Integrated Payments: What They are and How They Work

Integrated Payments: What They are and How They Work

Integrated, unified, and collaborative systems are terms we hear a lot about, and it may feel like every software company talking to banks and credit unions pitches integrated payments. It’s important to know exactly what they mean and why it’s important for your business. If you don’t, then you’re more likely to be roped into a solution that isn’t catered to your specific needs.

So what are integrated payment systems, anyway?

Integrated payments is a broad term, but it essentially means a payment system that communicates with all other critical software your business uses. That means the exact structure of an integrated system is unique to every business and should be treated as such.

For example, a bank that uses Intuit for accounting and has an internal payment gateway system that passes along each transaction to that accounting software automatically is a type of integrated payment solution.

Another more complicated example would be if a credit union had a third-party CRM system with all of their clients and leads, and whenever a new payment was taken it passed that data to the CRM to log under a specific contact profile and sent it to their accounting software.

It’s basically open communication between all of your critical systems, so critical business systems + payment processes + encrypted data and real-time communication = your integrated system.

But why does this matter?

Agile data is the key to keeping your business competitive

Well, there are a lot of benefits as outlined below, but it boils down to data input and retrieval. Easy access to powerful insights empowered by a payment integration allows your institution to be agile across every division.

Quickly making smart decisions based on up-to-date data will separate the winners from the failures in the 2020s and beyond. If your business feels like it’s built on a rocky bed of competing software, every day you waste countless hours of labor making those systems work well together. It affects your forecasting accuracy, security, and marketing abilities. This is a burden that is only costing your business money, and the more time you spend avoiding an upgrade the greater the sunk costs.

6 reasons you should have already switched to an integrated payment solution

#1 - Reduction in labor

There are a myriad of administrative and data input processes that are reduced when you adopt integrative payment systems. At a fundamental level, you don’t have to worry about sales information being sent to any system it needs to. Most commonly that means no more batching out and manually inputting transactions in accounting software, and it means you don’t have to open up your accounting software to see which clients have paid what while cross-referencing to your CRM. It alsob means you don’t have to look at your payment gateway and figure out what dates had the highest sales in the year, open up your CRM, and cross-reference which demographics spent the most.

See what we mean?

#2 - Integrated systems reduce errors

This is especially true in terms of accounting. When exact payment data is sent from your POS to your accounting system, that means no double transactions, no mistakes in calculations, and fewer headaches.

#3 - Superior security

The fewer and more integrated your systems, the tighter your security apparatus can be. By reducing the manual communication between your business software, you reduce the opportunities for fraudsters to attack and the likelihood of a costly breach. Modern integrated systems use tokenization, EMV, and end-to-end encryption to pass along data, and this is extremely helpful for maintaining and proving PCI Compliance.

#4 - Extremely powerful marketing and sales capabilities

Integrating sales data with your CRM is incredibly powerful. Imagine the ability to segment customers based on lifetime value, outstanding debts, renewal dates, product types, etc. It gets even more interesting when you can easily analyze your top customers by product and conduct a demographic analysis on those folks. Then, you could export those high value contact profiles, upload them to Facebook, and create a lookalike audience to pitch your latest account or bank offering.

#5 - Tax time isn’t nearly as bad

When all of your information is already in your accounting software and arranged exactly how you need it to be, your accountants will spend much less time getting ready for April 15th.

#6 - You’ll have a better understanding of your payment processing costs.

Modern integrated payment processing systems tell you how much of what type of transaction you have, and you segment that information how you’d like. For example, if you notice that most of your customers use VISA, you may find that using interchange plus pricing instead of flat pricing on payment processing could save you thousands of dollars.

How to successfully adopt integrated payment processing in your bank or credit union

Approach your search from both a customer and business perspective

Remember that using an integrated system isn’t just about your business. While most of the benefits do occur internally, you need to make sure that the partner you work will also improve the customer experience. Some merchant services providers who offer integrated systems make you switch to their merchant services when integrating, and that’s okay — as long as what they have offers a much better customer experience like expanding payment acceptance options and providing stronger customer support.

Outline exactly what you need and make sure whomever you work with understands and prioritizes your unique needs

Make sure you know what you want to get out of an integrated solution as you begin your conversations with potential providers. Have a clear goal for the types of uses you have for an integrated system and ask specific questions around that functionality. In other words, take your pain points and ask people to speak directly to them and explain how and why their solution will solve them.

Make sure your integrated payments partner has stellar support

With any fundamental shift in business technology, there are always issues that can arise during or after the process is complete. The last thing you want is to work with a company who gives you a lot of attention until the deal is signed and then feels opaque afterward. Make sure service and partnership are fundamental to their brand and pay close attention to what their customers (both current and past) say about them.

Take the first step!

All of this talk isn’t worth a dime if you don’t put your head down and get to work! If you know it needs to be done, make it happen! Your first step is to think critically about what you need and why, and then start talking to companies. We work with banks, credit unions, and many other businesses all the time and use the sharpest tech to craft unique solutions for every business. Every single best practice we discussed above is fundamental to our mission, and we would love to talk to you about your integrated systems goals. If that sounds good to you, drop us a line.

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