5 Factors For Banks To Consider When Choosing A Payment Processing Partner

Banks can derive powerful benefits by partnering with a top-notch payment processor. But financial institutions that don’t vet those partners with due diligence may inadvertently invite problems. 

There are five key considerations to explore when selecting the right payment processing partner, and these can help ensure a more rewarding and value-adding relationship.

1.) Experience Serving Banks

Banks are advised to seek out a payment processor with a proven and verifiable track record of successful bank partnerships. Experience in the nuances of banking, coupled with an understanding of the needs and preferences of merchants who rely on banks, is essential. Otherwise a bank’s vital merchant relationships may be jeopardized because of the payment processor’s lack of knowledge, resources, and vision. A qualified payment processor will anticipate what a bank and its merchants require. Then it will offer customized solutions to help ensure stability, profitability, and growth.

2.) Robust Security

Proactive risk management is priority number one for banking institutions. Don’t let a processing partner who isn’t vigilant compromise security. When vetting a payment processor, make sure they are expert at guarding against potential data breaches. They should use all the latest payment protection technologies such as data encryption, tokenization, PCI-compliant Level 3 processing, and access-restricted cloud backup. They should also know how to accommodate the needs of businesses within regulated industries. Law firms, for example, need a payment system that supports approved escrow accountability. Healthcare providers must ensure airtight HIPAA compliance. A qualified payment processor will stay updated on compliance issues, technological solutions, and best practices. They’ll also facilitate ongoing payment system security training for bank personnel and partnering merchants.

3.) Specialized Public Sector Solutions

A partner with creative solutions for government agencies, municipalities, and educational institutions is a great asset. They can open up new opportunities for banks to pursue those potentially lucrative accounts. For example, a flexible rate payment system, which utilizes industry-compliant legal surcharging, can ensure that the organization never again has to pay credit card “swipe fees” to companies like VISA and MasterCard. Overhead is significantly reduced, net revenue is increased, and flex-rate payments build public trust through greater financial transparency and equity.

4.) Strategic Consultation and Collaboration

Always demand that a payment processing partner does more than simply sell products and services to the bank. Look for one that will become a long-term solution-focused success collaborator. Their support and innovation should improve the bank’s customer service to help attract and retain merchant accounts. Banks who choose a superior payment processing partner can reduce in-house labor and overhead, while expanding their merchant account portfolio and market share.

5.) Flexibility and 24/7/365 Support

A B2B payment platform should be designed exclusively for B2B and be able to process multiple payments simultaneously, in a variety of currencies, with instant electronic invoices and receipts. Choose a partner with dedicated, personalized support that is not outsourced to a third party and extends around the clock, even on bank holidays. Then enjoy the competitive advantage derived from having a technologically advanced, strategically innovative, and highly responsive payment processing partner.

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What Is An Online Merchant?

An online merchant is a business that sells goods and processes payments over the Internet. This ecommerce store transacts through a virtual terminal and payment gateway. These merchants are similar to physical store merchants except that the point-of-sale and all business is conducted online.

What Does An Online Merchant Do?

The role of an online merchant is to sell products on their website. It is most common for new business owners to start off as online sellers. This is different than an online merchant because the merchant has more responsibilities such as managing inventory and organizing payment services. These merchants can choose to charge a flat rate or monthly fee aka recurring billing.

For an online merchant to be successful, they must maintain the product or service quality, set pricing, manage payment services, and execute strategic marketing. Advertising online is essential for business growth and sustainability. It is important for the merchant to be knowledgable of new media trends in order to properly maintain the company brand and successfully sell products.

Online Merchant Transaction Process

The process of a transaction from the card holder’s bank account to the online merchant account is intricate, but broken down becomes quite simple and clear. Below is a flow of online payment processing from point-of-sale to the online merchant bank account.

What Are The Different Kinds Of Online Merchants?

01. Ecommerce Merchant

An Ecommerce merchant sells products or services exclusively over the Internet. An online merchant account is different than an online seller. The online seller only buys products and sells them for profit. The online merchant has additional responsibilities. The major responsibility is that the online merchant is in charge of payment processing. They also need to manage inventory, develop the company brand, and promote the products or services.

