Merchant Payment Solutions
Author: Alena Tomchuk
Last updated May 7
Contents
Introduction
Merchant payment solution is a comprehensive software platform designed to enable banks and Fintechs to deliver a range of financial services and products for the management and operation of merchants across diverse sizes and categories. The software ensures a swift transition to digital payments and a seamless digital experience for merchants and their customers. These cover credit and debit card processing, point-of-sale (POS) systems, electronic payment processing, mobile wallet solutions, crypto payments, etc. Merchants can broaden their horizons beyond traditional cash transactions by using merchant services. Embracing the convenience and security of electronic payments allows them to attract more customers and increase their revenue streams.
According to Verified Market Research, the Payment Processing Solutions Market size reached USD 52.371 Billion in 2023, and it is anticipated to surge to USD 92.778 Billion by 2030. This represents a growth rate of 10% during the forecast period from 2024 to 2030. Employing the right payment solution empowers businesses to enhance operational efficiency, elevate customer satisfaction, and foster revenue growth.
We will discuss different types, trends, advantages and factors to consider when choosing a merchant payment solution and provide tips and insights to help banks and fintechs make informed decisions.
Types of merchant payment solutions
Merchant payment solutions and services are continually adapting to meet the growing demands of merchants and the changing dynamics of their business operations. Here are some of the services typically encompassed in a merchant payment solutions offering:
✓ Credit and debit card processing
Merchant services rely on the fundamental aspect of credit and debit card processing. This enables businesses to receive payments through credit and debit cards, whether customers are physically present at a retail store or making online purchases. Through credit and debit card processing, customers can easily pay for products and services, facilitating business growth by expanding the customer base and boosting sales.
✓ Point of sale (POS) systems
Point of Sale (POS) systems are utilized by retailers, restaurants, and various businesses, featuring both hardware and software to facilitate in-person transactions. These systems encompass cash registers, card readers, barcode scanners, and tools for managing inventory.
✓ Mobile payment solutions
Tailored for businesses needing payment processing on the move, mobile payment solutions are crafted to enable transactions using mobile devices like smartphones or tablets. Particularly beneficial for businesses engaged in trade shows, events, or field operations, these solutions offer flexibility and convenience in accepting payments.
✓ Mobile payment solutions
Tailored for businesses needing payment processing on the move, mobile payment solutions are crafted to enable transactions using mobile devices like smartphones or tablets. Particularly beneficial for businesses engaged in trade shows, events, or field operations, these solutions offer flexibility and convenience in accepting payments.
✓ Invoice and billing solutions
Tailored for businesses seeking efficient management of invoicing and billing procedures, invoice and billing solutions are designed to facilitate the creation and sending of invoices, the organization of customer payment records, and the tracking of cash flow.
✓ Payment gateways
A payment gateway is a platform that enables customers to input payment details online, such as credit and debit card numbers. This information is then directed to the merchant's payment processor. In face-to-face transactions, the process occurs through point-of-sale terminals and card readers. Utilizing a payment gateway provides a secure method for businesses to accept online payments. Typically, merchant payment solutions providers offer integrated payment gateways directly on a merchant’s website or e-commerce store.
✓ Online payment processing
Online payment processing involves the acceptance of various electronic payments, encompassing credit and debit card transactions, online payments, mobile payments, and platforms supporting mobile wallets. This solution facilitates businesses in swiftly, securely, and efficiently processing payments, eliminating the necessity for physical cash or checks.
✓ Loyalty and rewards programs
Customer engagement, retention, and lifetime value (LTV) are enhanced by merchants through loyalty programs, sales, and seasonal promotions. Implementing and executing these initiatives on the payments side of a business can be complex. Fortunately, numerous merchant service providers are simplifying the process by actively facilitating and supporting these types of programs and promotions.
✓ Crypto payment gateway
Enable merchants to accept payments in cryptocurrencies or stablecoins through secure, blockchain-integrated infrastructure. Velmie provides support for leading assets and digital wallets with full auditability and compliance.
