What is an Automated Payment System

Payments Learning Resources

What is an Automated Payment System

One of the common questions that we get asked is what is an automated payment system and how does it work?

What is an Automated Payment System

A woman making payments at her desk with the camera having taken the photo from a birds eye point of view

Payment automation solutions relate to making the payment process fast and efficient for both merchants and their customers.   As the number of your online orders and transactions grow, you will be faced with the challenge of reducing your relevant operational costs.  By adopting payment automation solutions such as batch payment processing and recurring billing, you can focus on growing your business while you reduce payment-related administration costs.

How does auto pay work?

Auto pay works by batch payment processing, where a merchant can upload multiple transactions into a payment gateway, or by recurring billing, used most with online membership packages or subscriptions.

How do I set up automatic payments?

Automated payments involve setting up payments to be deducted automatically from the customer's credit and bank accounts at agreed upon schedules (daily, monthly, etc.).

Batch payment processing

A vector image of three euro coins set in front of a ticking clock illustrating batch processing

Batch payment processing is the process of taking a ‘batch’ of authorization requests and sending them to the payment processor for settlement.  This is done by merchants in order to retrieve their money from customers’ bank accounts.  Manual processing of hundreds, or even thousands, of transactions every day is definitely a time consuming task for your business.  With batch payment processing, you can upload a file to the payment gateway with all the transactions you want to process and save time that can be used on other tasks.

To utilize this solution, is important to choose a PCI DSS Level 1 payment gateway, like the one provided by Powercash21, to ensure payment security. Along with a suite of fraud management tools, Powercash21 supports merchants in automating the processing of multiple transactions instead of submitting the authorization requests individually.

Benefits of batch payment processing

  • Improves customer experience - Apart from time and cost saving, batch payment processing improves the customer experience as well. When customers proceed with a purchase, their payment is authorized instantaneously so their part in the transaction is completed quickly and seamlessly.
  • Better organization - Another benefit of automating your payments through batch processing is better organization of transactions.  When payments are processed and stored in batches, all transaction details can be reviewed and managed easily.
  • Reduces payment risks - There is no manual storing and processing of credit card information, which means that the risks involved are minimized.  A PCI-DSS certified payment gateway is essential for the secure storage and processing of sensitive cardholder data.

Recurring billing solutions

a laptop displaying payment options on the screen set on top of a black desk

Online merchants utilize recurring payments to get paid by customers on a prearranged schedule.  Cardholders give a one-time consent to the merchant to charge their credit card on a recurring basis until they withdraw their consent. This payment automation solution is ideal for merchants selling subscription-based products or services. From eLearning services to food product packages, there are several types of businesses that can benefit from subscription models.

To validate the credit card used when customers sign-up for recurring billing, merchants usually request a preauthorization of the card for €0 or €1.  If the card is valid then the actual payment will be successful.

Benefits of recurring billing

Some of the main benefits of utilizing recurring billing solutions include:

  • Less late payments for the merchant
  • Easy modification of the preferred payment method and the subscription plan by the customer
  • Better cash flow predictability for the merchant
  • Receipt is sent automatically to the cardholder by email or text

Reliable payment solutions providers, such as Powercash21, also offer card updater services to ensure that card information is up to date and recurring billing functionality is not interrupted. With card updater services, real-time account updates are received during authorization, to ensure the subscription customer card details are updated in cases where a registered credit card has expired or was reported lost and a new card was issued. 

Read more about Recurring Payments here.

Do automated payments affect credit score?

Automatic payments can affect a business' credit score positively, due to the automatic payment of bills and other transactions.

Automate your payment processing with Powercash21

Payment automation functions are mutually beneficial for merchants and shoppers.  Powercash21 understands the importance of operational efficiency for your business and provides payment automation solutions to support you.  By using our PCI-DSS Level 1 certified payment gateway, we can ensure you that all automated transactions are processed in a highly secure environment.

To implement an effective automated payment system, get in touch with Powercash21 today!

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