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What are end-to-end payments?
End-to-end payments are transactions processed using a single, comprehensive system that covers every stage of the payment journey—from initiation and authorisation through to settlement. Unlike payment processing systems that rely on multiple third parties and separate platforms to function, end-to-end payment processing consolidates each aspect of payment processing and management into one seamless interface.
With end-to-end payment processing, also known as “full stack” payment processing, the payment services provider serves as the payment gateway, acquirer, and payment processor. These three crucial roles are wrapped into one unified service, streamlining the payment process, freeing up resources, and improving customer experience.
Benefits of end-to-end Payments
End-to-end payment processing has many advantages, not just for merchants but for their customers as well. By increasing efficiency writ large, both sellers and shoppers benefit from a more seamless and secure payment experience.
1. Higher transaction success rates
With traditional, more fragmented payment processing, issues often arise due to poor communication between the various parties, clashes in data formats, and differing security standards. With end-to-end payment processing where just one payment processor oversees the entire transaction flow, there’s much less room for error. The result? Much higher payment acceptance rates.
Your acceptance rate is the percentage of transactions successfully processed and approved compared to the total number of transactions attempted. Having your gateway, acquiring bank, and processor all under the same roof allows the system to communicate consistently and clearly with the issuing bank. Moreover, without the involvement of third parties, more data can flow through each stage of the transaction. All of this means fewer errors and more completed transactions.
2. Quicker, more seamless customer experience
By reducing the number of players involved, an end-to-end payment system allows data to flow quickly through each stage of transaction. There’s much less time spent waiting for authorisation approvals and confirmations from the payment processor. A unified system reduces the likelihood of errors and delays, leading to an all-around faster checkout experience for customers both online and in store. This not only leaves customers feeling more satisfied but, for online transactions, it can also prevent customers from ditching the purchase altogether, clicking out of the app or browser window before the transaction has had time to finish.
3. Improved data analytics and reporting
With end-to-end payment processing, the merchant is granted full access to all data generated throughout the payment cycle. With a more siloed system, where data is fragmented across different systems, it’s more difficult or even impossible for merchants to accurately analyse their sales information.
With this increased access usually comes better reporting tools and analytics platforms that make it easy to understand the story your payment data is telling. For example, many end-to-end payment service providers give merchants access to a dashboard with customisable graphs and charts that help visualise sales data. Merchants can use these tools to get a better understanding of which products and services are most successful, and to devise marketing strategies informed by consumer trends.
4. Streamlined operations
The efficiency of end-to-end payments has a positive knock-on effect for a company’s general business operations. It frees up time and energy otherwise spent on managing multiple parties within the payment process and analysing fragmented data. It streamlines workflows for employees across nearly all areas of the business, including IT, marketing, accounting, risk management, and product developers.
End-to-end payment processing is an opportunity to tighten and consolidate a crucial component of business operations and the impact is exponential.
5. Cost-efficiency
There are a few reasons why end-to-end payment solutions end up being more cost efficient for merchants. Firstly, streamlining payments into a single platform reduces the time it takes to manage and analyse incoming payments. This frees up resources and cuts back on costs associated with hiring additional personnel.
Switching to end-to-end payments also consolidates payment processing costs into a single bill, paid to just one company. This makes it easier to stay on top of all costs and fees involved. When you’re working with multiple third parties to facilitate the payment process, it’s easy to costs to spiral. End-to-end payment processing offers merchants a simple and transparent fee structure.
6. Fraud prevention and risk management
An end-to-end payment processing system operates under a single, unified set of security protocols. Compared to a more siloed system, there are much fewer opportunities for essential security measures to be overlooked or skipped altogether. When security is overseen by a single entity, it’s much easier to manage and update security protocols, leading to increased fraud prevention and more secure transactions.
A high-quality, full stack payment services provider will integrate strict verification measures and real-time fraud detection tools designed to highlight suspicious transactions and prevent them from progressing any further.
7. Flexibility, scalability, and future-readiness
Merchants also prefer full stack payment processing for its ability to adapt and grow with their business. In a more fragmented system, it’s common for one or more of the parties involved to lag behind in its technological capabilities, security protocols, and merchant support services. When one of the players involved is weak, the entire system is weak. Any minor issues that arise quickly become serious issues as the business grows and broadens its reach.
For example, if a business wants to expand into new markets, yet its payment gateway doesn’t allow for automated currency conversion, the growth potential is instantly stifled. Similarly, if business is booming and the payment processor doesn’t have a responsive support team available to help merchants troubleshoot, the entire system breaks down. By switching to a well-regarded end-to-end payments provider, merchants can rest assured knowing that their payments system will keep up with their changing needs.
How end-to-end payment processing works
End-to-end payment processing works by having one single payment services provider act as the payment gateway, acquirer, and payment processor. Each transaction undergoes the following step-by-step process.
Step 1: Cardholder initiates the transaction by tapping their card or inserting their card into the card terminal at the point of sale or, for online transactions, entering their payment information and clicking “purchase.”
Step 2: A request is sent to the acquiring bank, the financial institution which manages the movement of funds on behalf of the merchant.
Step 3: The acquiring bank, also known as the “acquirer,” forwards the request to the payment processor to facilitate the authorisation process with all parties involved.
Step 4: The relevant card network (Visa, Mastercard, etc.) requests the funds from the cardholder’s issuing bank, which can either authenticate or decline the transaction.
Step 5: If the funds and cardholder are verified successfully, the issuing bank sends its approval to the card network, which then forwards the approval to the acquirer.
Step 6: The acquirer informs the merchant that the transaction was approved and has been completed.
End-to-end payment provider features
When researching end-to-end payment providers, look for a company with experience in your sector, good reviews and a positive reputation, flexibility and customisation, and an accessible customer support team.
In terms of specific features and capabilities, be sure that the provider offers the following:
Payment processing for each channel that your business uses (e.g. online, mobile app, in-person, unattended, etc.)
Knowledge of and support for the regions in which you operate, including currency conversion capabilities.
Robust analytics and reporting tools to help you better understand and drive your business.
PCI DSS compliance and strict data security measures such as data encryption, multi-factor authentication, 3D Secure, biometric verification, real-time fraud detection, etc.
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