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Resources   /   Glossary

Payment Processing Solutions

Setting up automatic payments for one’s expenses has become a common practice as financial transactions become increasingly digital. According to Investopedia, an automatic payment is “a money transfer scheduled on a predetermined date to pay a recurring bill.” This allows for a user to choose the exact day and amount of money that is collected by an external entity, thus they need not manually pay the bill each month by phone, online, or by mail. This is becoming an increasingly popular option as workers’ lives grow busier and more hectic. Most vendors work with the best credit card processing companies, thus making automation of accounts payable an easy step to implement.

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Not only can individuals use this technology for managing their mortgage, utility bills, or student loans, but businesses can also use these automated payment methods to streamline the habitual invoices that they incur over the course of their operations. To clarify, accounts payable refers to the bills that the business must pay to maintain its workflow, not what the customers or clients pay the business for its products or services. Payment processing solutions like AvidXchange have emerged so that businesses can connect their financial transactions to the largest credit card processors, and thus alleviate themselves from the headache of tracking all their regular invoices manually.

There are both advantages and disadvantages to automating accounts payable. On the other hand, some pros include saving money and resources, increase in efficiency, reduction of errors, and an increase in documentation procedures. On the other hand, one can run into issues of implementation and integration, potential data security risks, and a certain lack of control and customization. If your company is seeking to take that next step, AvidXchange has made it so businesses can smoothly and seamlessly pay vendors with a few clicks of a button.

Merchant services cover a wide range of financial services geared towards those wanting to conduct business affairs. A merchant processing company serves as the middleman between a bank and an individual or organization with the credit or debit card being processed for payment. The best merchant services offer a variety of programs, such as payment processing, gift card programs, payment gateway, and point of sale systems like card readers to help small businesses accept payments.

Largest Payment Processors

According to Business.org, FIS ranks at the top of the largest payment processors in the United States with a total of 26.6 billion transactions processed. The top payment processing companies that came in after FIS was Chase Bank with 24.8 billion transactions processed, First Data with 24 billion transactions processed and Bank of America with 18.4 billion transactions processed. Ironically, despite its relatively young age as a company, Global Payments emerged as number 5 on the list of largest online payment processing companies with 9.9 billion transactions processed.

When it comes to the sheer amount of money within these transactions, however, Chase actually surpassed FIS with a transaction volume of $168.41 billion, while FIS’s transaction volume came in second at $123.93 billion. They were followed by Bank of America, Evalon, and Global Payments.

The major credit card networks such as Visa, MasterCard, American Express, and Discover work with these players in the payment processing industry to power the empire of digital banking. These banking institutions are all quite familiar with the most widely used credit cards. This makes accounts payable automation a widely available option, regardless of which bank and/or which credit card a company is using.

Payment Processing Companies List

With so many options, the question one must ask is how to choose a payment processing company. Each platform will have its own advantages and disadvantages, its own pros and cons. Therefore, a business must carefully consider the features of each of the online payment processing companies and decide which one is the most suitable to their own business model.

Here is a payment processing companies list with all the top payment processing companies in 2020. This is not an exhaustive list by any means, but a list of the ten more prominent players in the industry.

1. Avidxchange
2. PayPal
3. Stripe
4. Amazon Pay
5. Google Pay
6. Apple Pay
7. Due
8. CheckOut
9. Bit Pay
10. GoCardless

Of the largest payment processing companies, Paypal is one of the most popular with 305 million users. PayPal is so widely used because its model can be adapted to businesses of all sizes, big and small including high risk businesses. Avidxchange is also quite versatile in its ability to match its account payable features to the industry of the business using the Avidxchange platform. The Avidxchange program can be used in a variety of industries, including but not limited to real estate, construction, financial services, hospitality, healthcare, and even technology and software.

Merchant Services

What do we mean when we say merchant services? Generally, merchant services cover a wide range of financial services geared towards those wanting to conduct business affairs. A merchant processing company serves as the middleman between a bank and an individual or organization with the credit or debit card being processed for payment. The best merchant services offer a variety of programs, such as payment processing with interchange plus pricing models, gift card programs, payment gateways to power online stores, and point of sale systems.

The top payment processing companies in 2022, according to NerdWallet, were Helcim, Square, Dharma, Stripe, and Payment Depot. Each of these online payment processing companies had a different strength that helped it to appear on the top five list. Helcim was considered the best overall option for the payment processing industry because of its transparency in pricing and lack of monthly fees. Square was considered to have the best flat-rate option with no monthly fees, low transaction rates, and a free virtual terminal.

The largest payment processing companies will have similar features, but Avidxchange has automation products that fit each business’s specific needs for their industry and payment links to easily accept payments online.

Top Payment Processors

The top 10 payment gateways were listed above in the “Payment Processing Companies List” section. These are the top payment processors that are most well known to businesses and individuals alike. To decide which is the best of these online payment processing companies, one would have to take a deep dive into the features of each and every single platform.

One of these payment processing companies may not have a feature that is deemed necessary by a business, but then they may have the best of another feature that they desire, making it difficult to choose on a qualitative level which program is objectively better. No one software is going to have everyone, thus it becomes a question of what the business prioritizes most. Where does it need automation to make certain areas of the company more efficient?

AvidXchange covers many bases in which they have eight distinct automated products. Here they are listed below.

  • AvidInvoice – streamlines all incoming invoices
  • AvidPay – automated payment software to pay all bills electronically
  • AvidBuy – creates purchase orders
  • AvidUtility – automated payments for utility consumption
  • AvidStrongroom – a complete accounts payable solution
  • AvidAscend – AP software specifically geared towards financial institutions
  • TimberScan – Invoice automation software specifically geared towards the construction industry
  • Receivables – Tailored payment delivery options

Online Payment Processing Company

The benefits of using an online payment processing company are countless. No more bickering and squabbling over how to make online payments. By using online credit card processing, businesses can focus on what really matters in how to achieve their mission, rather than become overwhelmed with menial tasks that can so easily be automated and left alone. The major selling point of automated accounts payable is that it reduces costs by eliminating paper invoices and payments.

Automated accounts payable also increased the security surrounding the business’s financial information by using e-payment options. Another great benefit is that it increases rapport with business partners and other vendors by consistently paying invoices on time. By moving to automated accounts payable, financial tasks can be managed and taken care of from anywhere. This is a great asset for businesses that are increasingly moving to a fully remote or at least hybrid work model. Automated accounts payable can also serve to make financial audits a great deal easier. Online records allow for reports to be quickly drafted and submitted to whomever may need them within the company.

Payment Processing Business Model

This article has spent a great deal discussing the payment processing industry and its players, but what is the payment processing business model? This business model includes the use of payment processors between the customer and the entity receiving the payment. These programs serve as the middleman that allows the dots to connect in the digital space so a purchase can happen swiftly and effortlessly. To use these intermediaries, they often change payment processing fees for the use of their services. For example, PayPal charges a 1.5% transaction fee to transfer money from the platform to a personal bank account. That is how these merchant services make their profit.

Sometimes it is possible for a business to have payment processing services under its own name. This is known as white label payment processing. Instead of outsourcing the payment processing to a third party, a business creates a payment gateway that allows for payment processing to be conducted in-house. Some businesses choose this route to expand their brand and strengthen their image. This is another payment processing business model that businesses ought to consider when deliberating their choices.

Whether white labeling or with the traditional payment processors, payment processing solutions will continue to grow as a booming industry since so much of business has to match the speed of the digital world. No one can wait around for snail mail anymore, thus making accounts payable online and automating that process will only increase with time.

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