Working with a Payment Gateway

A payment gateway is a system that merchants use to accept credit and debit payments. The gateway creates a juncture between two important channels where money travels—one end of the gateway is the merchant, while the consumer’s bank awaits on the other side. The various elements that comprise a gateway are there to ensure the transaction’s security.

At CSG Forte, we develop payment processing platforms that operate as a robust gateway. Our custom payment processing solutions protect businesses across multiple industries while facilitating efficient transactions.

Payment Processors vs. Payment Gateways

A payment gateway exists in front of a payment processor, which is a financial institution or system that accepts the payments customers submit to your business. Your business’s payment processor may be a part of its merchant account, or you can outsource payment processing.

Financial information travels through the payment gateway before it reaches the payment processor. The gateway verifies and encrypts the information before it travels to your merchant account. It will deny fraudulent or invalid payment information. Payment gateways are especially important when processing e-commerce transactions because they offer powerful identification and verification capabilities.

Key Components of a Payment Gateway

A payment gateway should include these functionalities:

  • Payment data authentication: The gateway analyzes incoming data to verify its legitimacy.
  • Encryption: The gateway encrypts the customer’s payment information for processing.
  • Payment processor integration: The gateway allows the seamless transfer of encrypted financial data to the payment processor.
  • Financial settlement: The gateway also delivers encrypted data to the business’s bank for settlement.

Developing a payment gateway is a complex process. It must integrate numerous capabilities and security measures, including the following.

Infrastructure Development

The gateway’s infrastructure lays the groundwork for its immediate functionality and its longevity. The infrastructure begins with a server, which must be capable of withstanding your business’s traffic. Choosing a third-party gateway server can help you meet current needs and scale as traffic changes.

Data Security Measures

Your gateway must contain robust security measures, beginning with encryption protocols. Encryption is the process of converting financial data into a unique code that only devices on your server are authorized to decipher.

Tokenization is another form of data security. Under tokenization, the security system replaces each piece of financial data—such as a credit card number—with a discrete, secure token. Your gateway’s security system will be able to convert each token back into its original format.

Payment gateways also include fraud detection measures to protect your customers and reduce the risk of your business losing money to chargebacks. Your gateway will analyze data and user behavior to detect fraudulent purchases.

All gateway data security measures must meet Payment Card Industry Data Security Standards (PCI DSS) standards.

Integration With a Payment Processor

Your gateway must integrate with your current payment processor—or you must choose a processor compatible with your gateway. After selecting a processor, you can integrate it with your gateway by obtaining the processor’s Application Programming Interface (API) key. Your gateway will also need a separate API key that catalyzes the transfer of customer data.

Compliance and Regulatory Considerations

As you integrate payment gateways, it’s important to remain aware of certain regulatory considerations. Follow global, national and regional laws along with PCI DSS standards.

PCI DSS establishes 12 security standards for merchants to follow when collecting credit card or debit card information. Compliance requires diligence and constant effort, as it is ongoing and varies with your business’s size. PCI DSS compliance is key when reducing risks derived from cyber threats that can impact your company’s financials and reputation.

The following steps are part of PCI DSS requirements:

  1. Use and maintain a firewall
  2. Protect stored cardholder data
  3. Update default passwords and security measures
  4. Use and update antivirus software
  5. Encrypt cardholder data when transmitting it
  6. Keep data on a need-to-use basis
  7. Develop and implement security processes and systems
  8. Routinely check security systems
  9. Create and maintain an information security policy
  10. Implement user IDs for everyone with computer access
  11. Monitor and restrict access to cardholder data
  12. Track who accesses cardholder data and networks

References to PCI DSS are included as a general guide. Complying with PCI DSS would require due diligence and analysis about your scope and specific requirements. Find additional information here.

The Benefits of Using a Payment Gateway

A payment gateway can offer numerous advantages for your business, especially when you partner with an experienced developer. Core advantages include:

  • Improved user experience: Payment gateways provide security alongside seamless payments. Consumers will appreciate the ease of using your online store and peace of mind knowing their data is safe.
  • Bolstered security: A payment gateway offers the strong security that comes with fraud detection and data encryption or tokenization. Your customers’ data will remain secure, and your business will mitigate chargebacks.
  • Expedited payment processing: Payment gateways automate processes for peak efficiency. Customers will enjoy faster checkouts while your business receives its revenue sooner.
  • Enhanced scalability: Implementing a payment gateway will back your business with the security infrastructure it needs to expand into new territories domestically and abroad.

