COMMENTARY: The Case for Integrated Payments Providers

If there’s a software need for your business—accounting, payroll management, lease portfolio management, and the like— then it’s likely your business is working with several different vendors at any given point during the working day. All the vendors you are working with won’t always be obvious, particularly if you’re working with managed-service providers (MSPs.) These act as an executive assistant, helping you manage several other necessary vendor relationships on your behalf while you only deal directly with the MSP itself.

However, when it concerns payment processing, this convenience can become a hassle, even if, on the surface, it appears you are only dealing with one vendor. In this case, the multiple vendors operating behind the scenes create multiple chances for failure and confusion, from reporting and reconciliation to troubleshooting problems when processing goes wrong.

Perhaps this not a big deal if you need to troubleshoot a less critical business function. But it’s not hard to understand how these types of issues in payments-related functions can quickly snowball to the detriment of your business. Then there are the hidden costs and expenses of multiple vendors, and whether you are paying more per transaction than you should be, as your transactions are not qualifying for the lowest cost.

For businesses considering payments-technology solutions, the best option is to go with an integrated payments provider. In the past, companies didn’t have many good integrated vendor options available. However, nowadays, integrated payments providers are more readily available for businesses both large and small.

As a business owner, you’ll likely feel hesitant to consolidate your payments vendors after years of satisfactory service. Or in the same vein, you may be worried about going all-in with an integrated provider, given how much payments technology has changed for merchants over the past several years. However, there are numerous reasons why an integrated payments provider makes sense compared to managing several interconnected vendor relationships.

First and foremost, integrated providers are agile. That means they can better support new features required by your customers and ensure that their payments offerings support new initiatives from the payment networks. When dealing with multiple payments vendors for different offerings, all it takes is one vendor slow to update its solution or platform to badly impact your operations. Conversely, integrated providers can quickly update their offerings as needed.

These providers also tend to provide much greater reporting capabilities, ensuring you spend less time pulling and analyzing financial reports from different vendors. This efficiency will help mitigate the anxiety that can come with financial reporting. In the long run, it’s going to significantly reduce the chance of an overlooked accounting or processing error that could lead to time-consuming reviews and payment disputes.

On a more technical level, integrated providers make compliance with security and industry standards much easier than when dealing with multiple vendors. Consider that, for each vendor your business works with, you need to understand whether that vendor’s role involves collecting, storing, or processing full cardholder data. Then, when your business completes the required annual Payment Card Industry Data Security Standard (PCI DSS) questionnaire, you must describe each vendor’s role in the payments process and disclose whether the vendor handled cardholder data.

What’s more, you have to list what each vendor’s associated PCI status is. With an integrated PCI-certified provider, your business saves the time needed to understand and list each vendor separately, allowing you to move on to other tasks.

Perhaps most important, the customer-satisfaction benefits of working with an integrated provider stand out. Integrated payments providers are much better-equipped to streamline your interactions with customers. This can include enabling you to easily email customer receipts, securely store customers’ credit card information via tokenization, and set up automated recurring billing. You can leverage these data points so customers receive the type of assistance they both want and need.

With the speed that the payments industry has evolved over the past several years, it’s very easy to find yourself locked into a web of relationships with independent payments vendors, all focusing on different points in the payments chain. But this isn’t an intractable problem. Rather, shifting to an integrated payments provider is easier than ever. And as a business, you won’t have to wait long to see the benefits.

Penny Townsend is chief product officer and co-founder of  Qualpay, San Mateo, Calif.