Trends in merchant payment solutions
The landscape of merchant payment solutions is ever-changing, driven by emerging technologies and ongoing improvements. The key trends in merchant payment solutions are:
✓ Increasing adoption of mobile payment solutions
A notable trend in merchant payment solutions is the growing adoption of mobile payment options. With smartphones being widely used, customers increasingly opt for the convenience of mobile payments for swift transactions.
Examples of such solutions include Apple Pay, Google Pay, and Samsung Pay, enabling customers to make payments directly from their smartphones, eliminating the need for cash or physical credit cards.
Merchants embracing mobile payment solutions can anticipate heightened customer satisfaction and increased sales, given the quick and easy payment experience for customers.
✓ Incorporating biometric authentication into payment solutions
The integration of biometric authentication, encompassing facial recognition and fingerprint scanning, is a growing trend in the realm of merchant payment solutions. Leveraging biometric authentication allows merchants to offer customers a more secure and convenient payment experience.
For instance, facial recognition can be employed by merchants to swiftly and securely verify customer identities, expediting transactions. This technology is advancing the simplicity and security of digital payments.
✓ The rise of blockchain-based payment solutions
Another compelling trend in merchant payment software solutions is the rise of blockchain-based payment systems. Blockchain technology has the potential to transform the payment industry by offering a secure and transparent platform for transactions.
An example is BitPay, a blockchain-based cryptocurrency wallet solution allowing merchants to accept payments in cryptocurrencies like Bitcoin. This solution provides merchants with enhanced security, as transactions are recorded on a decentralized ledger resistant to hacking and fraud.
✓ Surge in contactless payments
In the current landscape, contactless payments are gaining widespread popularity among both merchants and customers. This method allows customers to make payments effortlessly by holding their smartphone or debit card near a contactless payment terminal.
Offering convenience and speed, contactless payments minimize the risk of fraud and enhance the overall customer experience. For merchants, embracing contactless payments provides a straightforward means to boost sales and elevate customer satisfaction.
✓ QR code payments
QR codes are changing the way people pay for things. They provide many benefits. One is safety because they don’t need any contact for payment and reduce theft chances. QR code payments are easy, too, needing only a smartphone to scan the code. It gets rid of the extra step of carrying cash or cards, which helps make buying things easier. Plus, QR codes can hold lots of data, so they keep good records of each transaction, making it easier to track spending and manage money.
Common Issues
Despite making the digital transition, many small and medium businesses (SMEs) struggle when dealing with core payment issues. True, payment processing can be complicated. However, it is an important part of a customer’s user experience (UX) and merchant’s relations with buyers and vendors. Let’s look at the main merchant payment processing pain points.
Time-consuming merchant onboarding
In today's landscape, processors demand more extensive supporting documentation during the application process to verify the legitimacy of businesses and mitigate fraud risks. Before commencing the merchant onboarding process, businesses should ensure they have all necessary documents and materials prepared. Proactively gathering these materials can accelerate the process and reduce potential delays in what can often be a time-consuming procedure. Typically, the list of essential documents and materials for submission includes business registration documents, tax identification numbers, ownership details, financial statements, bank account information, business licenses and permits, online presence information, and payment processing history, among others.
Solution: Automated merchant onboarding
Automated merchant onboarding offers increased efficiency and reduced manual intervention compared to traditional methods. Here's how it works:
-
Digital application: Businesses complete simplified digital forms with smart fields and prefilled information to speed up data entry.
-
Electronic document submission: Businesses upload necessary documents securely online, eliminating physical handling and speeding up verification.
-
Instant identity and risk assessment: Advanced algorithms quickly perform identity verification, risk assessments, and compliance checks.
-
Easy integration: Prebuilt integration options for popular platforms and APIs facilitate seamless connection with payment systems.
-
Automated ongoing compliance: Systems monitor businesses for continuous compliance with regulations like KYC and AML, reducing manual efforts.
Automated merchant onboarding streamlines the process, offering benefits such as faster onboarding, improved accuracy, enhanced security and compliance, cost savings, scalability, customization options, and real-time tracking. This results in a more efficient and user-friendly experience for businesses, payment service providers, and payment gateways, ultimately improving customer payment experiences and increasing compliance while enabling businesses to scale effectively.
