Best Payment Processing Software

Payment Processing Software Guide

Payment processing software is a specialized form of software designed to help businesses process payments from their customers. This type of software can be used to handle a variety of transactions, including electronic payments (like credit and debit cards), e-commerce, wire transfer services, payroll systems, and invoicing. Payment processing software allows for easy and secure payment transactions by handling the details associated with payment processing.

Payment processing software helps streamline the process of collecting payments from customers and making sure that those payments are properly recorded in the company's accounting system. The specifics of how this process works will vary depending on the software, but generally it involves collecting customer information such as their name, address, card number and expiration date along with any other required information, verifying that all information is accurate using fraud detection tools, and then submitting the transaction for authorization with a payment processor (such as Visa or MasterCard). After the processor approves the transaction, payment is transferred to your business's bank account.

Many payment processing providers offer additional features such as recurring billing so businesses can set up regular automatic charges for subscriptions or memberships; customer loyalty programs; customer data analysis; automated emails to customers when they make a purchase; fraud protection services; dispute resolution support; analytics to track sales trends over time; and integration with other applications like accounting or point-of-sale systems.

The benefits of using payment processing software include increased security due to encryption protocols which protect customer financial data during transmission; reduced manual processes since much of the work is handled by automated processes within the application; improved efficiency since transactions move quickly through the system without human involvement; better compliance with industry regulations governing cardholder data storage and retrieval practices ; scalability for growing businesses who want to expand their operations without having to invest in new technology infrastructure every time they need more capacity; cost savings through lower overhead costs associated with using automated solutions rather than manual methods.

Overall, payment processing software offers businesses an efficient way to securely handle financial transactions while providing valuable features that improve customer satisfaction and facilitate growth without needing significant investment in additional technology infrastructure.

Understanding Payment Processing Software

The best payment processors offer transparency, owners also appreciate the premium customer services and straightforward fee policies. Companies service enthusiastic “e-tailers” and traditional brick and mortar operators.

Systems are now available for POS (Point of Sale) transactions, one of which is Square Point Of Sale. Another is Helcim, which focuses on subscription services.

Do not underestimate the act of accepting credit card payment and actually getting paid. A lot goes into the process, make sure your system can handle any complications. This means being aware of the many steps involved and adept at smoothly handling each phase.

Your software must handle the large number of sales on mobile devices, bridge the gap between services you provide and the payments that increase your bottom line. This review will not quote figures or contract terms as they definitely vary dependent on many factors.

Payment Processing Software Features

• Payment Authorization: Payment processing software allows businesses to securely authorize payments from customers. This feature helps merchants ensure they are only accepting payments from legitimate customers and helps protect against fraud.
• Payment Processing: Payment processing software helps to process payments from customers quickly and securely. This includes processing credit cards, debit cards, and other payment methods, such as Apple Pay, Google Pay, and more. Payments are securely handled and stored with payment processing software.
• Payment Tracking: Payment processing software allows merchants to track payments, including the amount, date, and time of payment. This helps merchants keep track of sales and customer payments and helps them stay organized.
• Reporting and Analytics: Payment processing software provides reporting and analytics features to help merchants better understand their customers and their payment trends. This helps merchants make informed decisions to improve their business.
• Customer Support: Payment processing software often provides customer support and assistance to help merchants troubleshoot any issues that may arise. This can be in the form of live chat, email, or phone support.

Types of Payment Processing Software

• Point of Sale (POS) Software: Point of sale (POS) software is designed to manage sales transactions and track customer data. It usually includes features such as inventory tracking, customer profiles, reporting, and payment processing. POS software can be used in physical stores, online stores, or both.
• Credit Card Processing Software: Credit card processing software is designed to help process payments on mobile devices, such as smartphones and tablets. It usually includes features such as invoicing, customer management, and transaction tracking.
• Payment Gateway Software: Payment gateway software is designed to securely process payments from customers. It usually includes features such as fraud prevention, encryption, and tokenization. It also provides customers with a secure way to make payments online.
• Virtual Terminal Software: Virtual terminal software is designed to help process payments in a virtual environment, such as through a web browser. It usually includes features such as reporting, customer management, and payment processing.
• Automated Clearing House (ACH) Software: Automated clearing house (ACH) software is designed to help process large payments and batches of payments. It usually includes features such as payment tracking, reporting, and customer management.
• Online Invoicing Software: Online invoicing software is designed to help businesses create and send invoices to customers. It usually includes features such as payment tracking, customer profiles, and reporting.