02. Wholesale Merchant

A wholesale merchant, also known as a wholesaler, purchases goods in bulk. After the products are purchased, the merchant redistributes them to retailers in smaller volumes. In the past, it was more common for wholesale merchants to operate out of large warehouses, but lately, the trend has swayed towards the merchant acting as a broker of the transaction. This method of business is called drop shipping.

03. Retail Merchant

A retail merchant, also known as a retailer, purchases goods from wholesale merchants in smaller quantities. The retailer sells products directly to consumers. Usually these types of merchants are much better at marketing and advertising then wholesalers.

Retail prices are always higher than wholesale. One major contributor to the price difference is that retail spends more on promotion, PR, advertisements, and marketing. The retailer is also more responsible for their public image and customer service since they are customer-facing.

Retail merchants are essentially resellers. This allows them to change labels and repackage products using a different brand. Not all companies allow the packaging to be changed. Trademark rights and other agreements can affect the freedom a retailer has for re-branding. This selling strategy is effective, however there is much more involved in product promotion. Reselling seems to be the most popular form of product distribution among business owners. In the wake of the Covid-19 pandemic, it is apparent that retail merchants will be taking their business online more and more as social distancing and shelter-in-place continue.

04. Affiliate Merchant

An affiliate merchant is a business that generates sales of products through a network of affiliates using links and ads. Affiliate merchants advertise merchandise on a website and then earn a percentage of the sale when the buyer makes a purchase. A membership fee is commonly charged for merchants to be a part of the network. An additional commission is taken from every sale in order for the affiliate program to function.

The Status Of Online Merchants

Every year online sales grow as more merchants open online. This trend is likely to continue, especially considering the effects of the Covid-19 pandemic on the public’s decision to not shop at physical locations. Instead, shoppers are being driven to use their debit card, American Express, Visa, Mastercard or Apple Pay to purchase products from online merchants using ecommerce websites and online credit card processing resources.

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The Evolution of Payment Cards

From hybrid cards to digital wallets, the future of payments is innovative and diverse. With the ongoing digitization of payments, it’s easy to get caught up in the narrative that the traditional payment card could become obsolete. However, this couldn’t be further from the truth. In fact, card payments are thriving, adapting to the new age of fintech and smartphones.  

Having worked in the payments space for many years, I have travelled across global markets, and I've observed firsthand the evolving landscape of financial transactions. My conclusion is that one size does not fit all. Different markets have different payment requirements.  

In mature markets, I've witnessed the swift adoption of instant payment solutions, revolutionizing the way transactions occur. Meanwhile, in developing markets, the focus shifts towards the proliferation of card-based systems, both physical and virtual, along with the rapid expansion of instant networks. In these diverse environments, traditional notions of card usage are undergoing profound transformations.  

While some regions are still familiarizing themselves with physical card formats, the true innovation lies in the integration of cards with cutting-edge technologies. This entails the emergence of virtual cards, digital wallets, and tokenization mechanisms, heralding a new era of convenience and security in financial transactions. 

The advent of hybrid cards 

One of the most exciting developments in this area is the emergence of hybrid cards. These are not your typical single-function payment cards. Instead, hybrid cards flip between debit and credit functions, switch currencies, and even enable the conversion of digital assets. This opens up a wide variety of possibilities for consumers, allowing them to navigate through an increasingly digital financial landscape with ease. 

Such changes are not only increasing the use cases that cards can support but are embedding ‘payment by card’ into a wide range of user journeys. This enables faster and hyper-personalized customer experiences where the payment is invisible and can drive increased customer satisfaction, loyalty and engagement. It demonstrates that whether for in-person transactions, online payments, international transfers, or navigating blockchain technologies such as Web 3.0, the physical card remains fundamental. 

A new payments landscape 

Another important point to consider is that the landscape of payment methods is as diverse as it is innovative. Digital wallets, wearable technology, and biometric authentication are becoming increasingly popular – as well as contactless payments. The contactless payment market is set to grow at an 18% compound annual growth rate to reach more than $12 billion globally by 2032. The physical card is not diminished with this recent innovation but embedded throughout the next generation of payment technology. It now enables a wide range of unique customer journeys, transforming its role to a source of truth in the sprawling payments ecosystem.   

