No business can keep afloat without efficient payment processing. With customers being used to instant and seamless transactions, businesses need to ensure the same-day processing of payments to avoid missing out on credit sales and leaving the customer unsatisfied. In the digital age, choosing the right payment processing solution is a way to lay the groundwork for long-term growth and excellent customer experience.
Businesses often find themselves in a bind, trying to figure out whether they should choose an integrated payment system or standalone credit card terminal. Each has its drawbacks and is best suited for a particular business setup, industry vertical, and growth trajectory. Making the right decision involves understanding the nuances of each system and assessing how they fit the business’s unique proposition and vision.
Integrated Payment Systems
Integrated payment systems have transformed the transaction landscape by seamlessly incorporating payment processing into the broader spectrum of operational tasks. Unlike conventional credit card terminals that operate as standalone tools, these systems include an array of capabilities that integrate sales with inventory tasks and customer processes in one system. Integrated payment systems consolidate a business’s various operations.
Definition and Operating Principles Integrated payment systems are comprehensive solutions that connect the above and other facets of commerce operations. Instead of a standalone terminal focusing only on transactions, integrated systems combine payment information with inventory data, customer relationship management (CRM), and accounting solutions . The interconnection creates a unified system where data is shared across platforms, making manual input and other forms of labour-intensive and error-prone effort unnecessary.
The main pros of integrated systems are: Efficiency and accuracy . Automation is the primary benefit. If a transaction happens, it is immediately registered in the inventory and accounting databases, leaving no room for discrepancies. This, in turn, not only saves time but ensures accuracy where it is most critical – in financial data.
The point of sales is the most common place for fraud, and an integrated system ensures there is no room for it. Better customer experience. Convenience is the main selling point for customers.
Integrated systems allow for fast transactions, offering clients the opportunity to get their product without any downtime. In addition, the digital receipt functionality offered reduces waste by eliminating the need for using paper while giving clients the ability to manage their receipts according to their preferences. Furthermore, integrated payment systems usually tie into loyalty programmes, meaning clients can benefit from personal discounts effortlessly.
Real-time data . Integrated systems give managers real-time data they can use for decision-making. They can see inventory levels at any point in time, see how one product is selling over another, and decide to adjust prices or create bundles as necessary.
The cons of integrated systems might include: Initial investment . While the long-term investment is beneficial, there are higher upfront costs associated with integrating systems. Businesses would need to buy additional software, update hardware, and perhaps even require system-loops to adjust the way the system would work with the operations.
Technology dependence . An advanced integrated system depends on the technology functioning correctly at all times. While much is done to ensure the correct systems are in place, unforeseen circumstances could put the business into operation downtime, and while the losses would be minimal in a single occurrence, there would be many repeat occurrences.
Standalone Credit Card Terminals
For years, standalone credit card terminals have been the workhorses of payment processing, offering a simple and robust solution for businesses to accept card payments. Definition and Functionality . Standalone credit card terminals are purpose-specific machines.
These devices have one function: processing card payments. They come with card readers equipped to handle all types of payment cards, including credit and debit cards, contact-based chip cards, and contactless cards . Customers can swipe, insert, or tap their cards to start a transaction.
Pros: Their simplicity: Standalone credit card terminals are essentially a plug-in-and-use option that is highly accessible. The user interface is simple and easy to use, requiring minimal staff training. As such, the likelihood of errors is significantly reduced, almost to zero unless malfunctioning .
They are cost-effective: Standalone credit card terminals have one considerable cost advantage over integrated solutions: they are cheaper to acquire and maintain . The acquisition price is lower than that of integrated hardware, which makes it available for small businesses or startups. Their benefits are that they are incredibly versatile.
They do not require complex installations or integrations; a business can easily have them set up, sometimes even moved around wit h relative ease . For instance, they are ideal for pop-up shops or temporary events, and mobile businesses can make great use of them as well.
Cons: Limited integration: A standalone terminal is the end of the processing chain. While integrated terminal solutions can work with recurring transactions or secure the verification of cardholder transactions, standalones cannot interact in this way .
Data management involves chronic update of products and operations: Unlike integrated systems able to generate live inventory data or customer insights, standalones have to be updated manually. Otherwise, managing certain aspects of the daily business operation processes can be quite complicated and prone to error.
Limited decision-making data: this is the most disheartening aspect because having the same process generation cost the business potential new variables of dec is tissue able making, unlike integrated solutions which can analyze trends and insights .
Making the Right Choice
Deciding between integrated payment systems and standalone credit card terminals is a matter of understanding what your business needs and what you wish to achieve with your choice.
Here are some factors to keep in mind as you embark on this decision-making journey: . First, build a plain-language agreement into your regulator compliance that allows businesses to continue to seek payment options with their chosen payment providers. One of the most crucial considerations in any choice is determining what your business requires to operate. Different businesses have various levels of complexity – from a small cafe to multiple large retail chains – and often, an integrated system is necessarily the most suitable choice.
For example, most busy restaurants have integrated systems that not only accept payment but make reservations, take inventory, and even include loyalty programs. Meanwhile, the mobile vendor does business directly with the customer via a short-term credit card terminal. Then, another important consideration is the cost.
This consideration is more than just the initial cost, and the integrated system has higher upfront costs than the standalone without including software integration and hardware standard. However, they can save money over time by reducing errors and facilitating payments. Secondly, a separate machine costs less around, making it easier for new businesses with budgets systems to replace.
However, this will result in additional costs in the future due to the terminals’ scarcity when the business grows. A business that links to a machine over time recovers its lost expenditures due to an increase in eventual productivity.
Conclusion
To conclude our comparison of integrated payment systems and separate credit card terminals, there is no one-size-fits-all solution. Deciding the appropriate option for your company is influenced by many considerations. Both systems have their own set of benefits and disadvantages, and the right decision is the one that suits your business model, sector, expansion strategy, and budget.
Thus, whether you want integrated systems that streamline all of your operations into a single stage, or you want to keep it easy and reliable with standalone terminals, the route you select will substantially impact how consumers communicate with you and execute transactions. This is why, as a business owner, you should opt for a payment processing partner who can provide you both the choices. This is exactly what RapidCents offers.
We give standalone terminals to our merchants and upgrade them to integrated payment solutions as their business grows. It has been our deep understanding of the business that has made us one of the most preferred payment processing companies. Sign up with your business today to learn more.