Initial Costs and Equipment

Today’s payment facilitators compose a unique group of providers.

Each entity clears credit card payments. Several contracts with individuals and all of them work with intermediaries such as Independent Sales Organizations (ISOs) that are registered with a bank.

QuickBooks and Square POS are designated merchant services aggregators. A sub-account is set up within established master merchant accounts.

Business owners are the main users of payment processing software. Generally, they are subject to as many as three sets of fees: credit card company interchange fees, intermediary and processor transaction charges. There are a choice of pricing structures available to businesses based on monthly transactions, total amount of credit card payments and average sale amounts.

For example, the contrast between a store that sells big ticket items and that of a small coffee shop’s revenue demonstrates the need for different systems.

Credit card processing companies have extensive systems in place to handle major cards like Visa, American Express, Discover and MasterCard. They also fully service Android Pay, PayPal and Apple Pay. These are the most recognized mobile and digital payment models, however, new technological developments means the future will include cryptocurrency payment options. Cryptocurrency systems will impact retail and micropayments.

Additionally, more attention will focus on equipment for users who aren’t cloud-based. These include POS system terminals, mobile device credit card and swipe/dip card readers, tablets, and virtual terminals, all designed to accommodate eCommerce.

As previously mentioned, credit card companies determine interchange fees and every processor is charged the same amount. Corporate cards and rewards cards are in another class and pay higher fees.

Chargeback fees are unavoidable and also assessed differently by individual companies. When possibly fraudulent charges appear, processors manually review the payment in question and settle disputes between credit companies and merchants. Processor profit derives from fee markups or minimal transaction costs combined with a subscription fee.

How Much Does Payment Processing Software Cost?

The cost of payment processing software can vary greatly depending on the features and capabilities that it offers. Generally speaking, you can expect to pay anywhere from a few hundred to several thousand dollars for a basic payment processing solution. For more comprehensive solutions, you may pay anywhere from $5,000 to $10,000 or more. The cost of payment processing software can also depend on the number of users, the type of payment methods accepted, and other factors. Additionally, the cost of payment processing software may include additional fees for setup and customization, as well as monthly or annual subscription fees. When shopping for payment processing software, it is important to compare features and costs between different providers to ensure you are getting the best value for your money.

You can estimate the price using your total number of monthly transactions to decide which is the best plan for your business. This assures that you will not guesstimate too low or two high.

Another factor is the average amount of your sales each month. It’s essential to receive a contract that lists all fee charges. Per this agreement the processors should not be allowed to change fee amounts or institute and collect new fees.

A good business practice is to purchase the payment processing equipment your business will need. In fact, most of the companies discussed in this article directly sell their equipment or maintain agreements with hardware suppliers. Beware of “free equipment” sales talk, the fact is you may sign up for an expensive lease program.

Partnership bundles are a great option, a few hundred dollars will get you started with the basics. The price increases if you want the latest technology such as a POS system that interacts with cloud apps, supply chain and accounting issues.

Support and Compliance in the Payment Card Industry

Reputable providers incorporate the Payment Card Industry Data Security Standard (PCI DSS) for merchants with services. This is not a federal government requirement, the regulations are overseen by a private organization that is self-funded.

Some of the PCI DSS rules are difficult to navigate if your business is a small enterprise and/or fairly new. Processors aren’t really involved in any of the rules, but still may charge compliance fees that start at $20 and may cost up to hundreds of dollars.

This is where a merchant services aggregator like Square makes sense. The sub-merchant account model means compliance costs are included in the company’s Merchant Account maintenance.

The processors discussed here mostly offer 24/7 technical support. Ideally you should also have a specific account manager assigned to your business when you sign the contract.

Do a little investigation, place an after-hours call to the processor. This is a way to see how these calls are handled. Is there an annoying wait time or are these calls answered efficiently by knowledgeable staff?

Also verify whether support contact information is clearly visible on the website. A complicated and repetitive phone menu is another red flag. The importance of learning as much as you can about who you are doing business with can not be emphasized enough.

Who Uses Payment Processing Software?

