Using an API-led integrated digital payments gateway brings new opportunities for Independent Software Vendors (ISVs) to capitalise on emerging business models and add value to existing clients, argues Patrick Bermingham, CEO of Adflex.
In today’s competitive commercial environment, innovation and disruptive ideas are changing the business model across many industries.
A subscription-based approach for purchasing goods and services is becoming prevalent in business-to-consumer (B2C) and business-to-business (B2B) markets.
Cloud-based platforms are transforming the way businesses and customers interact. But this doesn’t lessen the complexity when it comes to the payments ecosystem.
Trading practices and business models differ widely from sector to sector, each with their own charging structures to deal with. In B2B payments it can be a fragmented cycle.
This presents opportunities for Independent Software Vendors (ISVs) to capitalise on new business ideas in commerce but also to improve the business tools they create by incorporating integrated payments processing.
By partnering with an integrated payment gateway provider, ISVs enable their clients to expand payments processing into a seamless flow of activity to process, reconcile and record payments into an existing platform interface.
ISVs that offer payments gateways capable of offering maximum versatility can empower their clients to do business quickly and seamlessly with as wide a range of customers and partners as possible.
Today, there are many touch points in manufacturing, business processes and the supply chain where an ISV can introduce digital payment integration to create value-added efficiency and simplicity in purchasing and payment acceptance.
The right integrated payments solution leverages state-of-the-art APIs, making it a fast and simple way for ISVs to integrate digital payments capabilities into their core offering. Take the example of just-in-time manufacturing. Software running process control logic units, for instance in automotive, engineering or food processing, triggers alerts for procurement of goods or services needed for delivery to the production line. That same trigger could be enhanced to include an integrated payments gateway, enabling instant card payment to the supplier.
Alternatively, a manufacturer could use this payment alert to request bids and offers from a wider connected marketplace, helping to drive greater cost efficiency. The digital payment sequence would comprise elements that confirm the buyer has agreed to pay using a procurement card and issues an electronic invoice.
Specialist aspects of billing for goods and services in advance but which then require reconciliation to show accurate credit card records to avoid customer confusion is another problem overcome by seamless integration of payments processing, and importantly can prevent friction with customers.
And with the introduction this year of PSD2 open banking reform across Europe, there will be more change in B2B payments, with greater flexibility to set up bank-to-bank payments and take advantage of cheaper processing. ISVs can stay ahead of new developments in the payments ecosystem by working with a platform that has user-friendly APIs to connect into acquirers and payment service providers (PSPs).
But to maximise the potential from integrating payment gateways into their software solutions, ISVs need to address key challenges in satisfying security, compliance and convenience.
In selecting an integrated payments gateway to partner with, it is vital that this is fully accredited to Payment Card Industry (PCI) standards and offers point-to-point encryption to protect card and account holder data during the transaction. Features such as secure card tokenisation and embedded hosted services are equally important. All this eliminates friction for the ISV and its customers, removes the burden to provide PCI compliance and speeds up development time-to-completion.
An online payment gateway that delivers a better experience and simplifies integration will be driven by user-friendly APIs and developer tools. These ensure the freedom and flexibility to offer more agile solutions to satisfy omni-channel business transactions and payment methods – be it card, bank-to-bank, BACs or Direct Debit – all managed through a simple API.
More sophisticated gateways will incorporate value-added capabilities to benefit the ISV and enhance its relationship with customers. The option to brand the gateway provides a seamless payment interface, enabling the ISV’s client to present its own digital payment page and complete transactions from within its own environment. Stock control and management can be improved by allowing payment to be authorised when product supply is limited or out of stock, enabling call-off payment in stages and so removing the headache of fragmented order-to-delivery workflows.
Working with an integrated digital payments provider also opens up opportunities for an ISV to create an additional income stream. It is possible to agree revenue sharing arrangements which permit the ISV to receive commission on digital payments processed. Other APIs will enable a portal to view ongoing transactions and maintain oversight of revenue-generating activity. The same API can instead create a portal for the ISV’s customer to monitor transactions again helping to build a good user experience and seamlessly integrate with other applications in the client’s business management processes.
The future is one of ever more highly connected manufacturing, production and business workplaces where cloud-based services enable better management and financial control. As key players in this evolution, ISVs are ideally placed to take advantage of a perfect time for digital payments integration.
About the author
Patrick Bermingham is CEO at Adflex. He has over 20 years’ experience in the payments industry, overseeing the growth and development of Adflex as a premier B2B payments service provider. Prior to Adflex, Patrick was specialised in ERP system design and development primary targeting mail order and national distribution sectors.