CSG Forte’s Payment Gateway Solution

At CSG Forte, we offer a versatile payment system that facilitates the efficient, secure transfer of financial data from your customer to your merchant account. Our system features a payment gateway with the full range of features your business needs to maximize data security. It offers:

  • Robust security protocols
  • Seamless integration with leading payment processors
  • Compliance assurance
  • User-friendly dashboard and reporting

Why Choose CSG Forte Over Building Your Own Payment Gateway?

Our experience and diligence set us apart as a reliable source of payment gateway solutions. We distinguish ourselves through our:

  • Time and resource efficiency
  • Proven track record and expertise
  • Ongoing support and maintenance
  • Competitive pricing models

At CSG Forte, we have a broad range of experience tailoring payment gateways to businesses’ unique needs. We can develop a gateway that integrates with your processes and facilitates a smooth customer experience. Feel free to contact us online for more on our payment gateway solutions.

Transact With Customers Using Email Payments

When you want to grow your business and streamline operations, eliminating barriers in the payment experience is key. That means opening new and convenient avenues for payment. Email payments are an option that makes purchases easy for customers while relieving your team of the labor-intensive admin of manual invoicing.

What Is an Email Payment Link?

An email payment link is a clickable button or text-based link embedded in an email you send to customers. The link directs your customers to a secure payment page or portal hosted by a trusted payment service provider (PSP).

A payment email typically contains order details or an invoice, a personalized message and a link to make the payment. Once the user opens the payment link and navigates to the secure page, they can pay using their preferred method.

Sending email payment links is ideal if you want to accept payments from anywhere, even when you don’t have a point-of-sale device on hand.

Can Your Business Benefit From Payment Notifications Through Email?

Any business can benefit from invoicing customers using email payment links—including small businesses. Email links are especially convenient for e-commerce stores and wholesalers that accept frequent B2B payments. Email is often the preferred method of communication between businesses, so leveraging this platform is ideal for prompt payment.

Other businesses that can benefit from leveraging email technology to request payments include:

  • Legal offices
  • Restaurants
  • Taxi services
  • Gyms
  • Hairdressers
  • Salons

You can set expiration dates and hold funds for a future date, so email links are suitable for reservations. You don’t even need a website to offer payment via email, making it a truly accessible option for any business.

What Are the Advantages of the Email Payment Method?

Sending links to personalized payment pages via email is beneficial for multiple reasons:

  • Optimizing workflow: Email payments remove manual processes and errors by instantly generating and sending customer invoices. You can request payment rapidly and focus your energy on other aspects of business.
  • Improving customer experience (CX): Email payment links enhance CX through customized messaging and ease of use. Customers also appreciate having multiple payment options from their preferred device. Your customers can access links via their PC or smartphone, navigate to the secure page, and choose whether to pay by credit card, bank transfer or digital wallet.
  • Building trust and loyalty: By staying up to date with the latest technologies, enhancing payment security features and offering clients the gift of choice, you can build customer loyalty and trust.
  • Customizing payment journeys: With email links, you can quickly deploy personalized and branded payment journeys for recurring, future-dated or one-time payments. You can leverage your payments platform to send custom invoices with confirmations, late notifications and payment reminders directly to your customers’ inboxes.
  • Reducing operational costs: With email payment links, you don’t need point of sale (POS) systems—and you don’t need to pay the costs associated with them.
  • Protecting sensitive data: By using a secure payment platform, like CSG Forte Engage, you are safeguarding customer data and protecting against data leaks.
  • Supporting multiple methods: Your business is not restricted to a specific payment method. Email payment links support credit and debit cards, ACH payments and digital wallets like Google Pay and Apple Pay.
  • Increasing conversion rates: Email links make paying simple for customers. That convenience translates to a boost in conversion rates, overall revenue and customer satisfaction.

Choosing a Trusted Payment Email Provider

Many payment service providers (PSPs) offer payment link services enabling you to request payment via email, text or social media. Not all service providers are equal in the level of service, security and personalization they offer your business. You need a partner that comes alongside you to enhance your customer payment experience and increase on-time payments.

