Payment Processing Basics

In a business environment dominated by the #ecommerce boom, POS #payments are not perhaps given the attention they deserve; however, a (POS) revolution has been in the making. Let’s take a look. POS systems facilitating merchant payments have been around for decades. They have evolved from simple cash registers to complex multi-purpose devices. From the massive adoption of credit cards in the 1980s to the first POS software for MS-Windows in 1992 and from there to the introduction of the cloud in the 2000s and to the outbreak of the pandemic, POS systems and payments have gone through several transformation phases. Having undergone all these changes, POS systems still remain today an indispensable tool for any merchant with an off-site presence. However, they go far beyond than merely facilitating the acceptance of payments. Integrated with ERP software, CRM systems or various other technical set-ups, they enable from inventory tracking to financial reporting to loyalty and marketing programs. For smaller merchants and #business owners, they are often the main #technology around which they run their businesses, providing access to valuable data insights that they cannot get elsewhere. Their next bet revolves around a topic that happens to be, simultaneously, – both well-known and (often) neglected: the customer experience or in today’s terms the #retail experience. Take for example Germany, Europe’s largest market with around one quarter of the European GDP. There are almost one million cash registers in Germany, but most of them are not (yet) mobile. To address this gap, Unzer, one of the leading players on the market, has recently launched POS Go, a device that can be used from anywhere thanks to its cloud-based software. What’s more the device not only combines several functionalities under one umbrella - a cash register, a card reader, a printer for receipts and a scanner – but also gets to benefit merchants from digital accounting, digital receipt storage, and real-time analytics. However, beyond the many features, Unzer’s launch marks a breakthrough for an additional reason: the fact that POS Go – apart from accepting all standard means of payment – can be used to bring popular e-commerce payment methods like, for example, installment and invoice purchases – better known as Buy Now, Pay Later – to the offline world. Solutions like these, driven by software bundled with state-of-the-art hardware, sit at the forefront of enabling new retail experiences by means of converting a stationary Point-of Sale device to a flexible, omnichannel solution that addresses two of the main challenges of modern businesses: digital transformation and a frictionless, seamlessly integrated check-out process. Opinions: my own, Graphic sources: Counterpoint, Unzer

#Africa bleeds $5B a year not to #corruption or #mismanagement, but just to move money within its own borders. Example: A Kenyan business paying a Ugandan supplier. Instead of Nairobi → Kampala, money goes: Nairobi → USD conversion (1–2%). USD routed via New York/London ($20–50 fee). USD → Ugandan shillings (another 1–2%). By the time a $26,000 invoice is paid, $500–1,000 is gone. Whilst we may be denied visas, our money travels freely through New York. And it’s not just trade: Africa’s #diaspora sends $95B home each year, yet pays the world’s highest remittance costs. -We pay the highest cost for credit. -We pay the highest cost for payments. -We pay the highest cost to send our own money home. It’s not inefficiency. It’s design. The #GlobalFinancialSystem wasn’t built for us. The good news? Solutions exist. #PAPSS (Pan-African Payment and Settlement System) is already live linking 15 central banks, 150 commercial banks, and 14 payment switches, with the capacity to handle $300B in intra-African trade annually. Through PAPSS, that same Kenya–Uganda  transaction could  look very different: -One direct conversion from KES → UGX (0.2–0.5% spread). -Settlement netted via African central banks. -Funds received in hours, not days. Estimated cost: $60–150.  Potential savings: $500–950 on a single $26,000 payment. No detours. Value stays in Africa. The challenge isn’t invention. It’s implementation. One Africa. One market. One #payment system. AI image below*

Interesting comparison between Apple Pay and Google Pay security models. Apple Pay keeps the entire transaction process more local: The credit card info is stored directly in the Secure Element on the device. A Device Account Number (DAN) is created and used for transactions. Apple doesn’t store your card data on its servers the bank and ecommerce server only see the DAN. Google Pay uses a cloud-based model: Card info is stored on Google’s servers. Google generates a payment token when you make a transaction. This token is then passed to the e-commerce server and ultimately to the bank. Both systems are secure, but Apple’s on-device approach reduces server exposure, which can offer stronger privacy, especially in sensitive contexts. Google’s model allows more server-side flexibility and features like cross-device syncing.