However, it’s important to remember that attitudes towards these new payment methods vary significantly across different demographics, geographical regions, and between consumers and businesses. For example, in Kenya, the mobile money pioneer M-Pesa reigns supreme offering a range of P2P payments, virtual wallets and credit cards – and mobile money transactions make up more than half of Kenya’s $110 billion GDP. Meanwhile, in North America, credit cards are practically extensions of self, with 82% of U.S. adults having a credit card in 2022. Rewards programs and ingrained financial habits keep plastic firmly in wallets. 

Understanding these geographical nuances is key to appreciating the broader context of payment evolution. 

Tokenization and connectivity 

At the heart of these new payment innovations is tokenization and the connection to payment rails - be it local networks or global giants like Mastercard, Visa, and Union Pay. This connectivity is not just a technical feat; it is what enables a smooth, embedded payment experience, whether through mobiles, wearable tech, or even more futuristic avenues. 

The ultimate aim of these developments is to make payments as seamless and unobtrusive as possible. The idea is to embed the ‘payment by card’ process into various user journeys, making it faster, more convenient, and almost invisible. This seamless experience is key to driving customer satisfaction, loyalty, and engagement. 

The future of cards 

Looking to the future, the question is not about which technology will replace the card. It is about understanding how the fundamentals of card technology will continue to influence and shape new payment methods. The physical card's widespread adoption enables interoperability, ensuring seamless transactions across continents and platforms. 

The world of payments is witnessing a transformation, with cards playing a central role. The challenge and opportunity lie in anticipating which payment methods will evolve from this technology and dominate the market and which will fade away. One thing is certain: the journey of the payment card is far from over. Ultimately, we are not the ones to decide where the journey will go – it is about users, and our role is to give them the choice.  

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What Is Credit Card Processing And How Does It Work?

 

 

In this video, we'll cover everything you need to know about credit card processing including a breakdown of the overall process, who’s involved in a credit card transaction, the different credit card processing fees, and much more. We’re confident that by the end of this video you’ll have a much better understanding of how payment processing works!

Digital Wallets, Mobile Commerce, and Your Business

Mobile wallets are mobile device apps that allow people to store and use digital versions of their credit and debit cards. They eliminate the need to carry around a bulky wallet, or worry about a physical credit card or cash getting stolen.

If a smartphone does happen to fall into the wrong hands, the mobile wallet would still be protected by the fingerprint ID, facial recognition, or passcode the owner has set to authenticate and open it.

With more and more consumers using mobile payment technology, such as Apple Pay, Google Pay, and Samsung Pay, merchants are accommodating them with NFC credit card terminals.

All it takes is a tap on the terminal for a customer to make a payment using their smartphone. Through Near Field Communication (NFC), the terminal is able to accept the transaction. Not only do mobile payments speed up your checkout line, they also help drive revenue by catering to customer preference.

How Does NFC Work?

Mobile wallet payments are called contactless because they don’t require physical contact between credit card and terminal, and instead get transaction data from the former to the latter through NFC.

NFC powers credit card terminals to create an electromagnetic radio field with other NFC-compatible devices, such as smartphones, smart watches, etc.

The radio field makes a safe channel for close-range contactless payments. The customer simply waves their device over the terminal to make what’s known as a “tap and go” payment. Physical credit cards can also be contactless, so not all contactless payments refer to mobile wallets.

Mobile Payment Security

Mobile payments are backed by leading-edge security. Take Apple Pay for example. When an iPhone user uploads their credit card information to a digital wallet, the card data is instantly tokenized and stored on a secure NFC chip in the phone.

The token is a random substitute that can’t be decrypted, so it’s worthless to credit card thieves. The token holds the place of the real card information, so nothing sensitive is ever stored on Apple’s servers, on the smartphone, or at businesses where the card is used.

Only the highly secure payment processor has access to the “token vault,” which holds the keys to match up tokens to the real card info they represent. To all other parties involved in the transaction, the token is meaningless.

Thanks to tokenization, NFC technology, and biometric authentication (fingerprint or face ID), mobile payments are considered even safer than traditional card-present transactions.

What About Online?

You can use a mobile wallet on your smart device and conveniently make payments in stores, or you can store a digital wallet on a computer to make online transactions with a simple click instead of keying in your payment information every time. For a big task, like Christmas shopping online, this is a major time-saver.

Digital wallets help reduce cart abandonment at your online store because payment occurs in one fell swoop, rather than requiring the customer to enter their information.

