Payment Processing is a key component of most service-based billing processes. Many companies in B2C and B2SMB industries store a credit or debit card on file which are used to process recurring payments on a periodic basis. The stored cards must be stored in a PCI compliant manner. It is also common for credit cards to be declined for a variety of reasons. Declined and expired cards should be monitored carefully and proactively.

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Payment Processing Components

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Authorize

The authorization step in credit card processing typically occurs when the initial payment agreement is created with a new customer. Authorization can also occur if a customer changes from another payment type to a credit card, or when a customer changes the credit card used for billing. In the Authorize step, the credit card number and information provided by the customer is confirmed, typically by the vendor chosen to process credit card payments.

The authorization of a credit card transaction generally reserves the funds with a bank or credit card company. The transaction is then pending, and the credit company holds those funds for a prescribed length of time (usually 48-72 hours) before releasing the funds back to the customer’s account. When the service provider provisions, ships, or delivers a product or service, the authorization is re-run through the payment processor and converted to a transaction.

Payment Gateway

The payment gateway accommodates the processing of charges made to customers’ credit cards. The payment gateway is normally where credit card information is stored and processed. The payment gateway can be responsible for the majority of required PCI compliance.

Payment Processing

The authorization step in credit card processing typically occurs when the initial payment agreement is created with a new customer. Authorization can also occur if a customer changes from another payment type to a credit card, or when a customer changes the credit card used for billing. In the Authorize step, the credit card number and information provided by the customer is confirmed, typically by the vendor chosen to process credit card payments.

The authorization of a credit card transaction generally reserves the funds with a bank or credit card company. The transaction is then pending, and the credit company holds those funds for a prescribed length of time (usually 48-72 hours) before releasing the funds back to the customer’s account. When the service provider provisions, ships, or delivers a product or service, the authorization is re-run through the payment processor and converted to a transaction.

Optimize Interchange

The rates charged for processing credit card transactions can vary based on the quality and completeness of the data provided for processing as well as the timeliness with which the transaction is submitted for processing. Optimizing interchange remedies issues of speed, reliability, and data integrity as approvals, authorizations, and credits are processed.

Optimize Credit Card Success

Optimizing credit card success through process and technology improvements allow a company to meet the following goals:


Reduce credit card processing costs


Reduce the risk of fraud


Increase security of customer PCI data


Update credit card information automatically

Additional optimizations can be made to reduce the accessibility of credit card data stored within various systems. One step is to tokenize credit card numbers. Tokenization requires the processor to hold a key that associates the token with valid payment information. This process decreases the risk of theft and exposure of payment information. The tokenization process must be supported by internal systems as well as the payment processor. When a credit card is submitted to the payment processor, the token is associated with the account information stored by the credit card company, instead of the credit card. The token is stored internally for ongoing or future payments.

Account Updater is a feature supported by some systems, and most credit card processors, that allows credit card numbers and expiration dates to be updated automatically when a customer is issued a new card. This feature can be extremely useful in maintaining a low level of credit card failures. In addition, the impact to customers is decreased while increasing the overall customer experience. Service can continue uninterrupted, and the need for customers to call with updated credit card information is eliminated. What’s more, account updater has the ability to support credit cards that are re-issued as a lost or stolen card.

Process Chargebacks

Customers occasionally dispute a charge, requiring their bank or credit card company to process chargebacks. This action will result in the removal of funds from a company’s account and then returned to the customer. Companies have an opportunity to dispute the chargeback. Fighting a chargeback can be a tedious effort. Providing proof of service/product delivery as well as confirmation that terms and conditions were met can be more trouble than it’s worth for large organizations.

People, Process, and Technology of CRM: SFA

People

The Finance - Billing team leads the Payment Processing domain. Operations, Legal, and IT are also closely connected with this very focused domain.

FINANCE - BILLING

Operations

LEGAL

I.T.

Process

Twenty-six of ATG's 99 Key Monetization Processes fall within the Order Management domain. Below is a list of those processes, grouped by the org primarily responsible for stated process:

FINANCE - BILLING

Balance Management - Prepaid, Deposit, Rollover

Business rules and processes surrounding the management of prepaid balances, deposits, and rollovers.

FINANCE - BILLING

Bill Day Usage Processing

The process of invoicing usage that has been accumulating since the previous statement/invoice period. Bill day usage processing includes calculation of charges, potential overage, decrementing credit balances, and managing rollover and pooled usage constructs.

