And there is great speculation as to whether Apple Inc., Google Inc. or Amazon.com Inc. will swoop in and take control of processing payments on phones. But often glossed over is the business aspect.
Apple, Google and Amazon are chasing consumer phones as businesses are watching from the sidelines. Businesses certainly do value mobile payments, especially those that can sell their products and services remotely. Think Girl Scouts selling cookies and taking credit cards on mobile phones. But the bigger value for businesses is seamlessly integrating payments data into their back-office systems, whether the payment came from a mobile phone, retail storefront, order placed over the phone or through the firm’s website.
The challenge for most companies is staying competitive. That means constantly seeking ways to remove costs and improve revenues. That doesn’t start with mobile payments; it starts with integrating the payments environment. Ten considerations can guide financial executives in trying to achieve an efficient and productive integration.
1. Improve Cash Flow. By integrating all points of payment directly to the bank for settlement — and to the accounting system for reconciliation — cash flow is maximized. Sitting on checks and receipts minimizes cash position, which can impact a company’s liquidity.
2. Optimize Sales Channels. Any payment method — whether a credit card terminal, e-commerce website or mobile phone equipped to take payments — that’s not integrating directly within the business’s accounting system isn’t optimized for sales execution and back-office efficiencies. As a result, it’s increasing the cost of sales.
3. Eliminate Manual Data Entry. Manually entering data in both a point-of-sale solution and an accounting solution doubles the time it takes to complete the payments process. By integrating the payments environment, time spent on accounts receivable processing can be reduced, allowing more time to be spent on revenue-generating opportunities.
4. Automate the Reconciliation Process. Duplicate data entry results in more manual errors, which has to be untangled and reconciled. When payments automatically “post back” to the accounting system, errors are reduced and posting and reconciliation are streamlined, saving time and money.
5. Organize the Payments Environment. The payments industry is highly fragmented and confusing. An advanced, integrated payments portal can offer Web and mobile access to a reporting dashboard, merchant statement, billing support, a single toll-free customer support line and administration of all connected payment devices, applications and services.
6. Improve PCI Compliance. Payment platforms certified by the Payment Card Industry (PCI) can improve PCI compliance as a merchant. These platforms remove connected payment solutions from the scope of PCI by ensuring all connected payment solutions never store or transmit unencrypted credit card data. In return, the PCI audit is more streamlined. Importantly, the business is secure and customer data remains safe.
7. Improve the Audit Position. Manual processes increase auditor scrutiny and require additional sampling of data and processes, driving up costs and use of resources. Automating the processes can cut costs of financial and regulatory audits.
8. Gain the Value of Consolidation. An automated and integrated payments environment is often offered by a single vendor or consortium, creating price efficiencies across a spectrum of payment services while reducing the cost and complexities of managing multiple vendors.
9. Take Advantage of What’s Next. An extensible, integrated payments platform is more capable of adding advanced features and solutions, such as mobile payment apps, automated invoicing or integrated loyalty systems. Traditional merchant accounts are standalone solutions that don’t “connect” or offer opportunities to add integrated payment services.
10. Because You Can. High costs and heavy information technology requirements for building custom solutions have previously made integrated payment systems an option for only larger businesses. Now, business software providers are bringing pre-integrated payment solutions to market so small and mid-sized businesses (SMBs) can easily and cost effectively “turn on” an integrated payments environment from inside select accounting or enterprise resource planning solutions.
This article first appeared in Financial Executive magazine.