A mobile wallet typically refers to one that is stored on a handheld or wearable mobile device, like a smartphone, Apple Watch or Fitbit. A digital wallet securely stores payment data in the same way, but is typically stored on a computer and used for online purchases. Sometimes, the terms are used interchangeably or called e-wallets.

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Understanding Cash Discounts and Surcharges

In recent years, cash discount and surcharge programs have gained popularity among business owners as a way to manage payment processing costs. However, before implementing either of these programs, it's crucial for business owners to have a clear understanding of the key differences between them, comply with card brand regulations, and avoid potential penalties. In this article, we'll delve into the distinctions between cash discounts and surcharges and provide insights into their implementation.

Cash Discounts vs. Surcharges - A Clear Distinction

Surcharges: A surcharge is an additional fee added to a credit card transaction to offset the costs associated with credit card processing. In this scenario, customers pay more than the advertised price when using a credit card.

Cash Discounts: On the other hand, a cash discount is a reduction in the total amount a customer pays when using cash as the payment method. Customers receive a lower price than the advertised one when they opt for cash payment.

It's important to note that if a fee is added at the register, regardless of how it's labeled (e.g., "service fee" or "non-cash fee"), it qualifies as a surcharge. Visa specifies that while merchants can offer discounts for cash payments, these discounts must be presented as a reduction from the standard price.

Surcharges vs. Convenience Fees or Service Fees - Clarifying the Terms

Convenience Fee: This fee is added to a transaction to account for the convenience of using an alternative payment channel that is not the standard method for the business. For instance, movie theaters may charge a convenience fee for online ticket purchases. No fee is applied when paying in person at the ticket booth because that is the standard payment method. It's important to note that each card brand has its own rules for compliantly assessing a convenience fee.

Service Fee: This fee is added to a transaction as compensation for providing a specific service. It is generally limited to specific merchant categories, such as education and government merchants.

Implementing Cash Discount and Surcharge Programs

Cash Discount Program Implementation:

Implementing a cash discount program is straightforward and does not require registration or specific regulatory requirements. It is legal in all 50 states when executed correctly. Some common examples of cash discount programs include:

• Using a dual pricing model with separate cash and credit/debit prices (often seen at gas stations).
• Advertising credit prices and offering a discount if the customer chooses to pay with cash.

However, it's worth noting that some approaches, like disclosing a customer service charge at the register and waiving it for cash payments, may be considered non-compliant.

Surcharge Program Implementation:

Implementing a surcharge program involves certain requirements and notifications to card processors. Here are the key steps:

• Notify your payment processor, like Payment Logistics, at least 30 days in advance of your intent to surcharge.
• Display proper signage indicating the surcharge at your business's entry and point of sale.
• Surcharges can only be applied to credit transactions, not prepaid or debit card transactions (including signature debit).
• The surcharge amount must not exceed your true credit card processing cost or 3% of the transaction total.
• The surcharge must be itemized as a separate line item on the customer's receipt and included in the authorization request and settlement process.

Note: Surcharging may be prohibited or subject to limitations in some states, so it's essential to research and understand the regulations in your region.

Continuing reading on this subject here...

What Are The Benefits Of Working With A Payment Processor?

Five key benefits that payment processors offer business like yours:

#1 – Accept credit card and debit cards

The first and most important benefit payment processors deliver is the ability to process credit cards and debit cards payments. This insight may seem obvious but consider for a moment how your business might operate without the ability to accept card payments.

Reliable payment processing is on the short list of essentials for most businesses to function properly. It has been found that together credit cards and debit cards accounted for over half (42%) of eCommerce and three quarters (74%) of in-store consumer payments in the US in 2017. That makes accepting credit and debit cards as important as electricity for daily operations.

This essential benefit is available whether you contract for payment processing directly, via a value-added reseller (VAR), or however you may access your payment processor.

#2 – Offer your customers alternative payment options

Your customers want choice—especially when it comes to how they pay. Credit and debit cards are essential but they’re far from the only important payment option. Today’s consumers want to use an emerging set of alternatives, like paying via their smartphones with mobile wallets.

Payment processors help businesses determine the best mix of payment alternatives to serve your customers. From direct bank transfers to pre-paid cards, gift cards to buy-now, pay-later options, payment processors help you maintain happy customers by letting them pay the way they want.

