Payment Processing 101: It’s an Ecosystem

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Not so many years ago, payment options simply included cash, checks, and credit cards. Today, the options seem limitless as individuals are making online payments around-the-clock and employing technologies such as mobile point-of-sale (mPOS) and mobile wallet, among others. The evolution and adoption of financial technology (fintech) and payment processing continues at a rapid pace. As one Entrepreneur article states, “The reality is, new breakthrough technologies and digitization initiatives are reinventing the ‘art of the possible’ in payments and ushering in a new world of multiple wallets, ‘devices,’ and supporting infrastructure. More specifically, they are simplifying the payment process and rendering it invisible.”

As payment options continue to evolve, many people today simply swipe, tap, or flash their mobile wallets without a thought to the complex ecosystem involved in the transfer of funds. What really happens to these processed payments and what does this mean for the future of court and government payments?

smartphone paymentSmartphones have allowed for an extensive ecosystem of digital payments. Enabling payment options such as Apple Pay, Google Pay, and Samsung Pay allow smartphone users to experience mobile wallets easily. In a world where individuals are becoming not only accustomed to but also expectant of instant gratification, payment processing is becoming increasingly simplified. These instant payment options are widespread in both formal and informal payment scenarios, ranging from shopping, utilities, citations, bail, tuition, taxes, and more.

Thousands of companies are developing transaction options and updates for users to stay ahead of trends. Because so many companies are competing and collaborating to facilitate transactions both within and outside the fintech market, product competency and customer support are imperative for success. And with so many options, user education is critical. Finding and working with the right company can help ensure streamlined payment transactions.

The payment processing landscape

From the user(s) perspective, processing payments seems quite simple — you either make a purchase or accept electronic payments — but behind the scenes is a makeup of sophisticated and complex interdependencies and players — all interfacing, communicating, and exchanging data within their respective technology to facilitate the complete cycle of the payment transaction.

Below is a simplified overview of nCourt’s processing activities within the payment ecosystem:

  1. User — Makes a payment utilizing processing solutions offered by the court or government agency
  2. Court or government agency — Receives the user’s payment via the payment facilitator’s processing solutions
  3. Payment facilitator — Provides technology, payment platform, and value-added services – securely captures electronic transaction data for court or government agency and transfers appropriate data
  4. Gateway or processor — Receives data transfer file from payment facilitator for submission to card association such as Visa, MasterCard, AMEX, and Discover
  5. Card association — Routes the transaction data to the respective issuing bank for settlement
  6. Issuing bank — Approves or declines transaction data and submits response back to payment facilitator, sends credit card statement to user
  7. User — Is billed amount via the ticket or citation statement issued by the court or government agency, pays back the issuing bank
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Keeping up with a changing payment landscape

The speed of change in the payment ecosystem makes it difficult to stay up-to-date, which is why many courts and government agencies rely on third-party payment providers to help pave the way for innovative payment solutions. An experienced and knowledgeable partner not only helps to reduce costs and ensure seamless funds transfers but also stays abreast of next-generation payment options so courts and government agencies can focus on what they do best — serving the public.

With payment methodologies being driven more by end-users than ever before, it’s becoming equally important for the public sector to make payments as conveniently and seamlessly as possible. Consumers will continue to be the pivoting factor changing the payment landscape, so it’s important to partner with a provider who understands payments and the technology relevant to your market and organization.

[cta]With nCourt, payment processing becomes seamless, enabling you to provide online, mobile, counter, phone, and retail store payment options to make payments effortless and convenient. Learn more.[/cta]
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Mobile Wallets Continue to Increase

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Mobile payment transactions are on the rise, with market researchers expecting an increase of more than 200% in mobile payment transactions in 2017. This trend has left many courts, government agencies, and legal agencies wondering how the growing popularity of mobile wallets will affect court and other payment processing.

Mobile Wallets Defined

mobile wallet, as its name implies, is simply a virtual version of a physical wallet. It can store payment debit and credit card information, coupons, reward cards, and the like on a mobile device, enabling users to pay merchants who offer mobile payment services. Mobile wallet services, such as Apple Pay and Android Pay, ease the payment process for both users and those accepting payments.

Benefits of Mobile Wallets

Gartner forecasts that the worldwide mobile payment market will have more than 450 million users and a transaction value of more than $721 billion in 2017. With this incredible surge in the adoption of mobile payment applications and services comes opportunities for both government agencies and their citizens. So, what are the benefits to offering mobile wallet services?

  • Decreased payment time. With transactions processed immediately, payment reaches the agency quickly and efficiently.
  • Better security. Mobile wallets are more secure than their physical counterparts, giving users and agencies better peace of mind.
  • Convenient and efficient. Paper receipts are always inconvenient to keep. While it is important to keep a record of your transactions, paper receipts are not convenient nor efficient. Being able to have utilized mobile wallet services eliminates that stress.

