What to look for in payment processing software

In 2020, consumers spent a startling $791.70 billion with American merchants online, marking a more than 32% increase compared to ecommerce sales in 2019.

But American ecommerce is only part of the story – Shopify reported that by 2021, global ecommerce sales will surpass $4.9 trillion.

As the amounts spent on online transactions across the globe continue to rise – and as consumers increasingly prefer digital platforms to brick and mortar businesses for their shopping and spending habits – brands that want to capitalize on this trend must be prepared.

There are some key technological capabilities that companies need to enable their online business. One of these elements is payment processing software, a critical piece in companies’ ecommerce infrastructure.

What is payment processing software?

Payment processing software is the solution that enables customers’ payment data to be verified, and the transaction to be authorized. This software represents the bridge between the merchant’s ecommerce website, the customer’s bank or credit card issuer, and the merchant bank.

In some cases, a separate payment gateway or portal will encrypt payment data before it is sent through the payment processor. Some solutions bundle this functionality within a single platform, enabling card data to be encrypted, verified, and transferred.

As G2 contributor Diedre O’Donoghue explained, online payment processing includes a few standard steps to enable a transaction to take place between a merchant and a customer:

1. First, the customer selects the goods or services they want to buy from the merchant website, puts these items in their online shopping cart and finishes the process to check out on the merchant website.
2. Next, the customer inputs their payment method information into the payment gateway, or payment processing software.
3. From there, the payment processing software takes over, verifying that the payment method information is correct.
4. The transaction must then be authorized through the customer’s bank or card issuer. The payment processing software sends the inputted data to the shopper’s bank or credit card company to ensure sufficient funds and provide approval. Conversely, the card issuer or bank could also deny the transaction for security reasons if the customer’s data is not correct, or due to insufficient funds.
5. Once the transaction is authorized by the customer’s bank or issuer, the payment processing software then requests the transfer of funds from the consumer’s account to the merchant’s banking account.
6. The transaction is then complete once funds are transferred and the transaction is posted within the merchant bank. At this point, the payment processing software can send notification to the customer that their transaction has been processed.

What about international payments?

As noted in our blog, international payments can be a bit different, and require a solution that’s capable of connecting and communicating with any global consumer bank.

A payment processing solution that supports international payments can accept traditional, American credit and debit card payments, as well as eChecks and ACH payments. This processing software can also facilitate payments with other global banking institutions to support international payments.

Payment processing software enables online transactions to be verified and authorized.

Payment processing software solutions: Key features and benefits to look for

In order to support the best experience for customers as well as for the business’s accounts receivable department, it’s important to choose a payment processing solution with the right features and capabilities. There are more than a few solutions to choose from here. But selecting electronic payment software that securely accepts multiple payment methods, including international payments, will provide for the business’s needs, as well as those of their customers.

Here are a few of the most important aspects to look for when consider a payment processing software:

• Support for traditional and global payment standards: The best payment processing solutions will support ACH payments, as well as other global standards like SEPA and BACS. In this way, merchants can accept domestic payments, international payments, reference or recurring payments, and more.
• Direct communication with the bank: A solution that can directly connect and communicate between the consumer’s bank and the merchant bank provides added security as well as support for industry compliance. An ideal payment processing software solution will enable seamless, secure and direct transmission of sensitive financial information between the commerce platform and the bank. This also eliminates the need for unnecessary human interaction, limited access to sensitive financial data and further supporting security.
• Secure transmission and data storage: For PCI DSS compliance, all payment processing solutions must include strong encryption for customer payment information, including for data at rest, and in transit. In other words, a best-in-class payment processing software will ensure that customer payment data is securely stored in a siloed system away from the merchant website, and that transactions are transmitted through a completely protected portal.
• Integration with leading ERP and CRM software: A payment processing solution that can also integrate with the business’s accounting, ERP and/or CRM platform is a considerable advantage. For instance, SK Global Software’s Vendor Payment Automation and Credit Card Advantage payment processing solutions can directly integrate with Microsoft Dynamics to create a seamless and unified accounting infrastructure. Integration at this level can help reduce cost errors and ensure that payment and transaction data is accurate across the board.
• Real-time payment processing: In addition, a solution that can support real-time payment processing is a considerable advantage for both the merchant and their customers. Transactions can be processed and posted as quickly as possible.
• Customization and branding: The best payment processing software will help provide a unified user experience, as customers go from the business’s regular website to the payment processing portal. A solution that can be customized with the same theme and color as the company’s website will help reduce any friction or hesitation on the customer’s side, as the experience is more seamless throughout the payment process.
• Robust support from the solution provider: While best-in-class payment processing software is typically intuitive and simple to set up, an optimal solution will also come with strong customer support from the vendor.

Selecting the right payment processing software can help increase data security, bolster PCI DSS compliance, and ensure that the business can accept nearly all payment forms, including those stemming from international banking providers.

To find out more about payment processing software and the top features and capabilities to look for, connect with us as SK Global today for a free demo.