How to integrate digital payments into Magento
From the first recorded digital payment in 1994, the movement of money throughout the global economy has undergone tremendous developments and changes. While the vast majority of consumers have paid for goods and services online with credit cards or bank transfers, today, the concept of money is still evolving as cryptocurrencies continue to see widespread adoption. Whole industries have grown up around blockchain technology, cybersecurity services, biometric authentication, and more.
However, for many in the B2B world, converting mammoth legacy systems with antiquated, siloed financial systems to the lean, responsive world of digital payments can be a challenge. Fortunately, technology leaders such as Magento and Paystand are paving the way to make the integration of digital payments easier than ever.
Making the case for digital payments
Although few would argue against the fact that digital payments are the future, there still may be some questions about the return on investment and effort required to make the shift to accepting digital payments. However, the benefits far outweigh any uncertainties that are tied to the process:
- Faster payments. As a business, there’s no question that you want to collect your revenue as quickly as possible. Revenue is the lifeblood of your company, and it makes it possible to launch new products, hire needed staff, and invest in new strategies. Digital payments shorten the time between invoicing and collection – they can even reduce DSO by as much as 33% in six months. For example, Paystand allows you to embed a “pay now” button on Magento digital invoices, making it simple for Magento customers to pay immediately.
- Top-of-mind status. Businesses today are still overwhelmed by a great deal of paper in addition to a fusillade of communications coming from multiple channels. It’s easy for paper bills to get misplaced or forgotten, especially if cash is not readily available. Since digital payment options are front-and-center on an electronic invoice, they are often harder to ignore, which means you may receive payments instead of being forgotten.
- Happier finance teams. There’s nothing quite like mundane, manual processes that break your finance team’s spirit. Everyone knows technology exists to make work tasks easier, and it can be frustrating to be dealing with a paper-laden, error-prone manual system day after day. By moving to digital payments with a system like Paystand that also provides complete back-end integration, you can relieve your finance and accounting teams of a great deal of manual work. As a result, your team members may be motivated to learn new skills or find solutions to bigger problems, boosting morale, focus, and effectiveness throughout the entire department.
- Customer satisfaction: Customers can be defined at multiple levels. As a Magento customer, or owner of an e-commerce shop, you will appreciate the efficiency of digital payments, and your end-customer, the consumer, will appreciate being able to easily pay by multiple channels securly, quickly, and easily. The Paystand-Magento system also allows customized payments for subscription-based services and can handle other recurring arrangements.
Magento options for digital payments
Magento essentially allows you two different options to integrate digital payments into its system: by payment gateway or by a payment gateway extension.
The first, a payment gateway, actually links your Magento store to a third-party business that processes, encrypts, and approves credit and debit card transactions. These third-party gateway providers, including PayPal, Square, and Authorize.net, provide compliant and secure methods to store payment data. Payment gateway providers usually charge a flat fee plus an extra fee on each transaction, which can quickly add up.
The second option is a payment gateway extension, which allows you to accept payments directly. These payment gateway extensions can be purchased out-of-the-box as well as enabled through the Magento Marketplace. A payment gateway extension connects customers who are ready to complete an order to a payment page that collects payment preferences and information before securely contacting the appropriate financial institution. The transaction loop is closed back through the Magento store when customers are notified that the process is finished.
How to choose your payment integration
Although payment gateways and payment gateway extensions are similar, be sure to consider the pros and cons of each before making your final decision about which digital payment system you’ll integrate with Magento. Here are some questions to help you think through the best solution for your business:
- What are my ongoing costs? Third-party payment gateway providers make their money through the fees they charge. These are usually calculated based on transaction volume, which means the more a business sells, the higher the resulting fee. In comparison, the Paystand-Magento payment gateway extension charges only a flat monthly fee, shares wholesale credit and debit card rates, and has cost-controlling features built into its system.
- Is the digital payment method compatible with my business? Payment gateways offer different levels of features and services. Be sure that you consider your business’s highest priorities and whether your digital payment method will suffice. For instance, if you offer a subscription-based service and need to collect monthly fees, be sure that your digital payment provider can deliver. Larger companies may prioritize back-office integration to minimize rework by their accounting staff. It’s important to find out if your selected solution will allow easy integration and with which systems.
- What do your customers want? Customers can be picky about how they want to pay for goods and services. It’s important for businesses to offer the payment options that the majority of their customers are demanding so that payment preference does not hamper buying decisions. Digital payments should be accepted by credit cards, bank transfers, or other digital payment methods.
How to set up digital payments in Magento
If you’ve opted for a payment gateway for your Magento store, it’s easy to take a few steps to set the gateway up so it’s ready to use:
- Configure your options for your general payment method module.
- Set up your payment method options.
- Implement the user interface for the payment method, which is what allows you to process payments.
- Configure your payment actions including who can authorize or void charges.
If you’ve opted for a payment gateway extension with a vendor such as Paystand, the steps to use the system include the following:
- Send an invoice to your customer from the Magento system that is now embedded with the Paystand “pay now” button.
- When payers select this button, they are directed to your privately labeled portal and asked to choose their payment method. Credit card payments include a convenience fee of anywhere between 1.5 and 3.5%. Customers may also pay through the system’s zero-fee bank-to-bank network, ACH, or other methods.
- Through this system, customers are highly encouraged to use the free bank-to-bank method, which bypasses credit card fees, postal time, lockboxes, and manual entries. The payment portal is integrated into Magento, making payments, posting, and reconciling deposits happen automatically.
- The payment information is now immediately available on the Magento system.
The Paystand-Magento Advantage
Although Magento makes it possible to use a variety of different digital payment options, there is the power behind the Paystand-Magento payment gateway extension. It is a state-of-the-art Payments-as-a-Service model that gives users the opportunity to eschew transaction fees altogether in favor of a subscription model. Built on cloud and blockchain technology, Paystand is one of the most efficient, secure, and robust platforms available today. Here are some key offerings:
- Multiple payment options. Paystand allows merchants to accept all major credit and debit cards, ACH, and direct-bank payments all in a single integration. Customers perceive that E-commerce stores accepting multiple payment options are more secure.
- Wholesale card rates and least-cost routing. Paystand steps up to bat and ensures that customers receive wholesale processing rates with no extra fees. Least-cost routing also helps reduce payment processing costs by shifting extra fees to the end consumer.
- Scheduled payments. E-commerce businesses that require flexible subscription payments will think Paystand is a great option to use. Shops can establish custom prices, billing intervals, and a number of repeat payments.
- Payment links. If you want to collect payments outside an actual Magento store, simply embed Paystand’s "pay now" button into email invoices. Responding customers will be redirected to a payment portal.
- Virtual terminals. E-commerce businesses can securely accept payments over the phone, in-person, or by mail through a virtual terminal, which moves information securely to your system.
- The paystand bank network. Merchants can avoid paying transaction fees on direct bank payments through Paystand’s bank network, which is used by more than 250,000 businesses.
- Fund-on-file tokenization. By using tokenization to encrypt and securely vault payment information from virtual terminals, Paystand allows merchants to securely save customers’ preferred payment methods for future purchases.
- PCI DSS Compliance. Paystand is a PCI DSS-certified payment processor.
Ready to get started with digital payments?
If you're ready to start accepting digital payments in Magento, learn more about the Paystand-Magento payment gateway extension. It offers powerful, flexible payment features that can fit your business’s specific needs. Our software helps you manage, optimize, and automate payments both inside and outside of the Magento platform. Schedule a demo with one of our payment experts or call us anytime at 1-800-708-6413.