Integrated vs Non-Integrated Payment Processing

Are you unsure of the differences between integrated and non-integrated payment processing? Or maybe you have some familiarity… but you’re having trouble weighing the pros and cons of each solution?

Either way, you’re in the right place.

In this article, you’ll learn the meaning of  integrated and non-integrated payment processing, what each one brings to the table, and how to know which one is right for your small business.

What Is Integrated Payment Processing and How Does it Work?

Integrated payment processing is when your point of sale (POS) system is directly linked to your credit card processor to streamline the checkout process and quickly process payments.

They communicate with each other directly, eliminating the need for manual data entry on your part.

Here’s how it works:

1. A customer goes to the checkout counter and presents items to the cashier.
2. The items are scanned into the POS.
3. The cashier finalizes the sale, entering the type of tender.
4. The customer is told and/or shown the total.
5. The PIN pad shows that it’s ready to accept the payment.
6. The customer makes the payment.
7. The POS notes the approval number and the amount paid, and prints the receipt.

Pros & Cons of Using Integrated Payment Processing

Pros:

• Fast checkout: while a lot happens behind the scenes with integrated payment processing, it takes very little time to go through all the steps.
• Simplifying end-of-day reconciliation: your POS automatically captures the payment types, totals, and all other sales-related information.
• Greater security: integrated payment systems usually use encryption, tokenization, or other secure methods to transmit/store sensitive data.
• Easier data management and tracking: relevant transaction data like customer information, purchase history, and payment type is automatically collected and organized.

Cons:

• Higher cost: compared to non-integrated payment processing, this type of system might be a bit more expensive.

What Is Non-Integrated Payment Processing and How Does it Work?

Non-integrated payment processing is when your POS system and your credit card processor have separate communication lines and aren’t connected. In other words, all the payment data needs to be entered manually.

Here’s how it works:

1. A customer approaches the checkout counter with their items.
2. The cashier scans the items into the POS.
3. The sale is finalized, and the cashier enters the type of tender.
4. The customer is informed of the total.
5. The cashier asks for payment, the customer responds, and the cashier enters the choice of the customer.
6. The customer provides their card.
7. The cashier picks the “sale” option on the PIN pad.
8. On the PIN pad, the sale amount is entered by the cashier.
9. The sale is completed.
10. A copy of the receipt is printed and stored by the cashier.
11.  The card interaction with the PIN pad is completed and the credit card receipt is printed.

Pros & Cons of Using Non-Integrated Payment Processing

Pros:

• More affordable: non-integrated payment processing may be cheaper than integrated payment processing.
• Familiar: many small business owners are already familiar with non-integrated payment processing and have been manually entering data for years. 

Cons:

• Higher chance of errors: due to the lack of automation, non-integrated payment processing often increases human error. This can lead to a lot of wasted hours going through different systems to figure out what’s wrong.
• Slower checkout: the checkout process takes a lot longer for both you and the customer, which leads to a decrease in customer satisfaction.

Integrated vs Non-Integrated Payment Processing – Which One is Right for Your Business?

Ultimately, the right choice between these two payment processing solutions depends on your current business needs and goals, transaction volume, size, and budget.

If your day-to-day involves handling a higher volume of transactions or you’re simply spending too much time on each checkout, then an integrated payment processing solution might be the right choice.

While non-integrated systems are more affordable, they can lead to costly mistakes and a decrease in customer satisfaction.

With that said, non-integrated payment processing is sometimes sufficient for small business owners who do not process many payments, such as a consultant who works with a small number of contractors.

Streamline Your Checkout Process with Gravity Payments

At Gravity Payments, we understand that implementing a new payment solution is a big step for your small business.

So, we take the time to learn about your business challenges, allowing us to point you in the right direction.

Learn more about how Gravity can help your small business.