• Retailers: Businesses that accept payments from customers in exchange for goods and services.
• Banks & Financial Institutions: Organizations responsible for processing financial transactions, such as deposits, withdrawals, transfers, payments and investments.
• Payment Service Providers (PSPs): Third-party companies that provide payment processing solution to retailers and merchants.
• Ecommerce Platforms: Companies that offer an online platform to facilitate the sale of products or services over the internet.
• Mobile Payment Services: Services provided by mobile phone providers which allow users to make payments through their phones. These services are becoming increasingly popular with customers due to their convenience and portability.
• Freelancers & Small Business Owners: Independent contractors who need a secure way to process payments from clients or businesses with limited resources that need a flexible payment processing solution.
• International Merchants & Travelers: Merchants who conduct business across borders and travelers needing access to multiple currencies when making purchases abroad.
• Charities & Non-profits: Organizations that rely on donations and need a secure way to accept payments from contributors.
• Government Agencies & Regulators: Public institutions that need secure payment processing solutions to manage government payments, taxes and fees.
• Online Marketplaces: Businesses that offer online marketplaces to buyers and sellers around the world, often requiring advanced payment processing solutions.
• Payment Aggregators: Companies that offer payment processing solutions for multiple businesses, allowing them to accept payments from different sources and channels.
• SaaS Businesses: Software-as-a-service (SaaS) businesses use SaaS billing and recurring billing systems to charge for their subscription services.

Payment Processing Software Trends

1. Increased Security Features: Payment processing software is evolving to include advanced security features to protect customer data and reduce the risk of fraud. This includes sophisticated encryption algorithms, two-factor authentication, and tokenization.
2. Cloud Platforms: Cloud-based payment platforms are becoming increasingly popular due to their convenience and scalability. They help businesses reduce infrastructure costs while also providing a secure and reliable platform for collecting payments.
3. Mobile Payment Processing: Mobile payment platforms are becoming more commonplace as businesses seek to provide customers with an easier way to pay without having to use cash or credit cards. These mobile payment solutions are usually integrated with other applications such as Apple Pay, Google Wallet, and Samsung Pay.
4. Big Data Analytics: Big data analytics tools can be used in combination with payment processing software to analyze customer data such as spending habits and payment preferences. This helps businesses better understand their customers and provides insights that can be used to improve the customer experience and optimize sales strategies.
5. Automation: Automated payment processing solutions are becoming more common as businesses look for ways to streamline their operations and reduce human error associated with manual data entry processes. Automation can also help speed up the process of handling payments, which can lead to improved customer satisfaction levels.

Who Uses Payment Processing Software?

• Retailers: Retailers use payment processing software to accept payments from customers in their stores. They may also use it to track inventory, manage sales and loyalty programs, and generate reports.
• Online Stores: Online stores use payment processing software to process payments from customers on their websites. They can also use it to manage inventory, create discounts and promotions, and integrate with other online services.
• Financial Institutions: Financial institutions use payment processing software to process payments from customers and send the funds to the merchant’s bank account. They may also use it to manage customer accounts, create reports, and integrate with other financial services.
• Businesses: Businesses use B2B payment processing software to process payments from customers and send the funds to the merchant’s bank account. They may also use it to manage accounts, create reports, and integrate with other services.
• Government Agencies: Government agencies use payment processing software to process payments from citizens and send the funds to the agency’s bank account. They may also use it to manage accounts, create reports, and integrate with other services.
• Non-Profits: Non-profits use payment processing software to process donations from donors and send the funds to the organization’s bank account. They may also use it to manage accounts, create reports, and integrate with other services.
• Charities: Charities use payment processing software to process donations from donors and send the funds to the organization’s bank account. They may also use it to manage accounts, create reports, and integrate with other services.

What Integrates With Payment Processing Software?

Payment processing software can integrate with a wide variety of different types of software, including online banking systems, accounting and invoicing software, inventory management systems, customer relationship management (CRM) software, and point-of-sale (POS) systems. Online banking systems allow customers to securely link their bank accounts to the payment processor so that payments can be automatically taken out of a customer's account when requested. Accounting and invoicing software helps business owners keep track of all their financial information related to payments such as revenue and expenses. Inventory management systems help online businesses accurately track what products they have in stock and when it needs to be restocked. Customer relationship management (CRM) software helps companies manage customer information so that they can quickly process payments from returning customers or make recommendations based on past purchases. Finally, point-of-sale (POS) software allows retailers to instantly receive payments through card readers or mobile payment methods at physical locations.