How do you ensure the success of your bank?

According to Statista, the number of digital banking users are expected to grow year-on-year and reach 217 million by 2025. Over 4500 banks operate in the United States. To stand out, revenue, customer retention, and better service become crucial for the success of any bank. With millions of dollars in transactions occurring on average, payment processing with next-gen solutions becomes an absolute necessity to stay in the game.

This blog post discusses the benefits of payment processing speed and reliability for banks and the best digital solutions for seamless integration. Read on to discover how to optimize your payment processing to reap long-lasting benefits.

Common Challenges with Payment Processing 

Payment processing is one of the pillars that hold the financial institution intact and ensures the smooth running of the business in the longer run. However, developing a payment processing system comes with its challenges:

Complex Systems

Many banks still use traditional payment processing systems that may not be compatible with newer technologies or systems. These complex legacy systems may require hiring expert technicians and consultants along with enormous costs to update or replace for banks, leading to slow and unreliable payment processing.

Fraud Prevention

Rising digitization has also increased the risks of cyberattacks and fraud. A Federal Trade Commission (FTC) study revealed that fraud losses in 2021 increased by 70% over 2020, with a total loss of $5.8 billion. Security has become a significant concern for banks. Even the slightest loophole in payment processing can cause huge losses and mar the reputation, and lead to customer distrust and loss of revenue.

Scalability

Often, internal payment processing systems are functional in the current stages. However, banks need to be able to scale their payment processing systems to handle large volumes of transactions during peak times and as they grow. Ensuring the system can handle this volume without slowing down or crashing becomes challenging.

Technical Issues

Complex technical systems cause hardware or software failure or system outages. Even a second’s latency can cause millions and billions of dollars of loss over time because of system downtime or network congestion. Fixing and repairing can take hours or even days if they don’t have expert technicians on call.

The consequences of all these challenges boil down to speed and reliability. It ensures the smooth running of day-to-day operations and has several benefits, which we will discuss next.

Benefits of Reliable Payment Processing Solutions for Banks 

Careful planning and investment in payment processing can impact financial institutions like banks in multiple ways. Let’s take a closer look at how it affects them:

Gain a Competitive Edge

In the last few years, notably post-pandemic, the reliance on digital solutions and digital payments has increased exponentially. Convenience has become critical for customers. 

A delay in payment processing can hamper the customer experience. A payment gateway that accumulates different payment methods like credit card, debit card, and ACH payment is more preferable. Therefore, improving payment processing speed, convenience, and reliability becomes a value proposition for banks to differentiate themselves from competitors.

Strengthen Customer Trust

Errors or delays in payment processing can result in significant financial losses and damage the bank’s reputation. Reliability indicates commitment and strengthens customer trust. Payment processors tokenize and encrypt financial details and process them after reauthorization from the payee, thus minimizing cyberattacks and fraud risks.

Ensure Compliance, Security, and Safety

Banks are subject to strict regulatory requirements, and failure to comply can result in hefty fines and damage to the bank’s reputation. PCI-compliant, multilayered security, and real-time pre-validation help banks and companies mitigate the risks of illegal and unauthorized access to their merchants. 

Improve Business Operations 

Manual payment processing is time-consuming and expensive, and moreover, there are more chances of errors and delays. Automating payment processing by integrating digital solutions eliminates the need for human labor for monotonous tasks, streamlines daily operations, improves efficiency, and reduces costs.

Best Payment Processing Solutions for Improving Speed and Reliability

Working with third-party solutions providers adept at fintech and have the experience to integrate digital solutions in your existing models that fit like a glove is the best way to boost speed and reliability in your payment processing in 2023. Here are a few solutions that you must consider when upgrading to digital solutions:

• Real-Time Payments
• ACH Processing
• Credit Card Processing
• Check Processing
• Virtual Terminal

Factors for Evaluating Payment Processing Reliability and Optimization

• Monitor system performance regularly to identify any issues proactively. 
• Ensure payment processing uptime for banking operations is available 24/7 without interruptions.
• Keep in touch with trends and the latest technology to upgrade your system for optimal performance.
• Implement regular security assessments and updates to protect against fraud and data breaches.
• Assess and evaluate payment processing and reporting to customers to improve transparency and build trust.

However, if you work with third-party solutions like iCheckGateway.com, your partners take care of it all while you can relax and take care of other essential tasks. Strategic partnerships with fintech solution providers become an extension of your business where you get complete support, team, and benefits with little investment of time and money. A study by McKinsey shows partnering with payment processing providers can reduce IT spending by 20-30%. 

Are Leading Banks Considering Payment Processing Optimization?

JP Morgan Chase, one of the leading banking businesses, realized customers’ increasing inclination towards convenience early on. So they utilized blockchain technology to enable its customers to make real-time payments.

Deutsche Bank is another example that developed a centralized payment processing system to streamline payment processing, leading to decreased errors and higher customer satisfaction.

How Can You Choose the Right Payment Processing Solutions? 

Finding the right solutions for your business requires thorough research and planning. Here are a few factors to consider while deciding:

• Determine your business goals and objectives. 
• Explore different solutions and list down those that align well with your business.
• Narrow down the vendors and carefully go through their offerings.
• Evaluate vendor qualifications. A good practice is to look for Nacha-Preferred Partners.
• Get in touch, discuss solutions and hold meetings. 
• Select vendors or solution partners who understand your business well.
• Negotiate contracts and get started!

“Banks that make bold moves to embrace next-generation payment methods offering people more choice and control could unlock higher levels of customer engagement and drive growth in a rising-interest-rate environment.” — Sulabh Agarwal, Global Payments lead at Accenture.

Partner with iCG

Large businesses and banks are adopting new technologies to build future-proof payment processing to empower their customers with the latest solutions and increase their wallet share.

iCheckGateway.com has been an integral part of many businesses and banks and has helped them increase customer retention, satisfaction, and revenue. 

There has never a better time to adopt shifting technologies. Contact the iCG experts to learn more. We’ll be happy to guide you with the best solutions available.