Mobile Wallets Increase Payment Options in Government Agencies

As with financial institutions and retailers, government agencies can benefit from the flexibility and ease of use offered by mobile payment transactions. By giving citizens the ability to pay with debit and credit cards, Apple Pay and Android Pay, government agencies enable convenient payment in whatever format works best for citizens. This approach helps ensure quick and timely payment without processing hassles and overhead and enables courts and government agencies to improve customer service while reducing processing burden.
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NFC Payments in 2017 and Beyond

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Likely, you’ve heard of Bluetooth, radio-frequency identification (RFID), or quick response (QR) codes but perhaps haven’t heard of the umbrella term near field communication (NFC). NFC is contactless communication of wireless data transferred between devices, such as tablets, card readers, and smartphones. The data detects and enables technology in close proximity to communicate without the need for an internet connection. Using RFID technology, an NFC chip operates as part of a wireless link. Being able to activate and transfer data between devices then takes place and therefore, where mobile payments can be accomplished.

Even as users and service providers alike work to wrap their heads around mobile payments, the mobile payment industry continues to rapidly evolve, with major growth taking place in the NFC payment arena. As the technology has evolved, it has increased the range, speed, and messaging capacity of wireless devices.

NFC Is Here to Stay

If you’ve invested in the latest Apple phone, you’ve already felt the push toward NFC technology—Apple didn’t include a physical headphone jack, forcing users to embrace wireless connectivity to connect their wireless headphones to the phone. Through experiences like these, users will become more comfortable with wireless technology, and wireless payments will continue to become ubiquitous.

Benefits of Accepting NFC Payments

As mentioned in our recent mobile point-of-sale (POS) post, wireless payment offers many benefits to government agencies. In addition to providing another payment option, NFC payment platforms make the payment process easier, more secure, and more efficient. With credit and debit card data stored on a mobile device through an NFC tag, citizens can simply use NFC to connect to an agency payment processing NFC device to make payments. These payments process efficiently, making the funds quickly available to courts and making the whole process as easy as swiping a device.

NFC for Government Payments

With wireless technology employed for everything from jamming out to iTunes to photo sharing among devices, it was only a matter of time before NFC payments became popular. For busy moms checking out at the grocery store to hipsters buying a flat white at the coffee shop, NFC is becoming the norm. By offering mobile payment processing through NFC technology, courts and government agencies can increase efficiency, improve payment security, and enable convenient payment methods to citizens.
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What is Mobile Point-of-Sale (mPOS) Technology?

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Mobile point-of-sale (mPOS) technology enables payment through online, tablet, and mobile phone avenues and it is growing in popularity by the moment. Basically, with an mPOS app installed, this technology makes a wireless device act as a cash register or electronic point-of-sale terminal. The app is linked to the users’ credit card or bank account, and the business or organization taking payment simply uses a digital reader to conduct the whole transaction. So instead of carrying a wallet and checkbook and going through a manual payment process, mPOS simplifies payment by using whatever wireless device works best for the user.

A report from Global Market Insights reveals the current widespread adoption of mPOS technology as well as its bright future. According to the report, mPOS terminals will have a compound annual growth rate of more than 19% from 2016 through 2023. At this rate, payment via wireless technology will quickly become the norm from industries ranging from healthcare to grocery shopping.

Mobility Equates to Convenience for Courts and Citizens Alike

Enabling citizens to make payments via mPOS terminals is a win-win for both courts and payees. The convenience of mobility offers the following benefits to courts and citizens alike:

  • Reduces overhead costs
  • Makes it convenient and easy to make payments
  • Increases productivity and simplifies the process of those taking payments
  • Eliminates the time delay of payment processing

How mPOS Increases Value

mPOS technology is quickly and continually evolving. As such, current mPOS terminals provide additional value to judiciary systems and the citizens they serve. These developments are making it even easier for citizens to make payments wherever and whenever it’s convenient, saving time and effort for courts. The reality is, it’s become critical for all service providers (including the courts) to keep a pulse on technology. Although there are—and always will be—other payment options available, mPOS has proven to be the preferred payment option for everything from hamburgers to doctor’s visits. As such, courts need to ensure their technology can interface with citizens’ mobile payment preferences. As this technology becomes more available to cash paying citizens, courts should be focused on making mPOS a viable form of payment before the market opens—not after. Early adoption and staying ahead of the curve ensures public trust and positive opinion and eases the processing burden on courts.

Omni-Channel Payments are the Optimal Option

The rapid widespread adoption of mPOS highlights the importance of omnichannel payments. With nCourt, you can offer citizens’ multiple payment options, including online, phone, or at the counter in your offices. Our innovative payment solutions offer citizens the ability to pay for traffic citations, parking tickets, restitution, court fines and fees, probation, and more using a major credit or debit card and with no processing costs to you. In fact, citizens can pay using any mobile device, including smartphones and tablets. Simply request your free payment processing demo and we will be happy to provide an overview!
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