FINANCE - BILLING

Bill Run Operations

Tasks and functions associated with initiating and maintaining the billing process, including bill cycle management, usage file management, payment batches, credit card rejects, etc.

FINANCE - BILLING

Billing Setup Process

Tasks and functions associated with setting up the billing processes for given products and services.

FINANCE - BILLING

Credit Card Optimization

The overall optimization of credit card processing, including the establishment of Payment Gateway profile, keeping CC current, managing rejects, chargebacks, etc. Optimizing revenue, and reducing risk and fraud is paramount here.

FINANCE - BILLING

Credit Card Processing

Methods to receive credit card payments including authorization, payment gateway, processing, interchange, and credit card success/failures.

FINANCE - BILLING

Dispute / Adjustment Processing

Settling disputes/adjustments regarding customer payments or account. Key process for clients that are operating in a Balance Management or 'On Account' environment.

FINANCE - BILLING

Invoice Finishing & Delivery

Typically, billing engines produce raw invoice or statement data. Often, external applications are used to package this data for presentation on a paper invoice, electronic distribution, or alternate media. Most billing engines have rudimentary invoice presentation capability.

FINANCE - BILLING

Payment Processing

The steps taken to process different payment methods from customers.

FINANCE - BILLING

SOX/Regulatory Compliance

The ability to provide proof of internal controls to prevent fraud and material misstatements.

FINANCE - BILLING

Subscription Management

The processes a company uses to manage complex customer subscription attributes, including recurring billing, IN Proration (service sign up), OUT Proration (service disconnect/cancel), and associated usage, recurring, and non-recurring processing.

FINANCE - BILLING

System Auditability

Provides assurance that source system data is accurate, and a paper trail exists from a transaction to financial statements.

OPERATIONS

Proactive Customer Notification - Operations Focus (CC Expiry, Payment Received Notification)

A proactive approach to notify customers of pertinent payment information, particularly keeping Credit Cards current to limit number and impact of reject processing.

LEGAL

PCI Compliance

Ability for customer to satisfy contractually obligated PCI requirements.

I.T.

Cross-Training of Monetization Ecosystem Components

Process for training organizational resources

I.T.

Data Stewardship Across Monetization Ecosystem

Process of assigning ownership and sources of truth for data within the organization.

I.T.

Maintenance & Oversight of Monetization Ecosystem

Process around assuring that all touchpoints and connections in the ecosystem are optimized and working to their full potential.

I.T.

Monitoring & Testing of Vendor Functional Releases

As ecosystem components release updates and patches, each is checked and tested to confirm all systems are working together as required by the business' requirements.

I.T.

Vendor Management of the Monetization Ecosystem

Management of ecosystem component vendors including proactive communication of changes and general relationship nurturing.

I.T.

Security Oversight of Monetization Ecosystem

Process for maintaining and controlling access and permission to ecosystem components.

ALL

Daily, Periodic, or Ad Hoc Reporting (ETL, Report, Dashboard)

Movement of data between domains to create a single source of truth for reporting and dashboarding. Includes key metrics such as revenue analytics and other KPIs

Technology:

Payment Processing software is provided by a handful of companies that ensure a secure, encrypted connection to their system, and typically have tiered fraud filtering systems as an upgrade path.

Key Payment Processing Vendors

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ESSENTIALS

Founded: 2006
HQ: Amsterdam, Netherlands
Company Type: Public
Website: www.adyen.com 
Delivery Method: Cloud

OVERVIEW

Adyen is designed for “any business and every customer journey”. Adyen allows businesses to stretch into new markets and increase their revenue through increased conversions, local acquiring, and new payment methods. Adyen offers POS payment systems as well as online and in-app payments so a business can drive revenue 24/7. Adyen utilizes varying payment methods, local connections to lower fees, transaction optimization via machine learning, and security to mitigate risks.  

PRODUCT & SERVICES:

  • Payment Processing
  • Insights, Reporting, and Dashboards

TARGET MARKET

Adyen targets companies of varying sizes. Currently, Adyen services 8 of the 10 largest U.S. Internet Companies.  