Here are a few questions to keep in mind to ensure you select a trusted provider:

  • Can you support multiple payment methods?
  • Can you use the payment link feature even if you don’t have a website?
  • Can you customize your payment landing page with your branding and colors?
  • Can you manually capture and adjust payments at a future date?
  • Is the PSP Payment Card Industry (PCI) compliant?
  • Is the PSP team willing to help you and answer questions?

Leverage the Benefits of Email Payments With CSG Forte

CSG Forte is a trusted partner with decades of experience. You and your customers can benefit from frictionless payment processes through our CSG Forte Engage solution.

Our platform supports customized, secure, flexible payments through multiple channels, so you can give customers a first-rate experience.

Streamline your payment processes by connecting with our team today.

A Guide to Avoiding Payment Reversals

Payment reversals challenge organizations of all sizes. Many companies even allocate a monthly budget to payment reversals. They may be a frustrating part of your own business—and depending on your organization’s services or products, you may have a higher likelihood of experiencing payment reversals.

The good news is that avoiding payment reversals is possible. This guide explores all aspects of payment reversal and solutions your organization can implement to minimize your risk.

What Is a Payment Reversal and Why Does It Happen?

While a payment reversal can happen for a few reasons, the direct cause is the initiation of a request by a cardholder, issuing bank, acquiring bank, merchant or card network. A payment reversal on a credit card is not uncommon. Some reasons why payment reversal happens include:

  • Unmet expectations: If consumers feel your product or service doesn’t match what they paid for or expected based on the description, they can submit a payment reversal.
  • Customer-initiated issues: Consumers may change their minds after purchase and no longer want to leverage your products or services.
  • Fraudulent reasons: A consumer may reverse a payment in an attempt to make a fraudulent transaction.
  • Incorrect charges: A payment reversal may occur as a response to the wrong amount of money being taken from the cardholder’s account.
  • Missing information or duplicate transactions: Many fields are involved in payments. If information is missing or incorrect, you may need to reverse charges. Reversals may also be necessary in the event of duplicate transactions.
  • Stock issues: If you are in e-commerce, items may sell out before they are delivered—so the consumer may need a refund for the unavailable products.

All payment reversals should be a concern for your organization and an opportunity to explore ways to optimize your processes. Payment reversals may indicate:

  • Operational failings
  • Product or service issues
  • Inadequate safeguarding against fraud

Payment reversals go beyond the financial implications of your organization needing to return funds and pay associated fees. Depending on the reasons for reversal, your business could face reputational harm and lose customer loyalty.

Types of Payment Reversals

Three main payment reversals exist—authorization reversal, refund reversal and chargeback reversal.

1. Authorization Reversal

Authorization reversal is reversing a payment before it has been fully completed. The automated clearing house (ACH) network is often limited and slow, so pre-authorized transactions are conventional. Pre-authorized funds may take days or weeks to transfer from the customer’s account to your bank account. This delay occurs because the customer’s bank needs to authorize the transaction and specify the funds for the payment. The wait provides a window of opportunity to stop a transaction before money leaves the bank account.

Authorization reversals can happen in various scenarios, including a merchant spotting a mistake in the amount keyed in or the consumer wanting to change cards or payment methods. Depending on the payment software you use, there is usually a way to stop the transaction from happening. The stop communicates to the issuing bank to reverse the authorized transaction.

In other instances, you may require the customer to pay a pre-authorized amount before they use or consume a product or service. For example, a hotel may ask for a deposit on a room before accepting a reservation. This pre-authorized payment is also known as a security payment. If the consumer does not spend the authorized amount, you must fully or partially refund them.

Remember that the longer the authorization takes, the more complex the reversal becomes. As the transaction clears through the payment process from the issuing bank to the card network and the acquiring bank, reversal fees become more expensive and complicated. Ideally, you want the funds to stay in the customer’s account when processing reversals so you can avoid interchange fees.

Rapid authorization reversals are cost-effective and fast. Reversals can happen before consumers even know, making this approach the most convenient and customer-centric way to cancel payments. Quick reversals also mean you won’t have to account for the arrival of a payment and return of funds on your balance sheet—something that’s particularly helpful when you process high volumes of transactions for your business.

