These days business is powered by plastic. This isn’t a reference to the famous line from The Graduate, I’m talking about credit cards. No matter where your business exists in the supply chain ecosystem, chances are that you accept payments via credit. With accepting credit card payments comes questions of which processor to use, how to integrate, and what your interchange rates will be along with hidden costs and how the system will affect your business processes. But whether your company is a small startup just beginning to tackle these issues or an established business already thinking about PCI, there are integrations that can save you time and money and help cut your liability.
When talking about payment integrations, the first subject that always comes up is PayPal. And with good reason! PayPal is widely accepted by consumers as an additional pay method on top of the big four credit card vendors. But businesses are often unsure of when, how, or why to lean on PayPal and what the added benefits and hurdles will be. And the answer to those questions often depends on the segment of the market that your business occupies.
The first question to answer is what’s your customers’ demand for this pay method? This is the most fundamental question to the need, or lack thereof, for adding this payment option. It’s also the most difficult to answer. Many customers will happily enter a credit card number if you don’t offer PayPal. But if your customer base is very security conscious or tech savvy, you should seriously consider offering it.
Another business type that should take a look at PayPal is small businesses and startups. Unlike a traditional credit card acquirer, a PayPal integration is fairly easy and PayPal offers services and functions that can help a small business process payments and communicate with customers. By approaching PayPal as a pay method early, it’s often easier to continue support down the road, so take advantage of it when you’re small and can reap the most benefit, but keep it around to offer security and convenience to your customers as you grow.
When implementing PayPal using Direct Commerce, there are a few options. When using Chase Paymentech as your card processor, there is an interface available to use Chase to process your PayPal transactions. It does require some ongoing support to keep the system running and has some idiosyncrasies, but it can work for lower volume companies. Another option is to integrate directly using the PayPal API. There are several options available when integrating, so make sure that your vendor of choice meets your ongoing business needs without duplicating data entry in two systems. All of your data should stream between PayPal and Direct Commerce automatically, decreasing your business’s costs when processing orders that come in using the PayPal pay method.
Verified by VISA and SecureCode by MasterCard
The little-known, but highly useful, security programs by VISA and MasterCard are called Verified by VISA and SecureCode by MasterCard. These programs put an additional layer of security when making online transactions by including a password that customers setup with their own bank. When checking out using your website, the checkout redirects the customer to a page hosted by their bank which forces them to enter the password before redirecting back to your site to complete the transaction. In this way, your business never knows the customer’s purchase password, but can still use it to validate the activity.
So what does this added security mean for your business? There are two main reasons to implement these security programs besides better security and decreased fraud. The first is that these programs help to limit your liability as a retailer. This gives you a better position to fall back on if a card brand is looking for a chargeback and can decrease the chances of having fraudulent activity affecting your balance sheets. The other reason is that implementing these programs can help you negotiate better interchange rates with your card acquirer.
Cardinal Commerce offers an API to integrate Direct Commerce with these systems. The system they offer is fairly easy for any developer to understand and offers a modern interface for programmers to use. If you have an in-house programmer who is familiar with the workings of your checkout, the integration from beginning to end only takes about two weeks with the required testing taking about ½ of that time. If you use an outside vendor, find out what checkout technology your company is currently using and how easy it is to make changes.
Accepting Real-Time Authorizations
Many small to medium retailers don’t accept credit card authorizations in real time using their website because of the increased costs associated with that technology. And depending on your size and market segment, that may be a wise decision. But there are a few things that can eliminate or offset the cost of real-time authorizations.
One of the big costs is the frame relay or MPLS circuit that is often installed. The cost varies from market to market; but you can expect to pay at least a couple hundred dollars for one of these lines. Even when your existing Internet connection is used with a VPN, the vendor will often charge a “maintenance” fee associated with the connection. However, there are some newer acquirers who will allow authorizations to run over the Internet using a high level of encryption. The key to finding the right technology solution for your needs is to check with a wide range of card acquirers until you find the right match for your business. When you decide on one, make sure you know what you’re getting – and what you’re not.
Other than technology solutions, it’s also possible to offset the costs with personnel savings. For smaller businesses, handling fraud isn’t typically a large waste of time. But once your company is handling hundreds of orders in a day, real-time authorizations are a must because of gained efficiency. Fraud levels vary widely among different sectors, but authorizing cards in real time can be a big help to the operations individuals processing orders in your organization.
Direct Commerce already has an integrated real-time credit card authorization service built into the software. Once your network configuration is in place, the configuration and use of this service is easy and low-maintenance. It works great with both front-ends for the system and can be integrated with your website as well. When integrating with your website, it’s important to test, test, test! This feature is not documented well and can take a good amount of time to debug; but it does work great in production once implemented properly.
Even if more sophisticated projects are out of your reach, there’s always work that can be done on your existing infrastructure to help cut costs. Often, smaller operations rely on manual credit card processing and order processing. This is where systems like PayPal can add value by helping you manage your card transactions. But if you already have an ERP system handling orders and credit cards for you, look into automating as many of these tasks as possible. This sort of automation doesn’t prevent user intervention in the system completely, but it can reduce the time employees spend handling payment systems and allow them to focus on your real business goals.
Credit card processing is going to remain a part of doing business for quite some time. So it makes sense to automate and integrate your systems to gain the highest cost savings and highest level of efficiency. If you know what possibilities exist, your business will better be able to thrive in today’s marketplace.
For more information on how to solve your direct commerce business challenges, visit JDA Direct Commerce.