CUSTOMERS

  • Lush
  • Facebook
  • Uber
  • Netflix
  • Spotify
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ESSENTIALS

Founded: 1996
HQ: American Fork, UT
Company Type: Public
Website: www.authorize.net 
Delivery Method: Cloud

OVERVIEW

Authorize.Net a Visa Solution, is designed to simplify the payment processing process. Authorize.Net offers 7 payment processing features: Advanced Fraud Protection, Customer Information Management, Payment Types, Recurring Payments, Account Updater, Digital Invoicing, and Simple Checkout. These features simplify the payment process for eCommerce, Point of Sale, mobile payments, phone payments, billing, eCheck, and mobile card readers so a business can “sell more, sell faster, and sell safely”.  

PRODUCT & SERVICES:

  • Payment Processing
  • Advanced Fraud Protection
  • Customer Information Management
  • Payment Types
  • Account Updater
  • Digital Invoicing
  • Simple Checkout

TARGET MARKET

Authorize.Net targets companies of varying sizes. 

CUSTOMERS

  • OptimizePress
  • LensDirect.com
  • JotForm
  • HyCloud Computing
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ESSENTIALS

Founded: 2007
HQ: Chicago, IL
Company Type: Privately Held
Website: www.braintree.com
Delivery Method: Cloud

OVERVIEW

Braintreea PayPal Service, aims to helps businesses increase their revenue through their payment processing services. Braintree payment processing solutions will streamline operations, utilize the power of the PayPal platform, increase sales and revenue, and keep at risk data secure.  

PRODUCT & SERVICES:

  • Payment Processing
  • Data Security
  • Recurring Billing
  • Integrations

TARGET MARKET

When Braintree first became relevant, they targeted companies who fit a certain revenue quotas and profiles. Now Braintree targets organizations of any size 

CUSTOMERS

  • StubHub
  • Dropbox
  • GitHub
  • Yelp
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ESSENTIALS

Founded: 1979
HQ: New York, NY
Company Type: Public
Website: www.chasepaymentech.com
Delivery Method: Cloud

OVERVIEW

Chase Paymentech is a web-based merchant service allowing retailers to accept payments in store, online, or on the go. Paymentech also provides web-based access to transaction data, advanced web-based reporting, an online chargeback interface, and optional fraud management tools. 

PRODUCT & SERVICES:

This offering allows the user to: 

  • Reconcile payment operations using daily, weekly, or monthly financial reports 
  • Manage chargeback online with 24/7 access to comprehensive transaction data 
  • Reduce errors resulting in chargebacks 
  • Control employee access to customer and business-related information 
  • Create customized fraud filters to manage risk 

Paymentech screens for high-risk transactions, electronically captures, stores, and exchanges chargeback documents, and provides direct contact numbers for card issuing banks. 

TARGET MARKET

Chase Paymentech tends to target companies of all sizes, including enterprises, which are in need of data management tools. 

CUSTOMERS

  • Valley Ranch Pet Clinic 
  • David Mayhew Photography 
  • Skin Sanctuary 
  • Irina's Alteractions 
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ESSENTIALS

Founded: 1994
HQ: Foster City, CA
Company Type: Privately Held
Website: www.cybersource.com
Delivery Method: Cloud

OVERVIEW

CyberSource is a Visa, Inc. company providing an e-commerce credit card payment gateway. This company works with over 400,000 medium-to-large sized merchants worldwide to process online payments while utilizing fraud and security management. 

PRODUCT & SERVICES:

Featured solutions include: 

  • Global Expansion 
  • Mobile and Cross-Channel Payments 
  • Streamlining PCI Management 
  • Optimizing Fraud Management 

CyberSource also provides implementation and maintenance support, as well as merchant and partner payment management solutions. 

TARGET MARKET

CyberSource tends to target enterprise companies such as manufacturers, service businesses, and education and e-government entities, as well as medium-sized businesses. 

CUSTOMERS

  • Traveloka 
  • LINE Thailand 
  • China Eastern 
  • Qunar 
  • Television Broadcasts Limited (TVB) 
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ESSENTIALS

Founded: 2011
HQ: London, UK
Company Type: Private
Website: www.gocardless.com
Delivery Method: Cloud

OVERVIEW

GoCardless is designed for enterprise and small businesses to collect recurring payments, monitor fraud risks, collect one-time payments, streamline invoices, and offer subscription collections. GoCardless has the options to integrate with powerful software such as Salesforce, Zuora, Chargebee, Recurly and more. GoCardless also offers the ability to collect payments from anywhere in the world with international collections.  

PRODUCT & SERVICES:

  • Payment Processing  
  • Fraud Monitoring  
  • API integrations 
  • Payment Monitoring 

TARGET MARKET

GoCardless is targeted toward large enterprises and small businesses with options to cater to both needs.  