How you connect to your payment processor can determine whether you can offer all the payment alternatives your customers want. Whether your business is working directly with a payment processor or through a third-party, take the time to understand what alternatives are available before you make a commitment.

#3 – Integrate payments with your own systems

The business world is full of specialized systems. Integrations that allow separate business systems to talk to one another are essential to develop business efficiency—and to maintain business sanity.

Payments don’t take place in a vacuum. Leading payment processors seamlessly integrate payments with other business workflows like accounting, billing, customer relationship management (CRM), and more.

#4 – Direct pricing, direct relationships

Value-added resellers (VARs) bundle payment processing with other business services. Independent sales organizations (ISOs), merchant service providers (MSPs) and eCommerce providers also offer payment processing, though one step removed from the source. These and other third parties often resell the services of a payment processor as part of their business services package as part of the wealth of value-added services they provide.

Yet many businesses prefer direct payment processor relationships. Direct relationships offer can offer more extensive payments expertise, superior customer service, 24/7 troubleshooting, data security assistance, fraud protection and more. Direct relationships with payment processors can also mean direct pricing models that can result in significant savings.

#5 – Flexibility to grow with your business

Payment options are evolving fast—just like your business. Leading payment processors help businesses like yours stay ahead rapid changes in the payment marketplace. Full-service payment processors that operate at scale partner with businesses at every stage of growth.

Many third-party services that resell or bundle payment processing are designed for early-stage small businesses. From sole entrepreneur start-ups to enterprise businesses on a global scale, leading payment processors can not only grow with your business, the best can also help you achieve that growth.

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Effortless Age Verification with Vivid POS

 

 

We're diving deep into the powerful Age Verification feature offered by Vivid POS. Whether you're a business owner, a manager, or someone interested in the latest technology trends, this demonstration is a must-watch. Age verification is crucial, especially in industries where age restrictions are applied, such as retail, hospitality, and entertainment. Vivid POS takes this responsibility seriously by providing a seamless and efficient solution.

Key Features and Benefits:

• Instant Verification: Witness how Vivid POS instantly verifies customer age, reducing waiting times and improving service efficiency.
• Compliance Assurance: Learn how Vivid POS helps businesses stay compliant with legal age restrictions, minimizing risks and ensuring a hassle-free operation.

• User-Friendly Interface: Explore the intuitive interface of Vivid POS, designed for easy navigation and quick age verification.
• Data Security: Understand how Vivid POS prioritizes data security, safeguarding customer information while streamlining the verification process.

5 Reasons to choose Vivid for credit card processing over Square

Switching from Square to Vivid's Credit Card Processing can be a significant decision for your business, and it should be based on a careful evaluation of the advantages and disadvantages of each option. Here are five potential reasons why you might consider choosing Vivid for Processing:

Lower Transaction Fees: Vivid offers more competitive transaction fees compared to Square. Lower fees can directly impact your bottom line by increasing your profit margins on each sale.

Customizable Payment Solutions: Vivid provides more flexibility in tailoring payment solutions to your specific business needs. Whether you need customized pricing structures, specialized reporting, or other features, Vivid's offerings may be more adaptable.

Enhanced Security: Vivid offers advanced security features to protect your transactions and customer data. Improved security can help you gain your customers' trust and reduce the risk of data breaches and fraud.

Customer Support: Vivid offers a higher level of customer support and assistance than Square. Better support can help resolve issues quickly and ensure that your payment processing runs smoothly, reducing downtime and potential revenue loss.

Integration and Compatibility: If your business relies on specific software, hardware, or integration needs, Vivid's credit card processing system offers better compatibility or integration options that align with your existing tools and systems.

Remember that the decision to switch credit card processors should be made after careful consideration of your unique business needs and a thorough evaluation of the costs and benefits. It's essential to compare the specific offerings of both Square and Vivid to determine which is the better fit for your business. Additionally, you should factor in any contract terms, early termination fees, and potential challenges associated with making the switch - all of which Vivid does not implement.

List Of Our Bankcard Processing Services

 

All bankcard services from simple phone swipers to the current selection of high power POS systems and online needs.  You take cash, bankcards, checks, ACH, and even cryptocurrency… we provide equipment.   
Equipment changes rapidly, and I can supply the most efficient and sensible systems for your business – at a reasonable cost.