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Integrated payment solutions connect payment processing directly with merchant Point of Sale (POS) systems to complete transactions. This connection creates a streamlined process for users, who remain on the merchant website for the whole payment process.
Creating the ideal shopping environment is important, with 96% of PayPal POS merchants surveyed agreeing that PayPal provides a strong omnichannel solution for their business.1
Integrated payments are one way merchants can optimize the checkout process, creating a smooth shopping experience and good operational efficiency.
An integrated payment system supports unified commerce experiences by linking payment processing directly with other merchant systems and allowing merchants to efficiently manage retail data. Systems such as inventory management and bookkeeping can automatically update, saving time on manual data entry and reducing errors.
This article explores how merchants can implement integrated payments to meet customer expectations, improve business workflows, and potentially increase revenue.
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An integrated payment system is the combination of hardware, software, and payment processing that works together as one connected setup. Instead of running your checkout, sales, inventory, and accounting as separate tools, they share the same system and the same data.
In practice, the tools you use to accept electronic payments link directly to the software you use to run the business, usually through an API. When a customer pays, the payment processor completes the transaction and your records update in real time, with no second entry by staff.
Integrated payment solutions streamline and centralize payment acceptance and processing, whether merchants accept payments in person or online. These systems can allow merchants to access real-time sales and inventory data and updates, which provide a reliable source of information. Integration is typically achieved through APIs or SDKs from a payment service provider, and transaction data flows automatically to connected systems such as inventory, accounting, and CRM.
Additionally, customers can use various payment methods, such as credit or debit cards, digital wallets, and ACH transfers. This can eliminate the need for some manual transaction data entries, providing a smooth experience for both customers and merchants.
Here's how an integrated payment solution works:
To accept payments, the business can use APIs to embed a payment gateway on its checkout page so that customers can pay directly on the site.
Whatever payment acceptance service the business uses connects directly to its payment processor, which processes the payment. Throughout this process, the merchant's business management systems (inventory management, accounting software, etc.) track the transaction and update the business's financial management system with real-time sales data.
Ideally, the business would use a payment service provider (PSP) that offers an integrated payment solution where most of these services are centralized on one platform. However, integrated payments can also involve connecting multiple payment service providers, which can be less efficient and more costly in some cases.
For in-person transactions, businesses use a merchant POS system to accept digital payments. In an integrated payment system, the POS directly connects with a payment processor, which verifies the funds with the customer's bank and supports a smooth transaction.
The POS system combines hardware devices that customers use to pay with software that tracks inventory and sales and can integrate with various business management systems.
Integrated payment systems can create a low friction checkout experience for customers while automatically updating key systems for merchants. They can ultimately create efficiencies in business processes, reducing manual data entry.
Look for these benefits in an integrated payment system:
Integrated payments help protect data by moving it directly from the gateway or POS to the payment processor, so there are fewer handoffs where information could be intercepted. Reputable systems layer on specific safeguards rather than relying on that alone.
Two mechanisms do much of the work. Tokenization replaces card details with a substitute value, or token, that is useless if intercepted, and point-to-point encryption (P2PE) protects the data across the whole transaction. On top of that, integrated systems are built to support PCI DSS compliance, the security standard every business that accepts card payments must meet.
The difference comes down to whether your payment processing talks to the rest of your business systems. With integrated payments, processing is linked to your POS, inventory, and accounting, so a single sale updates every system automatically. With non-integrated payments, staff take the payment on a standalone terminal or gateway, then key the amount into your other tools and reconcile the sales later by hand.
That extra manual step is where non-integrated setups tend to slow down and introduce errors. Integrated payments remove the double entry, keep your data consistent across channels, and give you a real-time view of sales and stock. Non-integrated payments can still suit very low-volume sellers, but most growing businesses benefit from the automation an integrated system provides.
Integrated payments show up across almost every kind of business. A few common examples:
An integrated payment system can bring significant efficiencies to a business, but not all are the same. Some merchants may find that a payment system doesn't suit their needs very well.
Here are some considerations for merchants before choosing an integrated payment system:
While the details of how to implement integrated payments will vary slightly depending on the merchant's chosen payment gateway, the basic steps are common across providers.
Integrated payments are an important part of the retail and e-commerce marketplace. They help provide smooth experiences for shoppers and merchants, leading to improved efficiencies and often increased revenue.
Our easy integration across multiple platforms, various popular payment options, scalability, and reliability provide merchants with all they need for a smooth payment experience. Larger businesses can also explore enterprise payment processing for higher volumes and more complex operations.
Discover how to accept payments with PayPal for a truly integrated payment experience.