Disconnected systems
Merchants often have various channels for collecting payments from customers, such as through an accounting team managing open invoices and recurring bills, counter sales at physical locations, and online purchases on a website. Typically, each channel operates on different software applications (e.g., accounting systems, and websites), leading to inefficiencies and errors when processing credit cards in one system and manually entering payment data into others.
Solution: Integrations
A payment solution should enable a seamless integration of payment processing into merchants existing business applications. By consolidating payment processing into a unified banking platform that integrates with existing systems, merchants can streamline operations, reduce manual errors, and enhance efficiency. This integrated approach ensures a cohesive payment experience for both merchants and customers, ultimately driving business growth and success.
Security and compliance
Security has emerged as the primary challenge in payment processing. Merchants face the task of safeguarding extensive amounts of sensitive financial and personal customer data from breaches. However, ensuring robust security is intricate, especially with the proliferation of regulations such as PCI DSS.
All merchants processing credit card data must adhere to the regulations set by the PCI Security Standards Council, which assesses various aspects of credit card information security, including data collection and storage practices. Achieving and maintaining PCI compliance can pose challenges for merchants, particularly concerning the IT infrastructure needed to securely store payment data under PCI standards.
Solution: PCI DSS-compliant solutions
Transitioning from locally stored credit card data can substantially decrease the IT resources required for data security and PCI compliance. Instead, businesses can leverage tokenization technology, storing only tokenized payment records in their database while securely storing actual credit card data in the cloud. It's essential to ensure that merchant payment solutions are compliant with PCI DSS standards.
Top 10 Payment Gateway Providers
Overview: PayPal for business is a leading global provider of payment solutions with over 430 million active accounts around the world.
Ideal for: Small businesses and big enterprises.
Key Features:
-
Over 200 markets and 50 currencies supported
-
Seamless integration with popular eCommerce platforms like Shopify and WooCommerce
-
Billing, invoicing, and taxes accounting systems
-
Fraud prevention and automated dispute tools
-
Detailed sales and activity reporting
Payments:
-
Online (cards, Venmo, Apple and Google Pay)
-
P2P
-
Mobile and QR codes
-
Crypto
-
Instalments and pay later
Cost:
-
Digital payments incur a fee of 3.49% plus $0.49 per transaction
-
For online credit and debit card transactions, the fee is 2.59% along with $0.49 per transaction
-
For QR code payments, the fee is 2.29% plus $0.09 per transaction
Overview: Square offers a range of omnichannel commerce solutions, including services for online payment processing.
Ideal for: Online stores catering to various sizes, particularly those in the restaurant and retail sectors.
Key Features:
-
Professional web design templates and complimentary website launch assistance
-
Easy generation of payment links
-
Seamless integration with popular eCommerce platforms like Magento and WooCommerce
-
Advanced machine learning technology for anti-fraud protection
-
Directory of top web design and development agencies
Payments:
-
Online
-
P2P
-
Invoices
Cost:
-
Free plan: $0/month + 2.9% and $0.30 per online transaction
-
Plus plan: $29/month + 2.9% and $0.30 per online transaction
-
Premium plan: Custom pricing + 2.9% and $0.30 per online transaction
Overview: Stax Payments is a payments technology company that focuses on integrated payments, recurring billing, and SMB processing. Serving as a comprehensive processor, Stax provides specialised features and innovative revenue opportunities for its partners. It also ensures a seamless experience for merchants and their customers.
Ideal for: Established businesses earning a consistent monthly revenue exceeding $5,000.
Key Features:
-
Secure in-person and online credit card payment processing
-
Unified platform integration and direct processor integration
-
Automated subscription and payments.
