Payment processing: integrated vs. non-integrated

From the consumer’s perspective, paying for something is pretty straight-forward. But the truth is, the whole process of having customers pay with a card can be quite confusing for new business owners.

Over the next few months, we’re demystifying how payments work: from the moment you start a new sale on your POS, to when the “approved” screen pops up on your terminal.

  • What are your payment setup options?
  • Which solution is best suited for your business?

Having the answers to these questions will ensure you pick the right payment provider for your business the first time around.

 

Rather watch than read? Our expert Bram lists all the benefits of integrated payments.
*Note: This video is only available in the United States.


So what are my options, and how do I know which one to choose?

As far as your checkout workflow goes, you can either choose to have your payment processing integrated or non-integrated to your POS (or eCommerce platform). In simpler terms, it’s like saying your payment terminal either speaks to your point of sale, or it doesn’t.

Let’s give some context to properly illustrate the difference between integrated and non-integrated payment processing.

Here’s the scenario:

A woman is out shopping, looking for a new pair of running shoes. Let’s name her Sophie. She walks past your window display, spots the exact pair she wants and enters your shop. You pull out a box in her size and you enter the order on your iPad to process the sale. The bill comes out to an even $100, and Sophie chooses to pay with a credit card.

If your POS has integrated payments, i.e. speaks to your POS:

  1. Create a new sale & scan the item.
  2. Select the payment method your customer would like to use (cash, debit, credit, gift card, etc.).
  3. Your POS will automatically sync this information to your terminal, prompting Sophie to complete payment, then automatically communicate this back to your POS and complete the sale.

$ Payment processing: integrated vs. non-integrated | Lightspeed POS


If your POS has
non-integrated payments, i.e. doesn’t speak to your POS:

  1. Create a new sale & scan the item.
  2. Select the payment method Sophie would like to use (cash, debit, credit, gift card, etc.).
  3. Grab your terminal and manually input the amount.
  4. Once payment is complete, retrieve the terminal and printed receipts.
  5. Manually mark the purchase as paid and conclude the sale in your POS.

$ Payment processing: integrated vs. non-integrated | Lightspeed POS

Still have questions?

Download our white paper on payment processing to get all your answers

If you were to choose non-integrated payments, not only are you adding more steps to your checkout process, you’re also missing out on all that valuable data that comes with every transaction. The only information you would be collecting is the fact that there was a sale, and that a card was used to pay for it. How does that help grow your business?

This year, we’ve surveyed over 1700 of our customers and asked them what type of payment processor they use. A whopping 64.5% of them said they use integrated payments. Roughly 15% of those who said they weren’t using integrated payments also stated they were in the process of switching. The market is clearly shifting towards integrated payments, and with good reason.

Now, let’s say Sophie was purchasing the pair of shoes online. Again, her experience would be affected by your choice of either integrated or non-integrated payment processing. But how?

$ Payment processing: integrated vs. non-integrated | Lightspeed POS

If you have integrated payments online:

  1. Sophie finds the shoes she wants and adds them to her cart.
  2. Sophie proceeds to checkout, enters her personal and payment information all on one page, without any redirects, and concludes her order.

If you have non-integrated payments online:

  1. Sophie finds the shoes she wants and adds them to her cart.
  2. Sophie proceeds to checkout and enters her personal information.
  3. Sophie gets redirected to a third party landing page to enter her payment information. A popular example of this would be Paypal.
  4. Once payment information is entered, and payment has been authorized, she gets redirected back to the merchant’s website where she will be prompted to confirm her purchase, thus concluding her order.


What kind of effect does a lengthier checkout process have on a customer’s experience? Or the illusion that their information is being recorded twice online with 2 different parties? The transaction might be perceived as a scam.

Although having Paypal as a payment option is accommodating for many online shoppers, strictly offering a non-integrated payment service adds more steps to your checkout process and consumes more of your customers precious time. This ultimately pushes customers like Sophie to abandon their cart and lower your conversion rate. If you simplify your customers purchasing process, you’ll reap the rewards.

Think about the kind of shopping experience you want to offer your customers in store and online. Think of your own experiences when shopping at your favorite stores and what you enjoyed about their checkout process. Chances are, integrated payments are part of that winning equation.

Evidently, an uninterrupted communication between your payment terminal and your POS (or eCommerce platform) is essential if you’re looking to boost the efficiency of your checkout process, increase customer satisfaction, and eliminate the risk of payment errors and fraud. Plus, think of all the time you’ll save at the end of the day to close up your brick and mortar store.

Non-integrated payments may cost less to implement, but there’s a catch… the communication disconnect between your payment terminal and POS exposes your business to some expensive mistakes. Plus, if you ever run into an issue and need support, you’ll be stuck with having to coordinate with a third party to resolve it. Not fun.

Thinking of switching?

Learn more about Lightspeed Integrated payments