What PayFacs Need to Know When Moving to Card-Present Payments

PayFacs expanding into card-present payments have many decisions to make. Here are some key considerations.

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The PayFac model has several benefits. It gives you more control over your margin on payment processing, customer onboarding and support, and when your customers receive funds, all of which can help with customer retention and your bottom line. You can also benefit from higher business valuation due to a steady stream of payment residuals. But you may be able to grow your business even more. Many PayFacs start out by supporting card-not-present (CNP) payments, enabling online, mobile wallet, and in-app transactions. However, there’s a vast opportunity to provide merchant services to businesses that accept card-present (CP) payments and to omnichannel merchants that accept both CNP and CP payments.

Card-Present Payments Is a Completely Different Playing Field

If you’ve had success with embedded payments that allow your customers to complete CNP transactions from within your software, prepare for a significant change to the way you operate. Supporting CP payments requires different processes, compliance requirements, and partnerships.

PayFacs expanding into card-present payments have decisions to make in these areas:

      • Payments Hardware
        To enable your customers to accept card-present payments, you need to partner with payment technology providers that support countertop and handheld / mobile card readers, PIN pads, or unattended terminals for self-service kiosks. You need to know your market and the types of devices and device features that will benefit them most. Depending on the use case, your customers may prefer a stationary payment terminal on a counter or require mobile card readers or unattended devices for kiosks – or need them all. Understand your customers’ needs and establish partnerships with companies that give them feature-rich and reliable options.
      • Processor Support and Certifications
        When you choose a payments technology partner, you’ll have to integrate to their payments platform to leverage existing processor certifications and payment device support. Ensure your payment partner’s technology complies with Payment Card Industry PIN Transaction Security (PCI PTS) requirements. Research the security features your partners support, such as end-to-end encryption (E2EE) and PCI-certified point-to-point encryption (P2PE). Also, consider that your customers will benefit from the freedom to change payment processors to help control costs and expand their payment options. With universal encryption, devices won’t need to undergo encryption key injection again if a merchant changes payment processors. Support for remote key injection is also beneficial – it means devices can be shipped to your customers and then undergo key injection. This eliminates the need to ship devices to a key injection facility and then carefully secure and track the device until it reaches the merchant’s location. Remote key injection removes that complexity and saves time and money.
      • Minimized Impact of Supply Chain Events
        When new accounts hinge on payment devices – so your customers can begin running card-present transactions – you need to make sure you can deliver them. It’s smart to work with a third-party provider with multiple original equipment manufacturer (OEM) support to manage supply chain issues and shortages (Think: 2020 and 2021). The right partnership will ensure you have access to the devices necessary to equip new customers and maintain current accounts – and avoid excessive fees from having to ship devices or parts via air to get them on time. A partner with multiple OEM relationships will give you the flexibility to pivot when you need to.
      • Device Management
        Supplying your customers with devices means you will need to manage them. Remote management capabilities give you visibility and control, allowing you or your clients’ IT resources to run device health checks and push updates or add new features in batches, saving time and ensuring consistency across the business. Screen-sharing options help with remote troubleshooting and solving problems without a tech having to travel to the merchant’s location.
      • Omnichannel Management and Reporting
        When you process both CNP and CP payments, your merchants will expect you to make it easy for them to manage all their revenue streams. You can meet their demands with an omnichannel platform that allows them to pull a single report, saving time with close-out at the end of the day. An omnichannel platform also provides an on-demand snapshot of how a customer’s business is performing across all channels. In addition, look for an omnichannel payments partner who protects cardholder data with tokenization. It not only replaces readable data with random alphanumeric characters, so they’re protected from hacking, but it also reduces the merchant’s PCI compliance scope. Additionally, tokenization gives merchants an easy, secure way to store data for future payments, streamlining checkout for loyal customers, or setting up recurring payments for subscriptions.
      • White-Label Opportunities
        Another aspect of moving to card-present payments is whether you can offer these merchant services under your own brand. White labeling allows you to provide your payment partner’s proven solutions, eliminating the time and expense of development. You get the benefit of your partner’s experience while elevating your presence as a payments provider in your market.

Partnership Is Key to Accepting CP Payments

When you’re making your checklist of all the things you need to accept card-present payments, make finding an experienced partner your top priority. Your partner should have multiple OEM relationships to help address supply chain issues. They should be able to help you manage your devices remotely and give your merchants omnichannel platform visibility. And you’ll benefit from a partner that can offer white-label processing opportunities that keep your brand in the forefront while allowing you to leverage your partner’s technology and expertise.

There’s one more thing you need to know: Datacap checks all the boxes. Contact us for information on how a Datacap Systems partnership will help you expand your business into card-present payments.

This article originally appeared at https://datacapsystems.com/blog/what-payfacs-need-to-know-when-moving-to-card-present-payments.

Datacap Systems

Datacap’s industry-standard integrated payments solutions empower any Point of Sale, regardless of architecture, with the payments flexibility to accommodate any merchant. Via one simple interface, POS developers can keep pace with evolving trends and payment industry standards, so they can spend development dollars on POS innovation rather than payments.


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Datacap Systems

Datacap’s industry-standard integrated payments solutions empower any Point of Sale, regardless of architecture, with the payments flexibility to accommodate any merchant. Via one simple interface, POS developers can keep pace with evolving trends and payment industry standards, so they can spend development dollars on POS innovation rather than payments.