2. Refund Reversal

Refund reversals are for payments where transactions have already been completed. Refunds often occur because consumers are unsatisfied with a product or service. If the opportunity has passed for an authorization reversal, a refund reversal is your next best option as an organization.

Instead of canceling a transaction, you pay the transaction in reverse. The acquiring bank is now paying the consumer or cardholder in a separate transaction. That means a refund is not a neutral agreement. You will have to pay transaction fees and lose the sale for services rendered or products sold. Still, a refund is preferable over a customer contacting their bank to get their money back.

3. Chargeback Reversal

Chargeback reversals are the worst-case scenario for your business. These reversals involve a customer contacting their bank to file a dispute against the transaction. A consumer may file a dispute if they believe fraud has occurred or if they never received an item or service they paid for.

Chargebacks are more than an inconvenience for your business. These reversals can incur additional chargeback fees and penalties from card networks.

You can dispute chargeback requests if you provide evidence that the consumer is wrong. A dispute can take weeks or months and cause a substantial administrative burden for your team. Even if you win the dispute, your organization may be flagged by card networks if you receive high rates of chargebacks, leading to stricter security thresholds.

When a chargeback reversal occurs, your organization can face a range of challenges:

  • Paying for shipping fees if you’re selling products or goods
  • Recovering or forfeiting items sold or services rendered
  • Submitting a claim and disputing the chargeback reversal

Chargeback reversal can also leave you with revenue loss and transaction fees associated with fraudulent payments. Excessive chargeback reversals may lead to reputational damage and card networks suspending your ability to transact.

The best way to combat chargeback reversals is to identify fraudulent transactions proactively. Internal system checks will help you reduce the number of chargebacks and help you easily distinguish between legitimate and unauthorized transactions.

How to Minimize Payment Reversals

Your organization will face payment reversals from time to time. You can and should take steps to minimize refunds and optimize your processes to mitigate the risks when they do happen. Some ways you can prevent payment reversals include:

  • Making payments secure: Use additional payment security measures like two-step authentication and tokenization to reduce the risk of fraudulent transactions.
  • Being vigilant: Authorization reversals are often due to human error, like a staff member typing in the incorrect amount. Encourage your employees to be attentive while processing payments, explaining the cost and implications of reversals, refunds and disputes.
  • Leveraging automation and technology: Implement an innovative payment processing platform that manages all your payments in one easy, user-friendly interface. CSG Forte verifies transactions, helps you make payments secure, and streamlines recurring and ad hoc payments. The cloud-based platform will support your employees, minimize admin and help you provide first-rate payment experiences for customers.

Frequently Asked Questions

Here are answers to a few common questions to help you gain a deeper understanding of payment reversals.

What Are the Differences Between a Reversal and a Refund?

An essential difference between reversals and refunds is what happens to the funds. During the former, payment reverses, meaning the bank or payment processor cancels the transaction—the funds aren’t transferred from the customer’s account into your account. A refund means that after a transaction is completed, you need to refund the amount and pay it back to the consumer, incurring transaction interchange fees.

What Is an Example of a Reversal Transaction?

In the context of e-commerce, one example of a reversal transaction is a consumer wanting to purchase running shoes online. The consumer attempts to buy running shoes and, during the transaction, receives notice that the shoes are no longer available in the correct size. While the payment is pending, the consumer cancels the transaction. No funds are transferred from the cardholder’s account to yours, meaning no fees are incurred during reversal.

What Happens After a Purchase Refund?

After a purchase refund, the business returns funds to the consumer’s bank account. It is an entirely separate transaction from the original payment. The amount is the same, but the business must pay transactional and processing fees, and standard settlement time applies.

Why Would a Company Reverse a Payment?

A company might reverse payment if:

  • A customer is trying to commit a fraudulent transaction
  • An item or product is sold out before delivery can occur
  • A consumer changes their mind after ordering a product

Verify Payments With CSG Forte

Scale your business and provide frictionless customer payment experiences with CSG Forte’s award-winning payment solutions.

One of the add-on services that organizations leverage to verify payments is Validate. With Validate or Validate+, your organization can process ACH payments with confidence. Both solutions use an innovative ACH database with millions of records, ensuring funds are in good standing. Validate provides:

  • Updated data sources
  • Instant, actionable responses on each transaction
  • Extensive routing and bank account (DDA) validation over multiple data sources
  • 100% real-time reporting for invalid checksums and transaction routing numbers

With Validate, your organization can proactively minimize and simplify payment reversals to save money and provide customers with seamless payment experiences.

