Common Payment Industry Terms
- Acquiring - Acquiring or the acquiring channel is the mechanism used toaccept an
electronic payment transaction for processing.
- Authorization Authorization is the action taken during the processing of a transaction to verify
its validity and to give permission to complete the transaction.
- Reconciliation - Reconciliation is th eprocess of comparing transaction information from two
transaction processing entities and matching those transactions in the two lists.
- Routing - Routing is the act of determining a path through financial institutions and
payment networks that connects the two parties of a transaction together so that the transaction can be completed.
- Settlement - Settlement is the act of physically moving money between two entities to complete the movement of funds to "pay" for transactions between transaction processing entities.
Trends of Financial Transaction Processing and Convergence
The current state or trends of the financial payments processing industry as well as emerging trends in the areas of Retail Payments, Automated Clearing House (ACH) and Wire Transfer is discuss.
Within each area the common elements of payments processing that are discussed including: Acquiring, Routing, Authorization, Reconciliation and Settlement.
While each area of financial transaction processing works slightly differently; there are basic common elements of processing they are all performing.
The convergence of the common areas of financial transaction processing into common services that can be exposed and shared among multiple applications within an enterprise.
The utilization of common services across the financial transaction processing enterprise will result in a 40% reduction in duplication of data and functionality overlap that exists in the current financial transaction processing environment.
Convergence supports reduction of maintenance costs and increased business agility to develop new payment offerings more quickly to meet customer's market demands.
Current global economic conditions have forced the financial transaction processing environment to become more efficient with an increased focus on streamlined processing resulting in reductions in operational costs.
A change in the market demand towards reusable service based architecture is fueling a technology shift within the industry towards financial transaction processing solutions that deliver reusable common services.
Software providers who deliver software solutions to meet the common services demand will be viewed as more desirable by the market; its products will deliver higher value to its customers.
Web Payments on the open web
While e-commerce is booming, take up of web payments is still hampered by security concerns and usability, particularly for transactions made on mobile phones, where shopping carts are often abandoned.
A number of companies have formed a Web Payments Interest Group that will work to improve the customer experience by creating a standards platform.
Banks, credit card companies, governments, mobile network operators, payment solution providers, tech companies, retailers and content creators are all happy to take part.
We are entering a transformational moment in time in the field of payment technologies as there are more options than ever offering frictionless and borderless transactions.
Adapting existing payment standards, as well as old and new technologies to work in a browser environment will help connect more than one billion people to the "Internet of Money".
The web payments group will look at online and offline payments, remittances, retail and bill transactions, new crypto currencies,
And the role of regulation on technology, searching for gaps in Web technology regarding usability, security, and privacy, and trying to find fixes.
The first priorities are to focus on digital wallets, which while seen as an effective way to cut fraud and improve privacy in payments, are often hampered by a lack off interoperability.
Web payments group will look to create a framework to ensure that Web apps can interface in a standard way with all payment methods.