In the first half of 2024, £571 million was lost to card payment fraud in the UK alone, much of it driven by scams on social media. Fraud has clearly evolved, adopting more modern and sophisticated tactics. In payment, one standard governing how card data is protected, namely how it is stored, processed, and transmitted, is the PCI DSS directives. The Payment Card Industry Data Security Standard was created in 2004 and has been the backbone of payment security for nearly 20 years. This year marks a big shift. Its latest version, PCI DSS v4.0, will become mandatory in March 2025. This is the first major update in over a decade, so worth taking a closer look at the key changes. Overall, PCI DSS v4.0 focuses on critical aspects such as encryption, authentication, network segmentation, and vulnerability testing, ensuring businesses are better equipped to handle the 'modern' security threats that are increasingly sophisticated too. ◾As such one of the key changes is the introduction of a flexible compliance approach. This means merchants can choose security measures that best fit their specific needs and risks. This approach is well-aligned with how businesses today manage their security challenges. In the same way that authentication frameworks are becoming more adaptive to varying levels of risk, other security measures are also evolving to be more context-specific and scalable. ◾Another key update focuses on the Stronger Authentication framework. Multi-factor authentication (MFA) is now mandatory for all accounts accessing sensitive payment systems, including remote administrative access. Specifically, MFA is required for all accounts that interact with the Cardholder Data Environment (CDE). ◾Stronger encryption and better key management are now essential. Businesses must use modern encryption methods instead of outdated ones. They also need to improve how encryption keys are created, shared, and stored to reduce the risk of data breaches and unauthorised access. ◾Given the industry’s shift towards real-time data processing, the latest guidelines also encourage automated monitoring and the use of tools that enable businesses to detect and flag non-compliance in real time. 👉🏽#Paymentexperts any perspectives to share on #pcidss🎙️? --- 𝑾𝒐𝒏𝒅𝒆𝒓 𝒘𝒉𝒐 𝒘𝒆 𝒂𝒓𝒆? 𝑊𝑒 𝑎𝑟𝑒 𝑎 𝑡𝑒𝑎𝑚 𝑜𝑓 𝑃𝑎𝑦𝑚𝑒𝑛𝑡𝑠 𝑆𝑡𝑟𝑎𝑡𝑒𝑔𝑖𝑠𝑡𝑠, 𝑏𝑙𝑒𝑛𝑑𝑖𝑛𝑔 𝑐𝑜𝑟𝑒 𝑡𝑒𝑐ℎ𝑛𝑖𝑐𝑎𝑙, 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙, 𝑎𝑛𝑑 𝑐𝑜𝑚𝑚𝑒𝑟𝑐𝑖𝑎𝑙 𝑒𝑥𝑝𝑒𝑟𝑡𝑖𝑠𝑒 𝑤𝑖𝑡ℎ 𝑎 𝑐𝑟𝑒𝑎𝑡𝑖𝑣𝑒 𝑎𝑝𝑝𝑟𝑜𝑎𝑐ℎ. 𝑊𝑒 𝑎𝑠𝑠𝑖𝑠𝑡 𝑐𝑙𝑖𝑒𝑛𝑡𝑠 𝑡ℎ𝑟𝑜𝑢𝑔ℎ 𝐶𝑜𝑛𝑠𝑢𝑙𝑡𝑖𝑛𝑔, 𝑆𝑡𝑟𝑎𝑡𝑒𝑔𝑦, 𝑅𝑒𝑠𝑒𝑎𝑟𝑐ℎ, 𝑎𝑛𝑑 𝑇ℎ𝑜𝑢𝑔ℎ𝑡 𝐿𝑒𝑎𝑑𝑒𝑟𝑠ℎ𝑖𝑝 𝑝𝑟𝑜𝑗𝑒𝑐𝑡𝑠. 𝑳𝒐𝒐𝒌𝒊𝒏𝒈 𝒇𝒐𝒓 𝒑𝒂𝒚𝒎𝒆𝒏𝒕 𝒍𝒆𝒂𝒓𝒏𝒊𝒏𝒈 𝒓𝒆𝒔𝒐𝒖𝒓𝒄𝒆? ◼️ Sign up to our unique Payment Assets Library here: https://lnkd.in/dVXjGkzB ◼️Follow Paypr.work [ˈpeɪpəwəːk] for more #paymentinfographics #paymentstrategy #payprwork #paymentinsights