Streamline and Verify Your Payments With CSG Forte

CSG Forte has over two decades of experience delivering innovative end-to-end payment solutions for over 81,000 merchants. We will help you optimize revenue and streamline payment processes with quick, easy integrations.

Contact us to learn more.

Explore the Value of ACH Payments Between Businesses

ACH payments are a modern and secure method for processing fund transfers. Explore the value of this payment type for transactions between businesses.

 

What Are Business to Business ACH Payments?

Business to business ACH payments are electronic fund transfers between two companies. These electronic transfers occur in the Automated Clearing House (ACH) network and eliminate the need for paper trails that come with checks, money orders and other conventional payment methods.

ACH is a widely used electronic payment system in the United States and internationally. With this network so widely recognized, it can be an ideal solution for business to business payments between companies that are located in different states or countries.

Business to business transactions encompass a wide range of corporate processes, from paying advertisers and shipping companies to covering rent for office spaces. While many individuals have stopped using checks for their day-to-day payments, many businesses are still relying on these slips of paper to make large payments to other businesses. With corporate ACH payments, businesses can streamline a significant aspect of operations.

 

How Does Business to Business ACH Work?

All ACH payments start with two bank accounts—the Originating Depository Financial Institute (ODFI) and the Receiving Depository Financial Institute (RDFI). Essentially, there’s a bank account requesting a payment, the RDFI, and an account sending money to respond to the request, the ODFI.

In B2B ACH payments, this arrangement stays the same. However, rather than a corporate bank account and a consumer bank account, the transaction happens between two corporate accounts. The Clearing House or the Federal Reserve oversees the transaction by storing and processing the funds. Since these transactions are not direct from bank to bank, they can take one to two days to process.

The entire ACH process can be divided into four steps:

  • Authorization: Before funds can move from one account to another, the ODFI needs authorization from the owner of the account to transfer funds through ACH. During authorization, the business will have to provide the account and routing numbers for the corporate account and other details to verify the use of their funds. As a business requesting this authorization, you may send an email with a link to the accounting department, so they can complete the authorization process.
  • Initiation: The business then sends its information to the ACH provider or ODFI to initiate the transaction.
  • Request: After initiating the transaction, the ODFI can send a payment request to the RDFI to receive the necessary funds for a product or service.
  • Processing: As long as all information is correct and the RDFI account has enough funds to complete the request, processing can begin. The funds move from the RDFI account to the ODFI, and the business receiving funds will officially be paid for their product or service.

 

Benefits of B2B ACH Payments

Using ACH payments for your B2B transactions has many advantages, including:

  • Simplicity: ACH payments are easy to set up with the right ACH provider. Both companies involved only need to provide account information for their corporate bank accounts and work with a provider who supports the process. Most banks allow the ACH process to occur with authorization, so there’s no need to have a special account or change the way you manage financials for your business.
  • Speed: While there is a processing window for ACH payments, it is typically only a few days maximum. Even with this processing time, businesses will receive confirmation that funds are entering their account before they officially arrive. This aspect makes business to business ACH debit much easier than checks. Accounting teams don’t need to reconcile the bank account with several outstanding checks that have not yet been cashed.
  • Security: With many businesses still relying on checks for B2B payments, check fraud is a possibility. Businesses are particularly at risk because they send multiple checks with large amounts. ACH payments are completely electronic and verified through your ACH platform, so you know you’re genuinely receiving money from your client businesses, and information like account and routing numbers is kept private.
  • No processing fees: ACH payments are free of all processing fees, which is a major benefit to businesses that transfer money frequently between suppliers, clients and beyond. With so many transactions, small fees can add up and lead to large costs at the end of a month.
  • Low transaction fees: Transaction fees for ACH payments are often free or low in cost, depending on the financial institutions involved. Compared to wire transfers or credit card processing, these fees are incredibly cost-effective.
  • Electronic records: ACH payments have a clear electronic record you can access at any time, so it’s easy to manage invoicing processes, and you can cut down on paper records.

