.
Exploring the Advantages of Independent Payment Processors
Abandonment of shopping carts represents a significant challenge many online companies face. The lack of flexible payment choices is a key cause of this occurrence. When a consumer cannot locate his preferred payment option on the checkout page, they often leave your site and purchase on a competitor’s.
Customers prefer websites that provide a wide selection of payment methods in addition to fast and safe transactions. The appropriate payment gateway can improve your customers’ experience and lower the abandonment rate.
Payment processing services tend to cost the same, whether purchase all packaged up by an acquirer or from an independent payment processor. But … when you purchase the services through your acquirer, it makes it difficult to leave. You have you embed a new gateway into your online and physical payment terminals, as well as adapt your reconciliation process.
When your Payment Processor is independent, changing acquirer is pretty straightforward, leaving you much more leverage to ensure you continue to pay competitive rates. Considering acquiring costs are usually a percentage of your overall card revenue, a small change can make a significant different to your net profit.
Partnering with an independent payment processor enables you to obtain services that other processors don’t offer. Improved security options, better reporting, more digital wallet integrations, and often the ability to tokenise cards to set up recurring invoices, are all payment processor functions that become available to you, and no extra cost.
Additionally, independent processors may take several currencies, making it easier to integrate with foreign acquirers and do business with foreign organisations.
Data encryption protects sensitive client data when it is sent through a payment gateway. This information is sent between the bank of the merchant and the customer’s bank. The payment gateway is in charge of making sure data is sent safely.
Further security settings, such as implementing alerts for a particular frequency, volume and value of payments also help notify you of potentially fraudulent activity.
How to start taking advantage of Independent Payment Processors
By using a payment solution such as PayGuard® you can utilise a processor developed specifically for today’s demanding customers. You will be able to provide improved online experiences, seamless customer journeys while saving costs and improving the bottom line of your organisation.
To find out more contact one of our representatives to see how you can create a better payment process for your organisation and save you money…
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