By Cassandra Balentine
As more products and services are offered and purchased online, it is essential that payment processing be seamless and secure. As facilitators of many of these transactions, independent software vendors (ISVs) should consider integrating or partnering with a payment processing vendor to ensure the ideal experience for program users.
Benefits and Arguments for Payment Integration Partner
Integrating payment processing into a software application allows for a more seamless experience for ISVs’ customers, as they are most likely running payments parallel to the ISVs current solution.
Justin Passalaqua, head of sales, North America, Bambora, points out that transaction data can automatically flow into a business’ accounting or ERP system after sale. “It does away with the need to manually enter payment transaction data and reconcile accounts, saving valuable time, reducing labor costs, and eliminating the possibility of human error. Integrated payments also allow the data for each sale to seamlessly post into the accounting software, similar to how the money from a transaction is deposited directly into a business bank account.”
There are many benefits of integrating payment processing into a software application through a partnership. Alex Roy, director of business development, AddPaymentsNow, lists several, including new revenue opportunity, reduced or eliminated risk, increased client retention for ISVs, no set up cost to the software provider, fast and easy setup, streamlined on boarding of clients, white label options, tested APIs to make for simple integration, and better visibility and control over the experience.
“ISVs need to consider how easy it will be to integrate payments by renewing their developer documentation and the available support,” shares Passalaqua.
Value-added features provided by a payment processing partner should also be a consideration. “As payments are now a commodity, ISVs must evaluate what added features and benefits their payment partner can provide above transactional processing. For subscription-based ISVs, value-added services like card updater and tokenization will help them manage their payments,” adds Passalaqua.
It is important to seek out a payment processing partner with a strong partnership program, including revenue sharing opportunities. “A good partner will have a transparent yet potentially lucrative revenue sharing program that allows the ISV to grow financially with the payment processor,” comments Passalaqua.
Complexity and upfront cost is important for ISVs looking to add a payments feature, according to Roy. “Unlike simple merchant accounts, payment facilitation can have big barriers to entry, such as upfront costs, extensive paperwork, and delays.” Providers that take on most of the responsibilities for the ISV in the beginning and then grow with them are ideal.
ISVs benefit by teaming up with payment integration solutions to reduce the complexity of integrating processing solutions on their own.
Overall, cost, turnaround time, and liability are the biggest benefits of payment integration through a partnership with a provider. “Without an existing payments infrastructure, it could easily cost hundreds of thousands of dollars annually to operate a payment processor. Also, the industry is heavily regulated. Without legal staff and compliance teams familiar with the industry, startups are open to fines and shutdowns,” says Roy.
Passalaqua points out that processing is a complex and high-risk endeavor. “Payment processors must be PCI compliant, ensuring that any organization that processes, stores, or transmits sensitive payment data maintains certain protocols. The details of those standards are frequently adapted based on the latest data breach related activity, and vulnerabilities detected as a result. It is very complex and expensive to maintain these processing standards.”
Good payment processing partners also provide multiple connections to banks and processing connectors. This enables merchants to choose their end processor. “Those connections are complicated to create and support,” shares Passalaqua.
Through a payment processing provider, ISVs are able to offload all of the complex nuances and focus on scaling their own software, he adds.
There are a few types of integrated payment processing, including gateways and processors. Payment gateways function by sitting between ISVs and processors.
Passalaqua says they act as a secure, value-added payment switch that can route transactions to the desired end processor.
Another option ISVs have is integrating directly into the end processor. Passalaqua says it is a more inexpensive connection because there is one less player in the flow of the transaction. The downside is that it locks the ISV into only having one processing option.
“In each scenario, the processing entities may have a range of partnership arrangements. Most will have some revenue share program with the ISVs and potentially the resellers of the software,” notes Passalaqua.
Revenue share programs are typically a percentage of revenue generated from transaction fees, paid back to the ISV partner. In some cases, the payment processing partner establishes a buy rate with the ISV partner, enabling the ISV the opportunity to mark up and create their own sell rate. “This allows the ISV to determine what their revenue share will be instead of relying on a percentage of something,” explains Passalaqua.
On the Market
Several payment processing solutions and partners are available to help ISVs improve payment processing within their applications.
AddPaymentsNow are payment experts that pair software vendors with streamlined, vetted payment facilitator providers that allow them to add the ability to instantly set up clients with the power to accept credit cards through software at no cost to the ISV.
Bambora provides a solution for ISVs to scale their platform and incorporate a new stream of revenue with its revenue share program. The company offers ISVs easy integration with its RESTful APIs and SDKs, as well as a dedicated developer advocate to support ISVs along the way. Bambora underwrites and assumes the risk for the ISV’s customer accounts.
CardConnect, a First Data Company, works with software companies of all sizes to create a streamlined customer experience through integrated payments.
goEmerchant provides online payment gateway integration and developer APIs. The solution utilizes simple and secure REST APIs and tools that instantly enable mobile applications, point of sale software, or online storefront to accept and manage credit card payments and subscription services.
By partnering with Ingenico Group, ISVs and VARs are able to quickly integrate secure, EMV/NFC-ready payment acceptance into their existing software and applications. They’re also able to gain access to the company’s industry and technical knowhow, innovative product roadmap, and skilled payment experts. This partnership enables ISVs and VARs to expand their service offerings, drive new revenue opportunities, and become recognized leaders in the payments arena.
Marqeta offers developer-friendly solutions to meet the ever-evolving demands of the payments market—delivery, lend, distribute, expense, and virtual. Each of these solutions includes a sophisticated set of controls and configurations that are designed to meet the needs of on-demand service companies, alternative lenders, as well as those looking for payouts for 1099 workers, flexible expense management, and scalable, secure virtual card transactions.
PayConex is Bluefin’s payment gateway offering all payment products for U.S. and Canadian processing. PayConex secure payment gateway services are backed by ShieldConexTM suite of security solutions, including PCI-validated point-to-point encryption, tokenization, iFrame encryption, and transparent redirect.
Vantiv helps technology partners earn more revenue and share less residual profit with other parties. Whether an ISV is looking to integrate traditional Card-Present, Card-Not-Present, or a combination of both into the software for merchants, it offers a variety of payment processing solutions.
TYSYS offers an integrated payment processing platform. The company delivers a web-based proprietary payment processing platform for businesses of all sizes and industries. With one integrated system, merchants can accept multiple payment types in real-time wherever and whenever they want, maximizing revenue opportunities. TSYS gateway supports multiple entry points, including virtual terminal, batch, hosted payment page, https post, and web services. Shopping cart integrations can take advantage of robust features and functionality. Merchants can process retail card-present transactions through the virtual terminal or through a custom integration using web services, helping to reduce costs associated with maintaining traditional point of sale hardware or software.
ProPay is a TYSYS company that provides solutions that can enable ISVs to accept payment online without interrupting the shopper’s experience. If the client has an eCommerce website and wants a seamless payment interface that doesn’t redirect to a payment page, ProPay can help.
As more business is conducted online, consumers expect a seamless and trustworthy purchasing experience. Therefore, ISVs need to thoroughly consider the payment experience from the end user perspective. Whether it is a payment gateway or partnership with payment processing provider, integrated payment solutions are essential to modern ecommerce solutions. SW
Aug2018, Software Magazine