I've processed hundreds of AP bills in my career. And I can tell you, most teams are doing it the hard way. So I put together a complete AP cheat sheet that covers everything you need to know about managing accounts payable efficiently. (Check the first link in the comments for the tool I use to automate this) → What is Accounts Payable? AP represents the money your company owes to vendors and suppliers for goods and services purchased on credit. It's one of those critical functions that can either run smoothly or become a complete nightmare → How to Calculate Accounts Payable The formula is pretty straightforward. Beginning Balance + New Bills minus Payments equals your Ending AP Balance. This calculation helps you track what you owe at any point in time → How to Forecast Accounts Payable You need to follow the BASE formula to create accurate AP forecasts. There are two methods I use with my clients. Method 1 is calculating Days Payable Outstanding. Method 2 is tagging each GL account to a payment cadence like Immediate, Net 30, Net 45, or Net 60. Both work well, it just depends on how detailed you want to get → Optimizing Your AP Function There are some clear dos and don'ts here. Set up group email addresses for AP communications instead of siloing everything to one person. Collect vendor agreements and W9 forms upfront, not when you're scrambling to make a payment. Invite vendors to their own portal for banking details rather than chasing them down via email. And please, don't blindly trust unverified vendors or process payments manually without proper approvals. → Common AP Roles The AP Clerk handles day to day bill processing and payment execution. The Controller oversees financial operations and AP strategy. The Procurement Specialist manages vendor relationships and purchase orders. → So How Do You Actually Automate All of This? Manual AP processing is slow, error prone, and really hard to scale. BILL handles the entire workflow in four steps: capture bills with minimal manual entry, route approvals based on your business rules, pay through multiple methods including ACH and credit card, and sync automatically with accounting systems like QuickBooks and Xero. For businesses managing multiple entities, BILL consolidates everything so you can approve and pay bills across locations in one place. Businesses save an average of 12 hours monthly and reduce their AP processing time by up to 80%. 98% of customers feel more secure with BILL, and most see benefits within two weeks. If you're still processing AP manually, you're losing time and money every month. BILL is offering a live demo plus a $100 Amazon gift card to see how their platform works. Check it out at: https://lnkd.in/eEwvHTX2 === How much time does your team spend on AP each month?