-
A variety of payment methods
-
Seamless onboarding
-
Customisable payment solutions
Payments:
-
Mobile
-
In-person
-
Invoicing
-
ACH transfers
-
Recurring payments
Cost:
-
Stax charges a fixed monthly fee instead of a percentage of each transaction
-
For processing up to $150,000 annually, the monthly fee is $99
-
For processing between $150,000-$250,000 annually, the monthly fee is $139
-
For processing over $250,000 annually, the monthly fee is $199 or higher
Overview: Stripe, an online financial infrastructure provider, assists businesses in accepting payments, sending payouts, automating financial processes, and ultimately increasing revenue.
Ideal for: Various eCommerce businesses, ranging from small Shopify stores to large multinational corporations, are included in the scope.
Key Features:
-
More than 135 payment options and currencies available
-
Ready-to-use payment form included
-
Simple user interface customization for payment gateways without the need for coding
-
Integrated anti-fraud features
-
API integration for marketplace and platform payments provided
Payments:
-
eCommerce
-
Mobile
-
POS
Cost:
-
Standard pricing: 2.9% and $0.30 per transaction
-
Custom pricing: Tailored to meet your specific needs
Overview: Paystack is a payment service provider that assists African businesses in receiving payments. It is trusted by a wide range of African enterprises, including startups and large corporations such as MTN, Bolt, Domino's Pizza, and PiggyVest. Operating in Nigeria, Ghana, South Africa, and Kenya, Paystack has plans to further expand its services to additional countries in the future.
Ideal for: Small, medium and large businesses in Africa.
Key Features:
-
Paystack checkout: A secure payment form that works across all devices.
-
An array of tools designed to boost online sales, including product pages, payment links, invoices, and more.
-
An advanced data dashboard for analysis of customer purchasing behaviour
-
A combination of automated and manual fraud systems
Payments:
-
Card
-
Mobile
-
Bank
-
POS
-
USSD
-
Recurring payments
Cost:
-
Local transaction fee: 1.5% + NGN 100. NGN 100 fee for transactions under NGN 2500
-
International transactions fee: 3.9% + NGN 100
Overview: PaymentCloud is a payment gateway service provider catering to high-risk businesses. They specialize in providing point-of-sale solutions, payment gateway services, and processing for various payment methods including crypto.
Ideal for: High-risk small businesses including adult, bail bonds, CBD, and drop shifting.
Key Features:
-
Merchant account services
-
Accept payments
-
Fraud & chargeback prevention
-
Complete check processing
-
Merchant funding
Payments:
-
Cards
-
ACH
-
Online
-
Mobile
-
POS
Cost (Quote-based. For specific pricing details, please contact PaymentCloud directly, but the average ranges are):
-
Low-risk retail merchants will incur a fee of 2.4% plus 10 cents per transaction
-
Medium-risk businesses, such as e-commerce shops, will be charged 2.8% plus 25 cents per transaction
-
High-risk merchants will face a fee of 3.5% plus 25 cents per transaction
Overview: Elavon, backed by U.S. Bank, has over 30 years of experience in providing merchant services. It is recognized as one of the top credit card processing companies available, offering a range of solutions for businesses of all sizes, including in-person, contactless, and online transaction capabilities. Elavon's presence in over 36 countries enables the company to collaborate with business owners on a global scale.
Ideal for: Small businesses in need of integrating their current business platforms with a merchant services account.
Key Features:
-
Flexible integration. Elavon stands out for its extensive library of business integrations and has over 180 integrations. Integrations include Authorize.net, Rectangle Health, FreedomPay, Cybersource, PayConex and Gateway Services.
Secure Payment Processing. Elavon ensures data protection and PCI compliance through layered security, safeguarding customer information from potential breaches.
-
Global transactions. Elavon's presence in over 36 countries enables the company to collaborate with business owners on a global scale.
-
Customer support. A multilingual team is able to support customers from the US, Canada, Puerto Rico, Belgium, Denmark, Germany, Ireland, Luxembourg, Netherlands, Norway, Poland, Spain, Sweden, UK.
Payments:
-
Credit and debit cards
-
Mobile
-
POS
-
Contactless
Cost: Pricing is available upon request.
