Reaping the benefits of integrated payments for B2B ecommerce

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With the exponential growth of ecommerce and mobile shopping, the competition for online sales is fierce. Customers expect fast and convenient shopping experiences. Every second counts — literally.

A study by Portent found that the highest ecommerce conversion rates occur with a page load time between 1 and 2 seconds, with rates decreasing an average of 0.3% for each additional second. In order to compete, business owners and developers must constantly optimize for performance, though speed is not the only factor that impacts online sales. A host of other important differentiators — such as user flow, ease of use, flexibility, security, and others — also require regular assessment.

One such area of assessment that is moving up on the priority list is the online checkout experience and the underlying technology that supports the payment process. ​​According to a recent survey conducted by S&P Global, 72% of C-suite respondents stated that modernizing payments infrastructure — such as adding new payment gateways and processing capabilities — will have a highly transformative impact on their business over the next three years. Meanwhile, 37% of merchants said their businesses plan to make investments payment processing investments over the next 12 months, positioning payment processing as a top-four area of commerce technology investment for merchants. For those doing business online, payment acceptance is no longer a simple matter of processing transactions. Instead, payments are now integral to a business’s success and key to its overall strategy.

Integrated payments is a term coined to describe embedding the payment process within the user flow so there is no interruption in the checkout experience. Utilizing this approach reduces friction, eliminating unnecessary barriers to the sale.

For example, a redirect to a third-party payment site or an inability to accept a customer’s preferred payment method would introduce friction to the checkout process, making consumers more likely to abandon their shopping carts. Shoppers who are diverted to a payment website that does not match the original brand’s look and feel may become confused and abandon the sale.

Likewise, ecommerce businesses should not underestimate the importance of accepting the latest payment methods, such as digital wallets, which offer the ability to check out in just a few clicks — making completing a purchase quick and convenient. In this case, mobile shoppers are more likely to abandon their cart if unable to use a digital wallet, forcing them to enter credit card details. Ultimately, optimizing payment processes can make a significant impact when it comes to improving the customer’s experience, increasing the likelihood of a successful transaction.

Another added benefit to this model is that payment processes are connected to back-office infrastructure — tying transaction data to internal software systems, such as accounting, CRM, ERP, and other applications. Typically, this integration is accomplished by using a payment gateway that facilitates payment processing while also linking payment systems to other software. This gateway creates a constant flow of transaction data to all systems automatically — resulting in not only improved customer experiences but also a myriad of other business benefits, including increasing savings and greater efficiency. Here are a few of these critical benefits in more detail:

As data flows from one system to another in real time, there is no need for the manual data entry that would likely occur if payment systems were not integrated with other administrative solutions. By eliminating this task, administrative costs are reduced, and time is freed up to work on more business-critical projects.

Integrated payment solutions also allow for more efficient reconciliation. Matching payments with the right deposits and invoices is time-consuming and tedious, especially if you have multiple merchant accounts and vendors. With an integrated system, transaction information syncs with other critical accounting systems. This makes it easier for business owners to monitor cash flow and ensure accurate records.

A reduction in errors is another key benefit of embedded or integrated payment processing. With manual data entry, a single error replicated across multiple systems can cause a slew of other problems for accounting, inventory management, or other processes. Business owners are forced to double back and find out where things went wrong, inevitably taking time and money to fix the mistake. As a business expands and processes more transaction data, it becomes even harder to keep up with manual data entry — a mistake at this stage is incrementally multiplied. An integrated payments solution removes this risk because all systems can communicate with each other in real-time.

Without payment integration, data variations across back-office software may result in poor or inaccurate business intelligence. An integrated payments solution delivers a single source of truth. With all customer and transaction data centrally stored and managed, businesses can have greater confidence when generating earnings reports, drafting budgets, and conducting forecasting.

Laying the groundwork for efficient payment processes and systems reduces growing pains as a business scales. While many new apps and startups can get bogged down by the problems created by disconnected payment processes and systems, online businesses that implement an integrated payments system can grow unencumbered. Lowered costs, improved reconciliation, reduced errors, and greater data accuracy provide online businesses with scalability.

With the capacity to reduce friction and improve conversions, plus the potential to reap a multitude of business benefits, it’s easy to see why many executives and business owners are planning to modernize payment infrastructure. More than just a means to transfer money, an integrated payments solution delivers a competitive advantage for ecommerce businesses and is becoming a vital component of a winning business strategy.

Blake Rouse is senior director of business development at Cardknox, a payment technology provider. He has worked in the fintech industry for more than 14 years and can be reached at [email protected]. 

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