Credit Card Processing Blog

Partnering with an integrated payments provider can be beneficial to both your business and your customers. By integrating tailored payment processing technology into your application, you’re creating a unified user experience. Everything is in one place which means that your customers won’t have to leave your platform to access other tools.

However, the process of integrating new software and business functionalities can be daunting for merchants. The process is prone to errors and can cause friction in day-to-day transactions, which may even cost you business. This is where ISVs come in.

To make things easier, merchants can partner with independent software vendors (ISVs), which can help your business flourish by opening up new markets.

While you’re aware the benefits to both the customer and the merchant, how exactly does the technology behind ISV partnerships work? Good question. First, we need to start by discussing APIs.

So, what exactly is an API?

In the world of payments, there seems to be no shortage of acronyms, however, an API plays a crucial role in ISV partnerships.

In simple terms, an API (application programming interface) allows developers to integrate one technology’s features and functions into their own software.

For example, if your company has a customer-facing app, you can use your payment processor’s API to securely accept payments and view real-time analytics from inside your app. While every API offers different capabilities, many of them allow merchants to accept both card present and card-not-present transactions, therefore providing an easy to use all-in-one solution that helps streamline your payment system.

Why is an API valuable?

That’s another great question. An API adds value to your existing technology, extending your platform’s capabilities and functionality. While every API is going to be slightly different, typically it will provide you with a variety of tools that will allow you to view analytics and efficiently manage customer information. Some APIs will also allow you to set up one-time or recurring payments and create invoices.

When you’re running your own business, time is money. By providing you with the tools to streamline all of these processes within one application, you’ll not only save yourself a lot of time and sanity, but it will also reduce the likelihood that you’ll make detrimental errors.

As a merchant, protecting your customer’s sensitive financial data should be top of mind. That’s where tokenization comes in. As we discussed before, tokenization replaces credit card numbers with a different, random string of numbers, called a “token.” The tokenized number is then stored securely and can be used in lieu of the actual card number. Because the token has no relationship to the customer’s actual data, there’s no way for the merchant to know the customer’s credit card number, therefore making it a safer option all around for storing credit card information. A good API will tokenize your customer’s payment information so that you never have to worry about your customer’s data being insecure.

Combine these selling points with the fact that you’ll be providing your customers with an integrated experience, and the value of an API is beyond evident.

If you run a small to mid-sized business, you’re at risk of a data breach. According to the US Securities and Exchange Commission (SEC), 43 to 60 percent of cyber attacks are targeted towards small and mid-size businesses. If that wasn’t worrisome enough, a study by the U.S. National Cyber Security Alliance found that 60 percent of all small businesses that suffer a cyber attack go out of business within six months of the breach. Recovering from a breach takes time and money, and often customers are slow to trust a business again after their data has been compromised.

While these statistics may seem harrowing, there are certain practical steps that merchants can take in order to protect themselves from data breaches and cyber attacks, like working with products and partners that use End-to-End Encryption (E2EE).

At first glance, E2EE may seem like yet another acronym within an industry that already feels crowded with them, but understanding E2EE is essential to protecting your business.

So, what exactly is end-to-end encryption?

We’re glad you asked. End-to-end encryption (E2EE) is a method of secure communication that prevents third-parties from accessing data while it’s being transferred from one end system or device to another. In E2EE, the data is encrypted on the sender’s system or device and only the recipient is able to decrypt it.

In other words, when you’re processing credit cards and handling sensitive financial data, E2EE ensures that it doesn’t fall into the wrong hands, therefore creating a security breach.

How does it work?

Think of the process of E2EE a bit like two interlocking puzzle pieces. When transferring data, the sender uses an encryption key which essentially scrambles the data. In order to receive the information and unscramble it, the recipient needs to have the corresponding key.

How this works for credit card processing: when a customer uses a credit card to make a purchase, their information is encrypted. It remains encrypted until the data arrives at the payment processor or acquirer who is then able to unscramble or decrypt it.

What are the benefits of E2EE?

Along with everything mentioned above, another huge benefit of E2EE is that you don’t really have to think about it. It’s built right into hardware and software, which means you there’s nothing to initiate or add-on. Your customer’s data is protected — simple as that.

The downside to E2EE is that it protects data while it’s being transmitted from the customer to the payment processor, but unfortunately, it can’t protect either of those endpoints. For example, end-end-end encryption isn’t going to protect data if for some reason it’s hacked on either end. To counteract this, many payment processors have started using Two-Factor Authentication.