Overview: PayTabs offers the framework for B2B payment services, such as electronic invoicing for companies, QR code transactions, social media payments, point of sale, and platform switching. Presently, it is active in Saudi Arabia, the United Arab Emirates, Egypt, Oman, Kuwait, Jordan, Palestine, Turkey, and Azerbaijan. In 2022, the company introduced its integrated payments processing orchestration solution, PayTabs SwitchOn.
Ideal for: Businesses with multiple branches or stores in different cities and countries across the MENA region.
Key Features:
-
Real-time onboarding
-
Powerful merchant dashboard
-
Multiple payment options and currencies
-
Routing and authorization
-
Virtual and physical cards issuing
Payments:
-
Debit and credit cards
-
Wallet
-
Local payments
-
Invoicing
-
Recurring payments
Cost:
Flexi plan: Rates: flat rate of 2.90% + 1 AED/SAR per transaction.
Standard plan: Standard flat rate of USD 50 per month. Set up fees: USD250. Txn fees: 2.85% + 1 AED/SAR.
Overview: FIS Global (formerly Worldpay) is a global payment processor. It facilitates various payment methods and provides merchant account services. Businesses can convert their Android devices into POS terminals and accept in-person payments by downloading the SoftPOS app offered by FIS Global. Additionally, FIS Global provides virtual POS terminals for online payments and supports over 300 payment methods across 120 currencies.
Ideal for: Established international businesses.
Key Features:
-
Enables over 300 payment methods
-
Offers credit card terminals with EMV and NFC technology compatibility, along with various POS terminals
-
Access to analytics and reporting through EthosTM Analytics
-
Accommodates transactions in 120 currencies
Payments:
-
Debit and credit cards
-
In-person
-
Online
-
Omnichannel payments
Cost:
-
Tailored pricing structure based on individual quotes
-
Early termination fees apply. A standard contract extends for three years with automatic annual renewal thereafter. Cancelling within one year incurs a $295 fee, within two years incurs $195, and within three years incurs $95
Overview: Authorize.net, an online payment solution owned by Visa, assists 445,000 sole traders and businesses in streamlining and simplifying their payment processes.
Ideal for: Entrepreneurs and small businesses.
Key Features:
-
Responsive mobile forms with user-friendly checkout buttons
-
Digital wallets
-
Payment monitoring for various payment options
-
Fraud prevention tools
-
Electronic invoicing system
Payments:
-
Online
-
Mobile
-
e-Check
-
Recurring
-
POS
Cost:
-
All-in-one package: $25 per month for the gateway, along with a 2.9% fee and an additional $0.30 per transaction.
-
Payment gateway only: $25 per month for the gateway, with a $0.10 charge per transaction and a daily batch fee of $0.10.
Launching Merchant Payment Solutions with Velmie
Launching a merchant payment solution requires more than just software, it demands a powerful, scalable, and future-ready platform that supports the evolving needs of today’s businesses. Velmie provides banks, fintechs, and payment providers with an all-in-one solution to quickly launch and manage merchant services, with built-in capabilities that go far beyond traditional payment processing.
With Velmie, you get a modular and customizable core banking platform that allows you to offer a wide range of merchant services including:
Card payment processing
POS and mobile payment integration
Invoicing, billing, and payment gateway setup
Online and in-person payment acceptance
Loyalty programs and reward systems
QR-code and contactless payments
Multi-currency support
Digital assets infrastructure
What sets Velmie apart is its seamless integration with digital assets infrastructure. You can empower your merchants with:
✓ Tokenized payments for enhanced security and reduced fraud risk
✓ Stablecoin support for faster settlements and reduced transaction costs
✓ Cross-border crypto payments, enabling international transactions with lower fees and real-time settlement
Our platform also features automated merchant onboarding, KYC/AML compliance tools, and PCI DSS-ready architecture, enabling you to launch faster while staying compliant.
Whether you are launching a greenfield fintech venture or adding merchant services to an existing offering, Velmie provides the foundation, flexibility, and future-forward features to succeed in today’s competitive market.
Book a demo to discover how Velmie can help your institution deliver modern merchant solutions, from fiat payments to digital asset innovation.