 

Implement ACH Processing With CSG Forte

CSG Forte’s Dex payments platform is the key to implementing ACH processing for your B2B transactions. Manage online, in-person and over the phone payments with a unified, cloud-based solution. With transparent reporting, you can stay connected to every transaction and manage your funds more efficiently.

Get in touch with us today to learn more or make an account with us to get started.

Process Fast, Secure Payments Using Merchant Service Providers

Are you opening a retail store in a brick-and-mortar establishment? Creating an online storefront? Customers who visit you in person or online will likely pay electronically via a debit card, credit card contactless pay or mobile device. How can your retail store capture this cardholder data and turn it into a quick and secure payment?

Merchant service providers can help you manage payment card transactions and accept multiple payment methods. They offer the products and systems your business needs to streamline card payment processing. As a result, you’ll increase your revenue, strengthen customer loyalty and grow your business.

 

What Are Merchant Services? 

Merchants need reliable services and equipment to accept and process customer payments through credit cards, debit cards and other electronic payment methods. Merchant services operate through a merchant account that the merchant sets up and may be able to integrate with their existing software.

These tools are essential because they help you accept and process payments in a way that benefits both you and your customers. Customer payments help you grow your business, so merchant services are critical for capturing more customers and income.

What Merchant Services and Products Does Your Business Need?

Some examples of merchant services and products include:

  • Payment gateways: Payment gateway software works with the merchant’s website or e-commerce store to take and process online card payments. The payment gateway functions as a digital credit card terminal.
  • Virtual terminals: Virtual terminals are software applications merchants can use to accept card payments when the physical card is not present.
  • Credit card terminals: Credit card terminals (or electronic data capture terminals) allow merchants to accept in-person card payments. The customer can swipe, insert or tap their card to pay.
  • E-commerce platforms and services: E-commerce software sets up and operates online stores so customers can buy products online. E-commerce merchant services support payment card transactions in the online store.
  • Point-of-sale systems: The point-of-sale (POS) system is the equipment that takes customer payments for a merchant’s products or services. POS transactions occur when the customer pays in a physical store.
  • Mobile payments: Mobile payments allow customers to pay for a product or service via portable electronic devices like tablets and cell phones. This service also includes sending money to individuals through applications like PayPal and Venmo.
  • Contactless payments: Contactless payments use near-field communication or radio-frequency identification to make secure transactions. Payment options include Apple Pay, Google Pay, Fitbit Pay, Android Pay, credit and debit cards, and similar devices.
  • Business management software and applications: Business management tools manage orders, inventory, customers, employees and other business aspects.

 

What Is a Merchant Service Provider?

A merchant service provider is the third party serving as the go-between for your business, your customers’ payment card providers and your customers by offering different types of merchant products. Each merchant service provider offers specific equipment and services for electronic transactions. Examples of merchant service providers include:

Merchant service providers have three primary purposes:

  • Manage and process card payments
  • Secure cardholder data
  • Provide the technology and tools to collect card payments 

Some merchant service providers offer more services to improve transactions, such as managing gift cards and loyalty programs and supporting business operations through inventory management and report generation.

Payment Processing

The main purpose of a merchant service provider is to manage cardholder data and process payments. They will:

  • Gather payment card and transaction information
  • Receive authorization or denial to complete the transaction
  • Collect the funds from the bank or institution that issued the payment card
  • Send you the money after charging the interchange fee and other fees

Payment Security

Payment security from a merchant service provider protects the data from credit card transactions, online payments and cardholder data storage. As a result, your customers and business can make safe and secure transactions.

Merchant service providers also assist your company in complying with the standards and regulations of the payment card industry (PCI). Compliance ensures your cardholder data stays secure through proactive security measures to prevent lost data. Payment security can include methods like tokenization and encryption.

Technology Provider

Accepting card payments requires the right technology, and merchant service providers can provide it through their products and services. As the technology provider, your merchant service provider also gathers and reports data about your business’s card payments. You’ll learn valuable information, such as:

  • Which customers you get the most revenue from
  • The most popular times of the day, month and year for transactions
  • Underperforming products and services that could be improved or removed

Every merchant service provider is different regarding the technology they offer and the fees they charge for the equipment and processing transactions.

 

Reasons To Have a Merchant Service Provider

With a merchant service provider, you can accept card payments while maintaining security standards to protect your business and your customers’ sensitive data. From the point of sale onward, your merchant service provider will manage the transaction data to ensure the process is smooth and secure and that you receive your payment quickly. You can trust them to process your payments while you focus on running and growing your business.