Two-Factor Authentication (also known as 2FA or multi-factor authentication) requires the user to verify two separate variables, such as a password plus another piece of info before they’re able to make any sensitive changes on their account. For example, if you try to link a new bank account or reset your account password, 2FA will prompt you to enter the info above in order to verify your identity.

If you’re operating as a merchant, it’s imperative that you keep customer information such as passwords, credit card numbers and other personal data such as their home address and birthday completely secure. Using products that involve end-to-end encryption is one way to reduce the risk of a costly data breach.

As a small business owner, cash flow is something that’s always top of mind. If you’ve already done some research, you’ve probably heard that ACH processing can provide your business with a leg-up when it comes to processing payments. But what exactly is ACH processing and what are its benefits?

Good question. ACH or “automatic clearing house” is a batch processing system in which financial institutions accumulate ACH transactions throughout the day for later batch processing. Instead of using paper to carry necessary transaction information (such as with checks), ACH Network transactions are transmitted electronically, allowing for faster processing times and cost savings.

In other words, by eliminating the need for a paper check, transactions are processed electronically and merchants can receive funds much faster and easier than if they had to wait for a check to process.

Here’s how it works.

ACH payments are typically used to move funds from one bank account to another. The ACH Network processes two types of transactions: Direct Deposits via ACH and Direct Payments via ACH.

Direct Deposit via ACH is the deposit of funds for payroll, employee expense reimbursement, government benefits, tax and other refunds, and annuities and interest payments. It includes any ACH credit payment from a business or government to a consumer.

Direct Payment via ACH is the use of funds to make a payment. Individuals or organizations can make a Direct Payment via ACH as either an ACH credit or ACH debit.

Most merchants who use ACH will use it for things like paying for a service (Direct Payment via ACH) or for payroll (Direct Deposit via ACH). The funds move through the ACH Network, and the funds are deposited into the receiving bank account within a few business days. Simply put, ACH is a method for merchants to move money and make financial transactions without ever needing to use a physical check, credit card or debit card.

To set up ACH payments for your business you’ll need to work with a processor that offers them. It’s the payment processors that handle the actual payment and deposits the money into your account.

Here are a few ways that ACH processing benefits your small business:

It saves time and money.

Because you don’t have to worry about waiting for a check to process (which, isn’t always the speediest process, let’s be real), you can access funds quicker, which improves your overall cash flow. ACH credit and ACH debit transactions process quickly.  The transfer of funds from one financial institution generally happens the next day.

ACH payments are also more affordable than wire transfers, as payment processors typically offer them for free (compared to the $10-$35 banks typically charge for wire transfers within the United States). ACH payment processing also provides helpful tracking tools that allow you to easily keep tabs on payments and cash flow.

Better for recurring payments.

Lastly, ACH is much less expensive than paying with a credit card which makes it particularly helpful for recurring bills and invoices. With credit card payments, you’re subject to interchange fees and markups (which vary depending on the processor). ACH payments bypass this altogether, saving you time and money in the process.

To recap, ACH payments provides a secure option to get paid and make payments, that also saves you money on credit card fees. Because they process quickly, ACH payments can help improve your cash flow so you have the funds ready and available to grow your business.

According to a report by Accenture, Gen Z will make up to 40 percent of all US consumers by 2020. These teens and young adults are a tech-savvy emerging demographic that doesn’t remember a time before Google, Apple, Facebook and Amazon ruled supreme. Experts suggest that their purchasing and payment habits will surely influence other consumers. Over the next year, merchants should expect to see a surge in services that are catered towards all things mobile.

Here are a few of the Mega Trends that are expected to shape payment processing in the next year. Which ones will you choose to embrace?

  1. Skyrocketing popularity of in-store mobile payments.

In the upcoming year, in-store mobile payments are expected to overtake credit cards and grow from a $75 billion industry to $503 billion by 2020. It makes sense that people are moving towards digital wallets. We do everything else with our smartphones, why not make payments as well? It’s easy and streamlined. By providing your customers with the option of in-store mobile payments, you’re giving them a quicker, more forward-thinking way to pay for goods and services.

  1. Increase in mPos devices.

As of 2021, experts predict that there will be over $27.7 million mPos (mobile Pos) devices in circulation in the United States. This is a huge jump from 3.2 million in 2014. In other words, the long-held tradition of lining up to pay for your purchase at the till may be on the way out. Not only is this more convenient for the customer, but the increasing popularity of mPos devices gives merchants more options to provide an amazing customer experience by meeting customers where they are (on the shop floor, in the checkout line). Plus mPos has the ability to create an easier, quicker checkout process, which is never a bad thing.

