What Are Integrated Payments?

Integrated payments refer to a software company integrating payment processing directly into its software that a small business is using to run its business. Once the integrated payments are added, a business can easily accept payments from customers directly through their own platform or software rather than relying on a separate payment gateway or provider.

Integrated payments are typically made possible through the use of APIs (application programming interfaces), which allow different software systems to communicate with each other. By using a software program that has an integrated payment system, businesses can streamline their operations and provide a more seamless customer experience.

Integrated payments take many forms, depending on the specific needs of the business in question. They can be used in various contexts, such as e-commerce platforms, mobile apps, and software applications.

Here Are Some Examples:

  • An e-commerce platform might integrate payment processing into its checkout process. So rather than sending a customer to Stripe or PayPal, they can check out directly through an asset they own. 
  • A small business might integrate payments into its accounts receivable process. For example, Sea Breeze Syrups partnered with PaySimple and was able to automate their payment processes and improve their cash flow.
  • A social media platform might allow users to purchase products or services from within the platform, without having to use a credit card. For example, Instagram has started doing this with the release of “Instagram Shopping.” 
  • A mobile app might offer in-app purchases or subscriptions. For example, Candy Crush Saga charges $0.99 for extra lives, and Clash of Clans charges $4.99 for a Pile of Gems.

Payments acceptance that is integrated directly into the software a business uses is powerful for businesses because it can help accelerate cash flow, and increase accounts receivable processing, among other things. 

How Do Businesses Benefit from Integrated Payments?

There are many benefits of integrated payments for businesses. Here are some of the most important:

1. Streamlined Operations

According to The Data Warehouse Institute, data entry can cost businesses over $600 billion annually. By using software systems with integrated payment processing, businesses can streamline their operations and reduce the need for manual processes or data entry. This can help to save time and money by reducing the risk of errors or inaccuracies. 

2. Improved Customer Experience

Research by Tink regarding consumer online payment expectations found that 88% of customers are willing to abandon a transaction if they experience some form of friction. Having an integrated payments solution provides a more seamless experience for customers, allowing them to complete transactions without being redirected to a separate payment gateway.

This improves customer satisfaction and loyalty, and can reduce cart abandonment rates. 

3. Providing Customers with Options

Having an integrated payment system opens up additional payment options (such as mobile payments, online payments, and even the ability to sell and accept gift cards). Giving customers additional options takes the hassle out of paying, which reduces friction for customers.

Research from Business News Daily has found that gift cards have many benefits to businesses, including opening up new customer opportunities when a gift card is given and improving cash flow.

If your business offers a business subscription option, then you also increase cash flow for yourself with a recurring payment solution feature.

4. Increased Security

Integrated payment systems typically offer advanced security features, such as encryption and fraud detection, which can help protect businesses and their customers from potential fraud or data breaches. According to CNBC, this is vital because cybercrime could cost $10.5 trillion by 2025.

5. Lower Costs

Businesses can reduce their payment processing fees and other associated costs by eliminating the need for a separate payment gateway or provider. While processing fees may seem inconsequential, as your business grows, those fees can start to add up. Having an integrated payment solution reduces those fees.

6. Less Room for Error

According to a report from IBM, bad data costs U.S. businesses more than $3.1 trillion annually. In addition, because the process is automated when you accept payments directly, there is less room for human error that could come from cash transactions or entering payment data manually. 

7. Enhanced Reporting and Analytics

Integrated payment systems provide businesses with detailed reporting and analytics directly integrated into the software they are already using, allowing them to easily track sales, revenue, and other key metrics. As management professor Peter Drucker always said, “You can’t manage what you don’t measure.” 

8. Improved Decision-Making

Intuition can be helpful, but sometimes it can mislead us. For example, with integrated payment systems, there are copious amounts of data available in real-time. Access to this data helps business owners see trends in real-time and make strategic data-driven marketing and operations decisions instead of relying on intuition and guesswork. 

9. Time Savings

By automating a large portion of the payment process, businesses reduce the person-hours needed in the accounts receivable department to review payment information. As we all know, “time is money,” so this can free up additional cash flow to help in areas where the business can grow. 

The Bottom Line

Overall, partnering with a software provider that has integrated payments can help businesses operate more efficiently, improve their bottom line, and provide a better customer experience. So if your software doesn’t have integrated payments, now is the time to consider if it is the right solution for you and your business.