Merchant service providers offer several advantages to merchants. These companies:

 

What Is a Merchant Account?

A merchant account is a specialized bank account that helps businesses process electronic payments. Unlike a standard bank account, this account is strictly used for the business purpose of making and accepting payments. The merchant account holds funds before they are cleared to transfer to your business’s primary bank account. With a merchant account and payment gateway, you can accept card transactions from customers.

How Can a Merchant Account Benefit Your Small Business?

A merchant account provider can set your company up with everything you need to get started. This account establishes a business relationship between your company and the merchant service provider, which offers several benefits for small businesses. With a merchant account, your company can:

  • Accept card payments, simplifying the buying process and attracting new customers
  • Increase sales—and business growth—by allowing more transaction types
  • Make purchasing convenient for customers by enabling them to pay their preferred way
  • Improve cash flow forecasting and management
  • Avoid the risks associated with other payment methods, like bounced checks
  • Set up recurring payments for regular services

In addition to card transaction processing, merchant account providers offer several other services, such as technology integrations and business services. To maintain a merchant account, your business may have to pay a fee to cover the transaction costs from payment processors, the issuing bank and the credit card association.

 

Fees and Costs Associated with Merchant Services and Providers

Like many other business services, using merchant services to accept card payments comes with some fees. It’s critical to understand what these fees are for to ensure these services are helping your business instead of draining your revenue.

Merchant service fees can be structured as a per-transaction rate or a monthly or annual service fee. The service provider charges fees for card payments because the issuing and acquiring banks take on the financial liability of the transaction. If the customer is late with their credit card bill—or doesn’t ever pay—the issuing bank will be out of that payment. Banks typically assume the burden for fraudulent transactions.

The fees you will be charged depend on factors like:

  • The type of business you have according to the merchant category code
  • Your company’s credit rating and history
  • Whether the card was present (for retail in person) or not present (e.g., over the phone, internet or mail order)
  • How risky your business is
  • Card swipes versus key-entered card numbers

Pricing Models

The most common pricing models merchant service providers charge are:

  • Flat rate: With a flat-rate fee, the merchant service provider charges a fixed fee for all card transactions, regardless of the card used. This rate can be structured as a base rate or a base rate with a per-transaction fee.
  • Tiered rate: Tiered processors charge a fee based on the card type, the risk the transaction carries and the transaction volume for your business.
  • Direct interchange pricing: With a direct interchange fee, the merchant service provider charges a monthly fee not based on a percentage.
  • Interchange-plus pricing: In the most common pricing model, you, the merchant, are charged the interchange rate when a customer uses a payment card. This rate is calculated as a percentage of the transaction amount. You will also pay a fixed per-transaction fee.

Each of these pricing models has its caveats, such as:

  • Inconvenient for small businesses: Direct interchange fees and tiered rates are challenging for small- and medium-sized businesses (SMBs) with low sales volumes (whereas a flat rate system is ideal)
  • Cut taken from sales: The interchange plus rate varies by the credit card issuer, and the processor takes a portion of each sale.
  • Not ideal for business-to-customer transactions: Since tiered rates fluctuate, they may not be suitable for business-to-customer transaction processing.

Other Fees

Some other fees a merchant service provider may charge include:

  • Account setup fees
  • Minimum processing fees
  • Early termination fees
  • Nonsufficient funds fees (NSF)
  • Chargeback fees
  • Account fees
  • Statement fees
  • Cancellation fees

 

What To Consider When Choosing a Merchant Service Provider

Your transaction revenue supports your business, so you need a merchant service provider to help you grow your company. Asking these questions will help you select the right one:

  • Do their offerings match my business needs? Since each merchant service provider has different offerings, choose one that best aligns with your business needs and goals, now and in the future.
  • Which payment options do they support? Offering a variety of payment options improves the customer experience. See whether the merchant service provider supports payment processing solutions like mobile payments, contactless payments and ACH.
  • What fees and costs do they charge? Ask the merchant service provider about their pricing model to decide whether your budget is compatible. Understanding what your company pays for merchant services will help you partner with a cost-effective provider.
  • What customer support do they offer? Technical difficulties are likely to happen at some point. A knowledgeable customer support team helps you troubleshoot them as quickly as possible. Identify the level of support included in the contract and whether you will need to pay additional support costs.
  • What protection do they provide? Your business should be protected from payment security issues like credit card fraud. Ask the merchant provider if their systems support PCI compliance and what insurance they offer to cover security issues.
  • Do they have other services? Some providers offer additional services like loyalty programs, employee management solutions and cash advances. Find out whether your merchant service provider offers these services, and consider whether they will benefit your business now or in the future.