CUSTOMERS

  • DocuSign 
  • Deputy 
  • Epson 
  • Propel by Deloitte 
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ESSENTIALS

Founded: 2010
HQ: Oakland, CA
Company Type: Public
Website: www.marqeta.com
Delivery Method: Cloud

OVERVIEW

Marqeta is a modern card issuing and processing company that utilizes an opeAPI platform. Marqeta allows companies to create and issue virtual or physical payment cards with customizable options such as spend controls. The benefits to the custom cards are numerous but not limited to fraud control, fast reconciliation, instant payments, custom card experiences, and zero balance cards that free up capital.

PRODUCT & SERVICES:

  • Payment Processing  
  • Card Issuing 
  • Expense Management 
  • Digital Banking 
  • Fraud Detection 

TARGET MARKET

Marqeta is targeted toward large global enterprises or up and coming startups.

CUSTOMERS

  • Affirm 
  • DoorDash 
  • Uber 
  • Instacart 
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ESSENTIALS

Founded: 1998
HQ: Palo Alto, CA
Company Type: Public
Website: www.paypal.com
Delivery Method: Cloud

OVERVIEW

PayPal is a payment processing software that utilizes various payment methods such as: Buy-now-pay-later, check out with cryptocurrency, touch-free payments, and exploring ways to split bills, send money, and connect with people.  

PRODUCT & SERVICES:

  • Payment Processing 
  • Check out with Cryptocurrency 
  • Money Management 
  • Streamline operations 
  • Cash Back 
  • Risk Management 

TARGET MARKET

PayPal is targeted toward enterprises of any size and personal use.  

CUSTOMERS

  • GrubHub 
  • Pottery Barn 
  • Hulu 
  • Spotify 
  • Ulta 
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ESSENTIALS

Founded: 2009
HQ: Palo Alto, CA
Company Type: Privately Held
Website: www.stripe.com
Delivery Method: Cloud

OVERVIEW

Stripe is geared toward online payment processing for e-business. Stripe utilizes a slew of features built on an easy-to-use platform with prebuilt integrations. The company offers fraud protection, invoicing, issuance of physical and virtual cards, financing options, and business spend management. The Stripe product is the backbone for online and in person shop operations, subscription-based businesses, and software platforms.  

PRODUCT & SERVICES:

  • Payment Processing  
  • Card Issuing 
  • Expense Management 
  • Invoicing 
  • Fraud Detection 

TARGET MARKET

Stripe is targeted to companies of all sizes which ranges from start- ups and Fortune 500 companies.  

CUSTOMERS

  • Amazon 
  • Slack 
  • Zoom 
  • Lyft 
  • Shopify 
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ESSENTIALS

Founded: 1958
HQ: San Francisco, CA
Company Type: Public
Website: www.visa.com
Delivery Method: Cloud

OVERVIEW

VISA is a multinational financial services company with dominance in payment processing. VISA is a global leader in connecting global economies and leads strongly in digital payments. VISA offers businesses the ability to offer many forms of payments such as Click to Pay, Tap to Phone, Contactless Payments, and Installments.  

PRODUCT & SERVICES:

  • Payment Processing  
  • Card Issuing 
  • Consulting 
  • Analytics 
  • Invoicing 
  • Fraud Detection 
  • Expense Management 

TARGET MARKET

VISA is targeted toward individuals and companies of all sizes.  

CUSTOMERS

  • Athleta 
  • Banana Republic 
  • Starbucks
  • Fandango 
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ESSENTIALS

Founded: 1971
HQ: Cincinnati, Ohio
Company Type: Public
Website: www.worldpay.com
Delivery Method: Cloud

OVERVIEW

Worldpay is a payment processing company with a global reach. Worldpay has a mission to help grow businesses and streamline the payment experience through accepting more payments, securely, on a global scale. The company offers B2C, B2B, Omnichannel, and Enterprise options to accept a wide variety of payments, at any time, with many integration options. 

PRODUCT & SERVICES:

  • Payment Processing  
  • Fraud Detection 
  • Expense Management 
  • Business Insights 

TARGET MARKET

Worldpay is targeted toward Enterprises, small, and medium-sized businesses.  

CUSTOMERS

  • Jamba Juice 
  • Clarks 
  • China Southern Airlines 
  • Experian 

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