Enterprise businesses need to know if their payment processor is up to the unique challenges they face. Use our payment processor guide to see if yours checks the right boxes.
Enterprise businesses like yours face a unique set of challenges. High volumes of payments in multiple markets can easily get complicated. Global aspirations may not always be supported by your current tech. And you always want to stay up to date on the latest payment trends. These challenges can leave you wondering if your current provider checks all the right boxes —Not to worry, our payment processor guide can help you figure it all out.
A payment processor is an intermediary between all of the parties involved in making a payment. They help businesses facilitate credit card, debit card, ACH, and other payments. Payment processors take the payment information customers input online or in-store and send it between banks, credit card networks, and the business, which verify the information and authorize the transaction. Then the payment processor finalizes the payment.
You need a payment processor to start taking payments for a business. But processors are more than they appear, especially for large enterprises. Beyond simply being an intermediary, your payment processor can:
Your payment processor is in a position to be a valuable collaborator for your business. If yours isn't doing all of the above, it could be time to revisit which payment processor is best for your enterprise.
A payment processor will handle the heavy lifting when it comes to accepting payments. But what really goes on behind the scenes? This part of our payment processor guide goes over the five key players involved in the process.
The buying process starts with the customer. They're the ones making the purchase, providing their payment information, and ultimately clicking “buy.” Today's customer expects fast, frictionless payments and if a store doesn't approve their transaction, or doesn't have a good mobile experience, they may look elsewhere. Trust, simplicity and speed are the top reasons for consumers surveyed to make an online purchase with PayPal.1
The issuing bank (sometimes called the issuer) is the financial institution that provides the customer with a debit or credit card. The customer’s issuing bank pays your business by depositing funds in your merchant account.
In order to accept online payments, your business needs to open a merchant account, which you can do either through an acquiring bank (sometimes called a merchant acquirer or acquirer) or through some payment processors, like PayPal. When a customer's payment is authorized, the funds will transfer to your acquiring bank and likely land in your merchant account within a few days. While your business is still responsible for monitoring things like fraud, chargebacks, and compliance, the advantage to collaborating with a payment processor is that it can make these responsibilities easier. For example, payment processors typically support a wide range of payment methods, including credit cards, debit cards, and alternative payment methods. This enables businesses to reach a broader audience and cater to customers using different payment preferences and methods across the globe.
The payment gateway is essentially the customer-facing part of the payment process. It securely connects your website’s checkout page, where the customer enters their payment information, to the processing network. It then returns the network’s responses back to the website and the payment is either approved or denied.
The payment processor takes the information from the payment gateway and handles the authorization and settlement with the banks and credit card networks involved in the transaction. While some businesses use separate vendors for their merchant account, payment gateway, and payment processor, companies like PayPal can take care of all three. Having a direct, streamlined relationship with your payment processor in this way can help you improve your efficiencies and drive top-line growth in new ways.
There’s a lot that goes into successful payment processing, but it’s not as complicated as it sounds. Let's go over simple payment processing steps to see how it works:
Customers may expect all of this to take only seconds. It's easy to see why your choice of payment processor may make a big difference in the success of your transactions — and your business. So how do you know if yours is providing everything you need?
Direct payment processors are more than a “set it and forget it” necessity — they can be a revenue generator. Check out the infographic below to determine if your payment processor is a relic of the past or ready for the new era of payments. Then read on for a deeper dive into what really matters for enterprises.
At the enterprise level, most payment processors may offer credit and debit, Automated Clearing House (ACH), and the ability to process multiple currencies. But that may no longer be enough for many organizations: global cashless payment volume is expected to continue increasing through 2027.2 Businesses are smart to look at all of their payment method options.
Buy now, pay later (BNPL) is another important payment type due to its rising popularity. Global BNPL transactions are predicted to increase by $450 billion by 20264 and are the most popular in northwestern Europe I.5 There are plenty of BNPL options available, so it could be worth it to take a closer look, even if you already have a provider.
PayPal Pay Later offers several advantages that can impact a business's bottom line:
From gated checkouts and long forms to complicated payment methods and false declines, there are plenty of ways to introduce friction into the payments process. That means there are also plenty of ways to improve your checkout and delight your customers. The right payment processor can provide consistently great experiences across mobile, desktop, apps, and in-person, using features like:
The ability to quickly and securely send refunds, rebates, rewards, and commissions around the world is essential for many enterprises. Taking a “set it and forget it” approach gets the job done, but some of the best payment processors for ecommerce can help you find efficiencies and optimize your payouts. PayPal’s payout capabilities can:
Fraud is a big deal for enterprise organizations. In one survey, the organizations represented said they lose an average of $3.7 million per year due to fraudulent online transactions.11 The most common types of fraud were chargeback, account takeover (ATO), and transaction fraud.12 Your payment processor can help with these issues by:
Enterprise businesses are often looking to scale their business and reach new customers, and they should ensure that their payment processor will support their entry into new markets. A truly global payments platform provides local payment capabilities as well as support. For example, PayPal can help you to:
Frictionless payments aren’t just about the front end customer experience. You want top-performing authorization rates on the back end to help drive revenue for your business. Using processing tools like payment vaults, account updater, and network tokenization helps keep card data fresh and accurate to drive authorization rates. PayPal’s network processed 6.3 billion payment transactions in Q3 of 2023 alone,13 providing us with unique data from both customers and merchants that continues to enhance our authorization process.
All those happy customers won't be able to make a purchase if your payment processor isn’t operational. If payment technologies crash during times of high volume, like Black Friday or the first day of ticket sales for an event, so could your revenue.
Enterprises shouldn’t have to settle for legacy platforms and hard-to-integrate technology that slows them down just when they need to be more agile and adaptable. Even high volume payment processors with a comprehensive suite of solutions and massive global scale can provide flexible solutions that won’t overwhelm your team. For example, PayPal can:
At the end of the day, which payment processor is best for enterprise organizations may not be the same as those that work well for small and medium-sized businesses. Look to a payment processing guide that addresses your specific challenges — and look to a payment processor with the expertise to solve them. Download this checklist for easy reference during your search, and remember, we’re here to help.
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