 

Choose CSG Forte as Your Merchant Service Provider

Now that you know what to look for in a merchant service provider, look no further for the ideal one—CSG Forte. For over 20 years, we’ve been offering industry-leading payment solutions that can help you accept payments quickly and grow your business.

We partner with several software providers to enable secure and quick payment processing for all merchants. Our solutions scale with your company to meet your changing needs while simplifying the payment process. With our payments platform, you’ll do more than just accept card transactions and ACH payments. You’ll manage every facet of these transactions with ease, from reconciling funds to running reports.

Sign up today to get comprehensive, reliable merchant services for your business. Want to learn more about what CSG Forte can do for you? Explore our merchant resources.

4 Reasons You Need a Scalable Payment Platform

Payment platforms are often rigorously designed for a number of factors, including security, speed, reliability, and more – but one of the most integral factors for any payment platform isn’t what you may think – it’s scalability.

 

What is a Scalable Payment Platform?

What makes a platform scalable is its ability to handle oncoming work that grows and develops. Similar to flexibility, scalability allows users from either end of the platform to transform and change their businesses with the knowledge that the platform will react accordingly, adjusting quickly to maneuver new challenges.

A platform that is not scalable, on the other hand, will suffer. Static platforms fizzle and die, unable to keep up with the growing trends and industry challenges. Look, for example, at the mobile payments industry. The highly scalable applications like Starbucks find themselves responding quickly and adeptly to consumer wants and needs. Mobile pre-ordering, built-in rewards, music applications, and payments are all part of that ever-changing platform – and it doesn’t seem likely that Starbucks will stop anytime soon.

On the other hand, a great number of other mobile applications lay in waste. Unable to accommodate user demands and requests, these platforms failed to drive forward. As a result, they lost users and sales. The platform dies.

Payments platforms, in particular, are specifically sensitive to scalability because of the nature of the payments industry. With ever-expanding challenges and disruptions, platform creators are now required to do more than troubleshoot. They are almost asked to intuit the new big wave, creating solutions before problems occur.

But such is the life for any tech industry, including fin tech.

 

Why Your Business Needs a Scalable Payment Platform

Payment platforms that cannot scale risk losing users on either side of the platform. Here’s why merchants and other users should consider scalability on their list when shopping for a payment platform.

Plan for business to grow

As a merchant, your aim is for business to grow, not shrink. Your payment platform should be able to adjust with you. As you increase volume, you should be able to easily move into higher processing levels without much issue. Be sure that your processor can accommodate changes in volume and speak to them about potential contract savings, as well. Many processors offer discounts the more you process.

Expect high functionality

The platform should not be disrupted no matter how little or how much you are processing. You should still be able to perform all of the functions you need regardless of your business size. There’s no reason any of the features you’ve been using at one level cannot translate to another.

Lower risk when business changes

Scalable platforms are more than just flexible. Because they can adapt, if you need to make changes because of a hardship or short-term change, a scalable system is going to help you adjust through this time period. In lieu of terminating contracts or being forced to switch processors, which is a lengthy and arduous process, a scalable platform will allow you to tighten the reins momentarily without much cost.

Increased opportunity for newer features

Scalable platforms are usually more likely to receive system updates and changes as trends come, which increases your opportunity to test out newer features as they are making waves. Static platforms are less inclined to update frequently and most likely will not adopt newer technologies. If you’re interested in the new and shiny, a scalable solution gives you a better opportunity, and it’s much easier to test out than transferring everything to an all-new system or processor.

 

Choose CSG Forte For Scalable Payment Solutions

Scalability is one of the most important features for payment platforms, landing high on the list for merchant shoppers. CSG Forte offers a scalable platform that adapts to changing business and takes both cards and eChecks. For more information, visit www.forte.net or call 866.290.5400.