B2B Buy Now, Pay Later: A Huge, Emerging Opportunity 💡 BNPL is a type of short-term financing that allows customers to purchase goods and services but pay for them in full later, or over time in installments. BNPL offers convenience and flexibility and drives affordability, making it a popular short-term financing option for retail consumers shopping in both e-commerce and brick-and-mortar modes. However, BNPL is not only relevant for B2C; it is even more important for B2B. In principle, B2B BNPL works in the same manner as B2C BNPL, but the end customer is a company instead of an individual. It is offered by individual suppliers or through marketplaces. These companies can be found across many industries and in different sizes, from micro-, small-, and medium-sized enterprises to large corporates. They typically require multichannel BNPL solutions to cover in-person and online sales 👨💻 In principle, suppliers can extend BNPL directly to business customers, especially if a limited number of them are mostly recurring. In many cases, suppliers already do this via trade credit. However, when suppliers have a diverse set of customers, including many first-time buyers, in-house BNPL solutions reach their limits because of suppliers’ balance sheet size, underwriting capabilities, and operational capacity. Given that suppliers should aim to achieve BNPL approval rates of 80% and higher, they may find themselves stretched too thin. This is where specialized B2B BNPL providers enter the game. B2B BNPL deserves serious attention and consideration as it addresses two major challenges in the B2B environment: 🔹 Providing financing to businesses at the point of sale helps reduce the MSME funding gap at the point of need and increases purchasing power. 🔹 More importantly, it allows businesses to manage their liquidity through the flexible payment terms offered. B2B BNPL also outshines its sister offering, B2C BNPL, in several ways: 🔹 The market is substantially bigger. The B2B market size is roughly five times bigger than the B2C market. 🔹 The transaction volume is higher than average. B2B transactions are notably larger than B2C transactions, boosting BNPL providers’ revenues. 🔹 The propensity for repeat business is greater. Long-term buyer-supplier relationships mean frequent purchases from the same supplier, creating greater opportunities for BNPL. 🔹 It caters to a vastly underserved market. B2B BNPL solves critical working capital and liquidity challenges for small businesses. While the benefits are evident, it is also important to highlight three main considerations around B2B BNPL that should be addressed by the provider and the embedding supplier: (1) debt burden, (2) transparency, and (3) adverse selection. Source: Arthur D. Little - https://lnkd.in/eHidMQ4a #Innovation #Fintech #Banking #B2B #Retail #Ecommerce #OpenBanking #API #FinancialServices #Payments #Loans #BNPL #B2B 

In this deep dive edition of Fintech Wrap Up, I explored how AWS is enabling businesses to build modern credit card payment processing platforms and payment gateways with its powerful cloud infrastructure. As payments become increasingly digital, AWS provides a secure, scalable, and resilient solution to handle credit card transactions efficiently and in real-time. By using services like API Gateway, DynamoDB, Elastic Kubernetes Service (EKS), and Amazon Managed Streaming for Apache Kafka, businesses can meet high availability and low latency requirements while adhering to compliance standards like PCI DSS. The article delves into the lifecycle of credit card transactions, from authorization to clearing and settlement, offering detailed reference architectures for both the acquiring and issuing processes. It highlights AWS’s capabilities to support global expansion, manage compliance in different regions, and protect sensitive data through tools like AWS Payment Cryptography and ElastiCache. Key features include the ability to scale operations during seasonal spikes, maintain stringent security protocols, and automate monitoring for real-time issue detection. Whether businesses are enhancing their fraud prevention mechanisms, optimizing tokenization processes, or ensuring compliance with industry regulations, AWS’s cloud infrastructure provides the flexibility and reliability needed to succeed in today’s fast-evolving payments ecosystem. If you’re looking to future-proof your payment systems, this deep dive is packed with essential insights! #fintech #payments #aws #cardprocessing Prasanna Thomas Richard Panagiotis Tony Nicolas Arjun Dr Ritesh Sandra

Digital payment frauds are perhaps the single biggest crime in the country today. In FY 2024 alone, Indians have lost ₹1,400 crore to digital payment fraud - a five-fold surge in just one year!! Scammers are evolving beyond simple OTP phishing into sophisticated high-value deep fakes and synthetic identity theft that traditional security can’t catch. SIM-swap attacks. OTP interception. Phishing for authentication codes. These are systemic vulnerabilities baked into SMS-based authentication, and for years the industry response was simply more OTP retries. To secure India's digital future, we must shift from reactive alerts to proactive biometrics and AI-driven behaviour monitoring that verify the person, not just the password. It’s great that Flipkart, Axis Bank & PayU have taken a fundamentally different approach. Their new biometric authentication replaces the SMS OTP entirely with fingerprint or Face ID, bound to the user's device rather than their phone number. The article says PayU manages merchant-side security and authentication flows, while Axis Bank uses Wibmo for issuer-level biometric verification. Two protection layers working in tandem. What stands out most is that they chose to lead here rather than wait. Bringing this to one of India's largest checkout experiences means the impact reaches millions of consumers immediately, rather than sitting as a niche feature for a small audience. Addressing the root cause and building security that consumers actually enjoy using that combination is rare and worth celebrating. #CyberSecurity #DigitalPaymentsFraud #FraudPrevention | Sunainaa Chadha | Business Standard | https://lnkd.in/gvY6p46m

