The benefits of end-to-end payment processing

When you’re looking to upgrade your business’s fund flows, the picture can get very complicated, very quickly. A payment services provider (PSP) that can handle end-to-end payment processing helps you manage your funds efficiently – and removes the complexity. You’ll gain increased access to data, better transparency into your fees, and find many opportunities to improve payment performance. This can lead to more revenue, and better profitability, overall.

An end-to-end payment processing system allows you to manage payments from one place. You can see the progress of different payments, including which ones were rejected, and the reasons why. You gain more control over how funds move from your customers to your business (and back in the other direction, as necessary). 

What does end-to-end payment processing mean?

End-to-end payment processing refers to the service of managing all of the steps of sending an electronic payment from start to finish. 

There are different types of payment, including business-to-consumer (such as a payout from an investment platform), consumer-to-business (such as buying a pair of shoes online), or business-to-business (for example, paying an invoice). That means the end-to-end payment process will look different depending on the type of payment you’re making. However, a fintech platform like Checkout.com allows you to manage a wide array of payment types. That means you have full control over each different type of payment, so you can set the parameters for fraud and risk assessment, when to request authentication, how to manage payment credentials, and more. 

How end-to-end payment processing works

In the context of accepting credit card payments, end-to-end payment processing means a payment gateway captures your customer’s credit card details, securely transmits it to the other relevant parties in the payment lifecycle, then delivers the transaction outcome in real time.

There’s more to it than that, but that’s a basic overview. You can read in detail about credit card processing in our dedicated article on the topic.

End-to-end payins

Most of the time, end-to-end payment processing refers to taking card payments from customers. When a customer initiates a transaction and funds are paid into your business, this is known as a payin. 

Let’s look at the basic payment flow in the four-party model of end-to-end payment processing (for a credit or debit card), which is one type of payin:

1. The cardholder enters their card information into the checkout page and clicks pay. The payment gateway connected to your website or app securely transmits payment data to the payment acquirer.

2. The acquirer (this is the financial institution which accepts funds on the merchant’s behalf) may then carry out payment optimization and fraud detection before sending these details to the relevant card network (the brand of the card, for example Visa or Mastercard).

3. The card network contacts the cardholder’s issuer (the institution which gave the card to the customer) with the payment request.

4. The issuing bank carries out a number of checks, including that the cardholder has the necessary funds in their account and that there are no blocks for reasons such as fraud. This is called authorization.

5. The issuer delivers the result of authorization (accepted or rejected) to the card network. The card network delivers the message to the acquirer, which passes it back to the processor. The payment gateway delivers the message to you.

Let’s look at a visualization of this process using Flow, the clever bit of code you add to your online store to accept customer payments:

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End-to-end payouts

Of course, card payments are not the only type of payment your business may need. A complete payment solution will handle any type of payment you need, including fund transfers from your business to your customers, and other types of payout. 

Let’s look at an example: Visa Direct. This is a type of real-time fund transfer which can be used to send funds peer-to-peer (P2P), business-to-business (B2B) or business-to-consumer (B2C). 

You can see from the fund flow diagram that the payment request is sent to the Visa Direct network via the acquirer. An end-to-end payment processor such as Checkout.com would manage this process on your behalf.

What is an end-to-end payment processor?

An end-to-end payment processor manages your payments from start to finish. While some payment processors only have direct contact with a limited number of parties in the transaction lifecycle – limiting how much data they can access about transaction status and reasons for payment failure – an end-to-end processor retains full visibility of each transaction throughout its journey.

Payment data is subject to many laws and regulations, which means you cannot handle the payment process directly (unless you’re willing to meet stringent compliance criteria). For this reason, most merchants partner with a third-party payment services provider to act as their payment processor.

An end-to-end processor, such as Checkout.com, owns the technology and relationships that connect your customer’s payment details with the rest of the payments ecosystem. 

Moreover, Checkout.com is an issuer and acquirer as well as a payment processor. We also own and operate our own tools in Authentication, funds management, and fraud detection, to name a few. You can view all of your payments data in the Dashboard.

What to look for when choosing an end-to-end payment processor

Here is the checklist for selecting your end-to-end payment processor:

• Fully compliant with relevant payment industry regulations, laws, and data standards
• Wide range of ways to accept payments 
• International coverage, so you can take payments in all the geographies you need to
• Reliable fraud prevention informed by machine learning, with rules you can customize
• Transparent reporting so you can see which payments are accepted, which are still pending, and which failed
• Dispute management to resolve issues when customers request their money back via the card scheme

What sets a good processor apart from a great one is the amount of effort which goes into improving payment success (i.e. reducing failed payments and accurately blocking payment fraud). As a leading end-to-end payment processor, Checkout.com has individual relationships with dozens of card schemes, issuers, and other parties in the payment lifecycle. We have Payment Success Managers which individually assess our merchants’ payment performance, and proactively find opportunities to improve authorization rates. We also have entire teams dedicated to issuer outreach, which means we directly communicate with the financial institutions which approve or reject authorization requests to find out their preferences and requirements.

And since customers use a variety of payment methods, online merchants need to work with a solution provider that can process and centralize all these payment methods on the same platform. An end-to-end payment processing system should scale automatically, allowing companies to handle large volumes of transactions at any time.

Providers of end-to-end payment processing systems differ from those that just offer backend payment processing. A backend payment processor provides merchants with the services and infrastructure they need to process customer payments. Consequently, online merchants that just need credit card processing could partner with backend payment processors. But to process payments from beginning to end, merchants should team up with providers that offer end-to-end solutions.

