May 12, 2005, 12:00 AM

Why payments processing is more complex than ever

New transaction security measures, alternative payments, transaction volume and integration make outsourcing payments processing easier for retailers than managing their own systems – and that’s good news for Retail Decisions and other providers

Payments processing for merchants is becoming more complex in terms of the transaction volume being processed, how much information is passed back and forth to complete a transaction, alternative payment methods and new transaction security measures. And for providers of payment processing services such as Retail Decisions, that means both challenge and opportunity, Jeff Foster, executive vice president, tells Internet Retailer.

“The universe for online payments has expanded tenfold just in the last few years, he says. ”It used to be all credit cards, and getting an authorization back to a customer in a timely manner was all it was about. But these days, what retailers look for is back-end integration with their ERP systems. Instead of just delivering a switch, which was what we used to do, we have to deliver an entire platform.”

Developments such as the Sarbannes Oxley legislation and mandated transaction security measures associated with it have also had the effect of increasing business industry-wide for outsourced payment processors versus the option of building a payments engine internally, Foster notes. “We’ve been through the audit several times now. Our products are all certified and so are everybody else’s,” he says. “So to have a Retail Decisions or a CyberSource go through the annual audit versus doing it themselves is making sense for a lot of retailers.” >P> Retail Decisions, with about 800 customers including major retailers such as Wal-Mart Stores Inc., had revenues of about $70 million last year.


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