The Evolving Needs of Merchant Management System

The Evolving Needs of Merchant Management System

Digital disruption has changed the way businesses are executed these days. With multifarious payment options, there is a need to think and redesign the ways merchants are handled by competitive banks. Being able to accept payments through myriad channels from your customers is one of the most important elements of accelerating your business. Payment regulators are constantly trying to devise ways to fortify the payment process and make it safe and secure. In any online transaction, there are at least 4 parties involved viz:

  1. The Merchant: One who accepts the online payments via credit/debit card or other payment methods such as e-wallets, UPI, net banking, etc.
  2. The Customer: One who is buying a product/services using his bank account details.
  3. The Issuing Bank: The bank that holds the customer’s account
  4. The Acquiring Bank: The bank that processes the payment on behalf of the merchant account

A merchant needs to have access to services such as a payment gateway, payment processor and a merchant account, to be able to receive payments online. Their individual roles are explained as follows:

 Role of a Payment Gateway:

A payment gateway is a service that enables the merchant to accept online payments via multiple payment modes apart from cash. It allows your customers to submit payment information via the digital platform over internet. It connects all kinds of merchants with payment networks. A payment gateway comes integrated with the merchant POS system as well as the online e-commerce website. This enables merchants to accept payments at the store via prepaid card as well as accept payments online using customer card details and other payment modes. It is a link between the customer’s bank or card to the merchant account so funds can be transferred between these accounts. Payment gateway solutions essentially help with the following:

  • Integrates your online store and POS
  • Fetches and encrypts the payment information to transmit securely
  • Efficiently routes the information to and from the Acquiring Bank/Payment processor
  • Responds back to the merchant with a transaction ‘approved’ or ‘declined’ message

The need for a Merchant Management System

Role Of Merchant Accounts:

To receive online payment, a merchant needs to have a separate account called the merchant account. A merchant account is a type of bank account that enables your business to accept payment in multiple forms including credit cards, debit cards, and ACH payments. Merchant accounts are provided by acquiring banks or payment processors.

Role of Payment Processors or Acquiring Banks:

                Also known as a credit card bank or merchant bank, is a bank or financial institution, licensed as a member of a card association such as Visa, MasterCard or Amex, that creates and maintains the merchant’s bank account. For merchants to enable processing of a prepaid card transaction through their website, they need to sign a contract with acquiring banks, who then authorize the transactions and connects issuing banks on the merchant’s behalf. Large payment processors don’t work directly with online businesses but make reselling agreements with payment gateways to provide their services to merchants.

The need for a Merchant Management System:

The acquiring services offered by banks to its merchants require them to onboard and integrate the merchant. This also brings about an overhead for banks to manage merchant settlements and payouts. To help banks adapt and prosper in this multi-channel world, merchant management solutions are a great option. Mindgate’s merchant management & merchant acquisition system supports the essential services of online transactions such as:

  • Providing payment gateway services and merchant account.
  • Enabling Acquirers to enroll merchants, query transaction history, manage fees, track terminal inventory, assess risks and generate settlements.
  • Providing a complete 360-degree solution for acquiring banks to manage their merchant related activities such as Merchant Onboarding, Merchant Servicing, and Reporting.
  • Supporting national, international and global financial institutions.
  • Providing the infrastructure to handle growing traffic and spikes.
  • Supporting all payment options with the ability to link multiple stores/merchants.

These benefits eventually lead to banks acquiring more merchants on board. Contact Mindgate, a leading payment solutions company, for a comprehensive merchant management system.

Growth of Cashless & Real-time Payments (UPI) in India

Cashless & Real-time Payments (UPI) in India

Introduction of UPI in 2016 and the succeeding UPI 2.0 in 2018, turned out to be a game-changer for the payment landscape in India, taking the country a step closer to a cashless economy. An end-to-end digital transacting platform, UPI has revolutionized the payment structure by bringing multiple banking features, seamless fund routing & merchant payments under one umbrella. Facilitating instant payments, seamless and secure transaction experience, UPI is gaining momentum across the country.

Having significantly impacted the other payment systems including card payments as well as net banking, the unified payment interface is likely to drive larger volumes of transactions in the future. Experts project that UPI could go as high as 60 billion annually by 2023, comprising half of India’s digital payment transactions[1]

With nearly 143 banks sharing the interface, the UPI is reinforcing trust in digital transactions pan-India. From a humble beginning to the latest reports of 900 million monthly transactions, (August 2019), UPI has set the ball rolling. The rise of internet connectivity coupled with the penetration of smartphones has contributed immensely towards its success.

UPI Transactions

UPI supports the following financial transactions:

  • Pay Request: A Pay Request is a transaction where the initiating customer is sending/pushing funds to the intended beneficiary.
  • Collect Request: A collect request is a transaction where the customer receives or pulls funds from the intended remitter by using a virtual ID.
  • Non-Financial Transactions: UPI also supports some of the non-financial transactions including mobile banking transactions, generating a one-time password (OTP), checking transaction status and more.

Apart from these, with the various upgradations to the technology such as UPI 2.0, which was introduced in 2018, it keeps getting better and more convenient, both to the customer and the merchants.

Cashless & Real-time Payments (UPI) in India

Mindgate’s UPI Platform Implementation – A Success Story

Mindgate recently joined hands as a technology partner with a renowned bank for developing its real-time payment space. Mindgate was successful in providing a UPI platform that offered a complete solution to the bank. This helped in the seamless transition from the bank’s existing legacy systems to the modern open banking platform without any hassles. With micro-level planning, it was made possible to migrate around 30 million users from their existing CASA database to the digital platform.

Some Practical Benefits Of The Platform:

  • The platform is designed to accommodate 1million direct and 5 million indirect merchants
  • Provides a complete suite for the bank to onboard its merchants through automation with all relevant data
  • Provides digital collections for merchants on UPI
  • Improves efficiency through reduced costs
  • Increases non-bank customers’ footprint for real-time payments via social media channels like Google, Samsung pay, Whatsapp, etc.
  • Provides a high-speed flow of 1000 transactions per second
  • Reduces fraudulent activities by 99% through inline fraud processing
  • Increases customer trust in the ecosystem!

Mindgate Immerses In The UPI Journey

Building new generation gateways and mobile-based collections and payment platforms, Mindgate employs an open-source technology framework that is capable of handling high scale and volume. Lately, the company reinforced its position in the global market by entering an alliance with ACI Worldwide, the global leader in payment solutions.

The strategic partnership will accelerate and enhance real-time payments structure globally. The advanced, end-to-end real-time solution will cover banks, financial intermediaries and merchants in India as well as the international market. The merger of two stellar companies is expected to set unprecedented benchmarks in the payment landscape, making the digital payment economy thrive and sustain even in the dynamic economic conditions.

Mindgate continues to be at the forefront of innovative solutions that ensure our clients drive enhanced value and experience for their customers. So, make your move, contact us and avail our offerings to experience the highest level of professionalism, integrity, and responsiveness.

Reference:

1. ACI Worldwide invests in digital payments solutions provider Mindgate Solutions