From Terminals to Tap: The Quiet Revolution in POS The global PoS ecosystem is being reengineered in real time. What was once a bulky piece of hardware fixed to a retail counter is now a simple, powerful app on a smartphone. According to Juniper Research, SoftPOS transactions are projected to grow from $23.9 billion in 2025 to $540 billion by 2030. That’s not just scale—it’s a redefinition of how value moves in the digital economy. https://lnkd.in/g5E7Am8N SoftPOS isn’t just a payment method. It’s an unlock. With just a smartphone or tablet, any vendor, gig worker, or small business can become payment-ready. No need for extra hardware, card readers, or complex integrations. But the bigger story is what comes next. SmartPOS is no longer just a transaction device. It has become a full business operating system—combining payments with intelligence, automation, and embedded services. The latest SmartPOS solutions bring together CRM and loyalty programs, inventory management, eCommerce integration, payroll tools, and real-time sales analytics. This shift is giving rise to a new kind of merchant—one who doesn’t just process payments but learns from them, builds on them, and grows because of them. What’s also interesting is how SoftPOS and SmartPOS are opening the door to wider financial ecosystems—including Open Banking and stable coins. Here’s what that looks like in practice: SoftPOS and Open Banking are converging to offer real-time payment initiation via bank APIs instead of cards. This reduces costs, removes intermediaries, and lets businesses build services like instant credit or loyalty into the checkout experience. Stablecoins are inching closer to becoming merchant-ready. As regulated digital currencies grow in adoption, SoftPOS could become the lightweight interface that brings crypto into day-to-day trade—especially in emerging markets where card infrastructure is limited. SmartPOS is also emerging as a distribution channel for embedded finance. From instant insurance offers at checkout to working capital based on sales analytics, split-pay options, and loyalty rewards tied directly to digital wallets—everything is becoming part of the same flow. It’s already happening. Apple’s Tap to Pay is turning iPhones into SoftPOS terminals. PhonePe is deploying SoftPOS to 25 million merchants in India. Visa is enabling Tap on Mobile in Africa. UPI has redefined what real-time, bank-led payments look like at the point of sale. And Circle and Celo are running stablecoin pilots that bring crypto into merchant flows. This isn’t a minor UX improvement. It’s a new operating system for commerce. And it’s moving faster than most of us think. Simon Taylor Sam Boboev Victor Yaromin any thoughts on this shift and how it ties into the broader evolution of commerce? #fintech #digitalpayments #trade #stablecoins #openfinance #payments

Point-of-Sale systems are no longer just about payments. They have become real-time connected platforms that manage inventory, personalize customer experiences, and feed business intelligence. Thanks to mobile payment providers like Square, SumUp, and Shopify, even the smallest merchants can now access capabilities that used to be limited to enterprise retailers. At the same time, #datastreaming with #ApacheKafka and #ApacheFlink is transforming how #retail operates. Event-driven architectures enable instant insights and automated actions across every store, website, and #supplychain partner. Stock levels update in real time, #frauddetection models run instantly, and loyalty points are applied the moment a customer pays. SumUp is a great example. They process millions of transactions daily in over 30 countries. By adopting Confluent's cloud service, they power critical use cases such as fraud detection, CRM updates, and machine learning at scale. This ensures compliance, resilience, and fast developer delivery across more than 20 teams. The next step is Unified Commerce. All channels - stores, online, apps, marketplaces - operating on a single real-time data foundation. Data streaming makes this possible and will soon be the backbone for #AgenticAI in POS systems. Future POS will not only handle payments but also recommend upsells, replenish inventory automatically, and prevent fraud in real time. For small and medium-sized merchants, this means access to enterprise-grade intelligence without enterprise complexity. For IT leaders, it means staying ahead in a competitive, data-driven retail market. More details in my latest blog post: https://lnkd.in/ePPTSnqZ