Learn why a streamlined approach to the merchant payment ecosystem can help your eCom business grow, optimize transactions, and create an awesome customer experience.
Why eCommerce Companies Need Help with the Merchant Payment Ecosystem
You could be an established business growing your eCommerce, or a sleek, online-exclusive store—whatever your background, optimizing how you take payments from customers is vital.
Here at Modo, we believe the secret sauce to getting it right is through the merchant payment ecosystem.
This industry ecosystem is huge. It’s designed to collect payments from your customers and send that money to your business. Complete with hundreds of delicate, deeply-integrated, moving parts that include card networks, banks, merchants, payment processors, payment gateways, and more.
With all this detail, you need the right partner who can help you create the best solution for your business and customers.
There are dozens of areas you’ll need to pay attention to—from the speed and security of online transactions, to the convenience and experience of using your eCommerce store. Get it right, and you’ll create a friction-free, seamless payment experience. Get it wrong, and you’ll send potential customers directly into the arms of a competitor.
Here at Modo, we’ll help you get it right.
A Brief Overview of the Merchant Payment Ecosystem
First things first, let’s explore the different parts of the payment ecosystem. This is a simplified, high-level view, but it gives you an idea of how much it takes to process a payment.
Issuing Banks Provide Cards to Customers
Most online transactions require a customer to have a credit or debit card (this is changing with the growth of eWallets, but for now we will focus on cards). Your customer gets that card from an issuing bank, and that bank provides the card on behalf of one of the big card networks.
Acquiring Banks Provide Merchant Accounts to Businesses Like Yours
Almost every large business will use a merchant account with their “acquiring bank” to receive money from card transactions. If you don’t already have a merchant account, you’ll need to apply for one.
Your Website Incorporates Shopping Carts and Payment Processors
There are plenty of ways to take sales online, and most websites will use some variety of a shopping cart, with a backend payment processor. Once your customer has decided what to buy and entered their payment details, various behind-the-scenes technology takes care of the rest.
Payment Processors and Payment Gateways Forward Important Payment Information
Depending on your payments setup, you’ll use payment processors, payment gateways, or a combination of the two. Gateways and processors forward the details of the transaction to the acquiring bank (where you have your merchant account) and the card network (Visa, Mastercard, etc).
Transactions are Checked for Fraud and Authorized
The card network and acquiring bank completes fraud checks and validations, then requests authorization from the customer’s issuing bank. Once everything is authorized, the payment processor or gateway lets the shopping cart system know, and the customer finishes paying for the product or service.
Credit Card Networks and Banks Clear and Settle Funds
Once the transaction is authorized, the issuing bank works with the card network to forward details and funds to the merchant account at your acquiring bank.
And that’s it. Ideally, this all takes place in under three seconds, and is completely invisible to your customer. That's a good thing.
Why You Need Help Managing the Payments Ecosystem
Everything in this ecosystem needs to work together flawlessly or you’ll run into problems when it comes to taking payments. Online consumers want instant gratification—if they can’t buy what they want immediately, they’ll go somewhere else. Optimization, integration, and simplification are the watchwords of the day.
Optimizing Your Payment Stack
The payment stack is the entire collection of payment technologies, systems, and services that your business uses to process transactions from customers. It’s a complete merchant services payment processing platform that brings everything together into one place. A typical payment stack integrates across your entire payment ecosystem including:
- Your shopping cart and website eCommerce software.
- Connections to your acquiring bank and merchant account.
- Specialist software to identify fraud and reduce chargebacks.
- Deep data sharing with payment processors and payment gateways.
- Connections with third party payment service providers.
- Different types of payment methods including cards, mobile wallets, and more.
- Details of cleared funds and reconciliation.
- Deep reporting to identify payment trends over time.
- Connection with order management, distribution, or other back office software and processes.
Your payment stack must integrate and transfer data quickly, reliably, and securely to ensure the highest levels of customer service and fraud prevention. That keeps the customer happy and minimizes your business exposure.
At Modo, we build optimized, flexible payments stacks for merchants like you, designed to make the entire end-to-end payment process as fast and as easy as possible— for you, and for your customers.
Benefits of Using Modo’s Payments Stack for Merchant Services Payment Processing
Why choose Modo? We’re glad you asked. We start with the end in mind—reconciliation, and work back from there to provide the best payment experience for merchants and their customers.
Simplify Payment Operations and Tracking
Even simple payments stacks can create a mass of connections to different payment systems and software. We track your payment throughout the entire lifecycle of the transaction, across every system, so you know exactly where everything is. And at the end of the day, all of your transactions are in sync. No lost nickels and dimes.
See All Payment Information in One Place
Modo gives you one view of all payment settlement and reconciliation across all payment providers and currency types, ideal for financial tracking and troubleshooting. You can monitor performance in real time, using our performance and notification hub.
Simple Integration with Systems, Software, and Third Party Payment Service Providers
The Modo payments platform is easy to setup and install. We offer simple, one-click connections to multiple payment providers and platforms, and a code-light way to manage your more customized payment needs.
Optimized Routing to Reduce Payment Fees and Increase Security
Modo uses smart rules to route payments so they’re optimized for the lowest fees and highest customer reach. Our platform easily integrates with fraud prevention and verification systems to limit exposure to bad transactions and chargebacks, while keeping false declines to a minimum.
Add Local Payment Options, Worldwide
The Modo payments platform makes it easy to automate your payment options, wherever you’re selling products and services. One click connections with local, third party payment service providers is quick and easy.
Other Benefits of Modo Payments
- Website integration—the Modo payment platform integrates flawlessly with your website, including on-brand, hosted checkouts.
- Minimize declines—soft handling of declines, including rerouting to other processors to limit false positives.
- Manage issues—get one view of exceptions, disputes, and fraud across all payment providers in the stack.
The merchant payment ecosystem can be complicated, but that doesn’t need to compromise the customer experience or the success of your business. The Modo payments platform is designed for large eCommerce businesses like yours, so you can optimize transactions with fast, easy integration.
All with the payments peace of mind knowing we’re on your side with no skin in the game for which payment providers you choose.
