A Guide to Streamlining Your eCommerce Payment Processing

Have you traded your brick-and-mortar storefront to sell your products and services over the internet? If so, you’re part of a growing number of businesses that are either complementing their storefronts with an eCommerce payment processing website or ditching physical locations in favor of online only sales.

While the trend towards eCommerce shopping has created opportunities for businesses to reach a larger target market and increase revenue, it has also resulted in payment processing challenges. Let’s explore how streamlining eCommerce payment processing can help you increase cash flow, reduce manual effort and errors, and improve customer experiences.

Why Streamlining eCommerce Payment Processing is Essential

eCommerce has opened the door to a growing number of digital payment methods that use a variety of devices and channels, resulting in complexities that were previously non-existent. While it provides numerous benefits for customers and businesses alike, it does come with its own set of challenges. Customers not only want but are increasingly demanding a seamless and easy purchasing journey, and businesses need to ensure their sites are profitable. To achieve both goals, eCommerce payment processing needs to be efficient and effective.

As eCommerce continues its upwards trend, payments made in this business model will grow in complexity. On the surface eCommerce payment processing appears simple – a swipe or a tap and payment is made, right? However, the digital payment ecosystem consists of several entities, including the payee, the payor, the credit card company, the financial institution, and the payment network. Properly managing the intricacies of digital payments requires streamlined processes and this is where automation plays a critical role.

By using technology to automate eCommerce payment processing, you’ll not only reduce manual effort and errors but increase profitability and improve the customer experience. Key functional areas to automate include billing and invoicing, taxation, revenue recognition, and collections.

6 Steps to Streamlining Payment Processing

Since the customer is at the heart of every transaction, the steps to streamlining eCommerce payment processing needs to ensure that every purchasing experience promotes customer loyalty. For instance, did you know that over 80% of online shoppers abandon their carts? Proven tactics to combat shopping cart abandonment include offering free or discounted shipping, optimizing your eCommerce site for all devices, shortening and simplifying the checkout process, being transparent about prices, offering multiple payment options, and promoting the site’s security measures.

Here’s how you can streamline each of the payment processing steps.

1) Provide Secure Payment Options

Payment gateways help payees initiate eCommerce, in-app, and point of sale payments for a range of payment methods. While it is not directly involved in the money flow, it often connects multiple acquiring banks and payment methods within a single system. Once a customer places an order, the payment gateway verifies the customer’s card details and confirms there are enough funds in the account for payment. Here are the five payment gateway steps:

1. The payor enters payment (credit/debit card, digital wallets, etc.) details, and clicks ‘buy’ or swipes/taps their card or mobile wallet.
2. The payment gateway checks to ensure that the information entered is correct and verifies that the payor’s bank has the available funds.
3. The payment gateway encrypts the transaction and sends it to the relevant card schemes.
4. If the transaction is approved, the payment gateway sends the information to the payee’s bank.
5. The payment gateway sends the information from the payor’s bank account to the payee’s bank account, completing the transaction.

2) Ensure secure transactions

Payment gateways, as well as other technologies provide security on multiple levels, including:

1. PCI DSS: Complying with Payment Card Industry Data Security Standards (PCI DSS), payment gateways improve security by minimizing the risk of data breaches, fraud, and identity theft.
2. Data Encryption: Conceals the data by making it unreadable to entities other than the payment gateway.
3. Tokenization: Using hashing, encryption, and secret keys, tokenization protects the payors credit/debit card information by converting the data into a security token.
4. SSL and TLS: A digital security feature, Secure Sockets Layer (SSL) and Transport Layer Security (TLS) protocols provide an encrypted connection between a server and a browser, ensuring the secure transmission of the customer data collected by the payment gateway.

3) Integrate with your eCommerce Platform

By integrating your payment gateway with your eCommerce platform you’ll not only streamline payment processing but reduce manual effort and errors and enhance the customer experience.

4) Simplify the purchasing flow

The goal of your eCommerce site is to ensure the customer completes the transaction. A user-friendly website helps in providing easy navigation. Additionally, eliminate ads or pop-ups within the checkout process and avoid redirecting customers to an external gateway. Once payment is made, automatically redirect them back to your homepage – where they can continue to shop.

5) Automate Invoicing

Be sure your invoicing software can easily integrate with your eCommerce platform. This not only expedites the invoicing process but reduces manual effort and errors. To truly streamline payment processing, automate all billing/invoicing processes, including billing, invoicing, payments, credits and refunds, taxation, revenue recognition, dunning, and collections.

6) Monitor Metrics

The data you collect can provide valuable insights into your payment processes, as well as customer behavior. It enables you to extract meaningful information and provides the ability to translate your findings into actionable payment processing strategies. There are three key business intelligence tools that you should monitor and leverage – analytics, reporting, and dashboards.

1. Analytics: By executing analytics on any data element, you have the ability to define, analyze, and evaluate the metrics that are important to your business. For instance, data analytics provides the information needed to track payment processing, including approval rates, transaction volume, processing time, etc. With these insights, you’re able to identify payment processing areas that are in need of improvement and optimize the processes. Additionally, you can use the data to analyze customer purchasing behaviors such as purchasing histories, shopping habits, demographics, etc., as well as customer churn rates, month-to-month purchasing variances, and revenue growth/decline.
2. Reporting: Reports provide the information needed to know how your business is performing, e.g., what’s selling, what products are bringing in the most revenue, which products aren’t selling, which products are resulting in revenue loss, etc. With the ability to manipulate data, apply filters, create pivot tables, and automate complex calculations, you have the tools needed to create custom reports and dashboards.
3. Dashboards: The dashboard wizard makes it easy to create customized views for real-time information. This convenient tool provides information at a glance, as well as enables you to create charts and graphs for a visual representation of your payment processing.

Streamlining eCommerce payment processing isn’t a one-and-done initiative. You may choose to incorporate a few steps at a time and use your data metrics to evaluate improvements, tweak the payment processes as needed and monitor the results.

Simplify and Streamline Your eCommerce Payment Processing

With over a decade of experience, BillingPlatform has intimate knowledge of the unique payment processing needs of eCommerce businesses. Known for market-leading innovation, we are at the leading-edge of payment processing technology and can help you simplify and streamline your eCommerce payment processing.

Our flexible billing solution provides all the tools you’ll need to improve your eCommerce business, increase cash flow and deliver frictionless customer experiences. We make this possible with an automated platform that delivers the agility needed to manage and grow your eCommerce business at scale. Take a quick self-guided tour today and learn more!