  1. Biometric authentication.

Biometric authentication – I.e. using a fingerprint to verify and access a mobile wallet – is slated to be another big trend going forward in 2019. Apple Pay and Samsung Pay currently both use fingerprint identification, but not all platforms offer the same level of security. But soon this will change. Biometric authentication is a good development for merchants because it is likely to lead to a reduction of fraud –after all, while it’s still possible to steal a credit card number, it’s nearly impossible to fake a fingerprint.

  1. Rewards-driven purchasing.

As we mentioned above, millennials and Gen Z are leading the way with their buying power. Along with their older counterparts, they’re looking for customer experiences that make them feel valued. This means an increase in demand for customer rewards — either through points or a loyalty program of some sort. According to a survey, half of the consumers have said they would switch primary cards for a higher rewards value, and more than 40% of consumers would make the switch for a major upfront bonus.

Here’s how to prepare as a merchant:

As more and more customers choose to put their trust in mobile wallets, merchants will need to keep up with this shift in the payment industry. If you want to stay ahead of the curb, now is the perfect time to invest in new technologies that can handle multiple payment types. If you feel like your business might benefit from an mPos, this is another option to consider.

Amazing customer service provides great long-term benefits for both customers and merchants. Savvy merchants are creating these kinds of experiences for their customers by giving them what they want: rewards. One of the easiest ways to win over and keep your customers is by implementing a loyalty program.

On the surface, most of these trends primarily benefit the customer. However, by adapting to meet the changing payment needs of the customer, businesses have the opportunity to create a memorable experience for their clientele. After all, you can’t have a business without customers.

Declined. For cardholders and merchants alike, never is it a word that’s met with a smile. Declined transactions are upsetting to customers and represent a potential loss of revenue for your business. Unfortunately, though, they do happen. We only fear what we don’t know, so if you have a clear understanding of what declines are and why they happen, you’ll be better prepared to handle declined transactions when they occur.

Let’s start by discussing approvals.

When a credit card is approved during a transaction, it means the customer’s issuing bank, has approved the card. Issuing banks will approve credit card transactions when the credit card number and expiry dates are valid, the customer has enough credit to cover the amount of the transaction, and the card has not been reported as stolen or compromised. However, keep in mind that approval is not a guarantee that the funds will be transferred to your account. There’s always a chance that a customer will request a chargeback at a later date.

Declines work the same way but in reverse. When a card is declined it means that the issuing bank has flagged it for a variety of issues: the card’s number or the expiry date is no longer valid, the customer doesn’t have enough credit to cover the transaction or the card has been reported as lost, stolen or compromised. In order to prevent criminals from “testing” cards, issuing banks don’t provide a specific reason as to why a card is declined. However, declines typically fall into one of these categories:


One of the most common kinds of declines, this is just a normal decline from an issuing bank. This usually means that the cardholder has insufficient funds or there’s been a restriction placed on their card.


If the credit card is past its expiry date, the bank won’t be able to process it. The customer will have to provide another form of payment (this kind of decline is also incredibly common, as credit card expiry dates tend to be an afterthought for many of us).


If you’ve entered a credit card number incorrectly, you’ll receive an “Invalid Card” error. This means that the system has done a MOD10 check (the checksum formula used to validate a variety of identification numbers) and it was unable to validate the card. In this case, you’ll need to re-enter the credit card information.


While this is technically a decline, there’s a chance the bank will still approve the transaction. The bank simply requires the merchant to call for authorization. If the bank approves the transaction, they’ll provide the merchant with an approval code.

Keep in mind that some credit cards — especially business and corporate cards — may have restrictions on the kinds of purchases that can be made using the card. Same goes for international transactions. A card issued in another country may have a restriction in place that prohibits from processing all international transactions.

In either case, the cardholder would have to call their bank so that they can unlock the card and approve the purchase.


If you receive this message, it means you should “pick up” the card if it’s physically present. This message typically occurs when a card has been taken out of circulation due to it being reported lost, stolen or compromised in some way. Cue: every scene in movies where the owner of a ritzy boutique or restaurant takes the credit card from the customer and cuts it up right in front of their eyes.

Here are a few other things to keep in mind when dealing with declines:

If you receive a “pick up card” error message, this could be a sign that the customer is trying to make a fraudulent purchase with a stolen credit card, so approach the situation with caution. It’s never worth compromising your safety just to get a card from a customer.

Unless you’re inputting credit card numbers manually and receive an “invalid card” error message, trying to process a card multiple times isn’t going to change it from a decline to an approved message. While the customer may request that you try it again, once a card has been declined, it’s declined. If the customer has any questions, they need to speak directly with their credit card company.