In addition, while some banks may offer payment processing services, keep in mind that processing payments is not a bank's core business. Payment service providers (PSPs) differ from traditional banks in that they are more modern businesses, dedicated specifically to providing excellent payment experiences, with a greater degree of customization and control. As such, fintechs such as Checkout.com can help you adapt your payments as quickly as you need to, and expand into new geographical locations with local payment methods.

Benefits of an end-to-end payment solution

When you choose payment services which include end-to-end payment processing, the main benefits are: better data visibility and more control over payment flows, as well as the possibility of payment optimizations. This means you can improve revenue from your customers when they attempt payment, as you can tweak your strategy to ensure more payments succeed on the first try. You can improve the efficiency of your fund flows because you have the ability to connect funds from acquiring with issuing. You can learn more about managing your own card program in our dedicated guide.

Another main advantage is managing your payments from one place. Depending on your choice of PSP, you could benefit from comprehensive payment services, including:

• Payment gateway
• User-friendly way to collect customer payment details
• Payins, payouts and cross-border payments
• Authentication, payment security, and fraud detection
• Dispute resolution
• Payment instrument management and forwarding
• Treasury and fund management
• Foreign currency exchange
• Issuing

Let’s look at some of the major benefits in more detail:

Increased acceptance rates

A solution provider that acts as the gateway, acquirer, and processor all in one better understands the necessary format of the messages sent to the issuer. This will increase the chances of issuer approval, boosting the amount of revenue earned at checkout. This is important because just one wrongful payment decline can permanently prevent two in five customers from returning to your brand.

What’s more, Checkout.com can apply Intelligent Acceptance to your payment traffic, and thus increase the chances of authorization. It uses machine learning to predict the best tweaks to make to your payments, in order to match the preferences of the relevant issuer.

Access to more payments data

An end-to-end payment processing system displays comprehensive transaction data on demand. Having one centralized system makes it easier to consolidate and review information on all of your payments in one location. You can use this data to research payment trends, pull financial reports, analyze decline codes, monitor disputes, and inform payment strategy decisions.

Additionally, you can view Recommendation Codes to identify the reasons for payment failure, and fix them. Using the Dashboard, you can monitor the quality of your payment integrations, and troubleshoot any issues there.

As the PSP has visibility over the entire transaction lifecycle, you can view accurate data from each stage. This helps with investigating payment failures, and accurately identifying errors in payment flows.

Read more: How an integration health check can improve payment performance

Secure payments and fraud prevention

PSPs help merchants fight fraud while still boosting their approval rates by offering fraud management tools. For example, Checkout.com allows merchants to apply risk scoring and routing logic with its easy-to-use payment fraud detection solution. As a platform, Checkout.com supports secure transactions using 3D Secure authentication, tokenization, and customizable fraud settings. 

Scalable technology

End-to-end providers offer flexible and reliable technology that adapts to fluctuations in demand and payment volume.

For example, Checkout.com offers one integration with the option to add on services as and when you need. This makes it easy to add new payment methods, manage payment credentials, turn on Authentication, and add fraud prevention measures, and so on, at the right time for your business.

Speed and stability

Checkout.com’s data-rich, modular payment technology is more agile than legacy payment processing systems, built from external products over time. Purpose-built payment products and in-house integrations enable the reliable transfer of funds between parties, without losing sight of the transaction’s progress.

Providers of end-to-end solutions are able to meet constantly evolving customer expectations and stay a step ahead of the competition. Customers will experience fast and reliable payments online, no matter the volume of traffic to your payment gateway.

Better subscription management

When you need to take recurring payments, your end-to-end payment processor should offer a range of services to support this. If your business relies on subscription payments, Checkout.com can securely store customer payment details, ensure you’re submitting the transaction request in the correct way, and even retry payments (per your schedule) in the event of payment failure.  

Subscription-based payments benefit from payment credential management, where account details are automatically updated. This can reduce the rate of payment failures due to expired payment details.

Treasury and liquidity management

A unified payment solution can realize efficiency and cost saving benefits for your business. Checkout.com allows you to connect payouts with acquiring, view balances in different entity accounts, and achieve payout continuity with top-up from alternative foreign currencies (limited to certain regions).

This naturally lends itself to global businesses, where cross-border payments are an everyday necessity, and cash flow control is paramount. 

Enhanced customer experience

A full stack solution makes it easier for merchants to track customer payments to learn about their behavior and anticipate what they might purchase in the future. Also, the enhanced layers of reporting allow merchants to set up customer profiles that they can use to generate promotions, loyalty programs, and marketing offers that affect customers’ buying behavior and help boost revenue.

Increased revenue

End-to-end solutions allow businesses to run more efficiently, which leads to a smoother customer experience. This, in turn, increases the speed and volume of merchants' payments, reduces customer frustrations, boosts customer retention, and leads to more sales and increases in revenue.

Time savings

Full stack payment solutions also cut down on the time it takes for merchants to manage their transactions, which frees employees to do more value-added work. In addition, the end-to-end processors are able to handle any issues that may come up.

This means that merchants don't have to spend time dealing with these problems, which reduces the risk of costly delays that can frustrate their customers.

Does Checkout.com offer an end-to-end solution?

Yes, Checkout.com provides end-to-end payment processing. As a one-stop payment gateway, processing, acquiring and issuing platform, Checkout.com provides you with comprehensive payment, reporting, and fund management capabilities. This ensures merchants get a unified experience, and the ability to oversee payments from one place. 

Importantly, transaction data doesn’t lose integrity throughout the transmission process. In fact, Checkout.com can identify opportunities to improve transaction messages, improve authorization rates, and achieve cost optimization.

We’re passionate about driving your acceptance rates in the right direction, and our Payment Success Managers are ready to help you.