How does CRM Integrate with PSPs?
What are PSPs, and what do they do? Why is it important to integrate your CRM system with a PSP? What are the benefits of doing so, if any? How safe is it to use a PSP for your CRM software? Is it a reliable method, or are there better options?
In this article, we are going to answer all the above questions and learn more about PSPs and how having a reliable and secure PSP integrated into your CRM system can benefit your business. But, before we get to that, we might need to talk about what PSPs are and what they do for those of you who may be hearing about them for the first time.
What are PSPs?
PSP stands for Payment Service Provider. Different companies all over the world provide online services for shops and businesses. Thanks to these online services, shops and businesses will be able to accept electronic payments from their customers or clients by a variety of payment methods, including credit card, bank-based payments such as direct debit, bank transfer, and real-time bank transfer based on online banking.
Of course, these services are not free, and PSPs take some commission for each transaction. PayPal and Stripe are two of the most well-known payment service providers, which we will discuss later in the article.
How do PSPs Work?
The payment service provider acts as an interface between the merchant’s website and a payment processing bank, also known as an acquirer. Generally, a gateway can be used for many different types of payment methods; however, we are only going to talk about online credit payments for the sake of this article.
The gateway that your CRM provider integrates with your business encrypts sensitive credit card details to ensure that any data from clients are passed on securely. We will talk about the security of PSPs later in the article. Why not just use a bank transfer? The answer is that it is because of your safety. If you do not feel comfortable sharing your bank account or credit card details with merchants online, the only way you can have a secure transaction is via a PSP.
In simple words, a payment service provider is a trusted entity between the customer and the merchant, connected to a bank to transfer the funds to the parties securely.
Advantages of Using PSPs on CRM
Now that we know what PSPs are and how they work, we need to talk about the benefits of using a payment gateway or payment service provider. Using a PSP benefits the business owner or the merchant and there are advantages for the customers that make the purchase experience much more pleasant.
- A payment service provider is the most common way for a merchant to connect to the payment system. Not many companies have the chance to get connected to banks. Only the largest merchants are able to connect to an acquiring bank directly. For financial reasons, banks avoid getting connected to smaller businesses directly. Therefore, if payment service providers did not exist, smaller companies or entrepreneurs would have to limit their customers to only the local ones and would not be able to promote their brand globally.
- Fees that PSPs deduct from transactions are minimal compared to the advantages they offer in helping merchants get connected to an acquirer, manage their business, and control the risks associated with accepting online payments. As mentioned before, this is not only for the benefit of the merchants, but also the convenience and safety that PSPs provide for the clients is worth much more than a few dollars for commission.
- A good payment service provider will enable the merchants to have many customizable reporting options, which can help the companies manage their business much more efficiently. This advantage is one of the biggest perks of integrating the PSP with the CRM system, and it will be discussed in the next section of the article.
- A good PSP will be connected to and be able to process many different payment methods that may not yet be offered by the merchant. This means that, even if you are using a payment method from your bank that the shop or the company you are buying products or services from is not familiar with, you can still use the PSP to pay, and the merchant will be able to get their money because they are connected to your bank via the PSP.
Why Integrate the PSP with Your CRM System?
The most important job of a CRM is most probably to keep a record; of your customers' purchase history, activities online, their interactions with your business, and also of your own company’s activities. If you can manage to keep track of everything, you will be able to analyze your organization's strengths and weaknesses to improve the performance of your team.
The purpose of integrating the payment service provider with your CRM system is not far from the abovementioned reason. Integrating your PSP with your CRM automates so many tasks for your team and saves you a lot of time. For example, your CRM will be able to capture all the information you need for issuing reports on your closed deals and payments automatically and then import it to the system. This way, your team will be able to save so much time by not having to put in all this data manually.
We talked about the security of payments for customers using PSPs because they do not have to share their credit card details with merchants, and all the information will be passed on to the acquirer safely.
However, the other side of the story is the security for the company. Businesses move huge amounts of money every day, from clients to their own accounts and from their accounts to other companies for various reasons. Security in these transactions is very crucial to any business owner. By integrating a good and secure payment service provider such as PayPal or Stripe on your website, you can make sure that your funds in your bank accounts are safe from any breaches. Plus, your transactions are also encrypted, and your customers will not be able to access your bank account details.