Merchants often have trouble tracking credit card transactions through to cash in their Bank. This becomes incredibly confusing as you start to layer in more than one sales channel, which typically will require different vendors, to the ones already in use.

The complexity of multiple vendors, the associated logins, and receiving one daily deposit for a group of transactions, leaves merchants with the challenging task of trying to match which payment is in what deposit. Additionally, what other items may be deducted from the deposit:

  • Transaction fee costs
  • Reserve
  • Disputes

Many businesses have very similar issues surrounding cash reconciliation because while processing a credit card transaction at the point of a sale seems simple enough, getting a complete picture of what exactly has happened can be quite confusing as well as very time-consuming.

Let's explore the issues:

Issue #1: It can take many vendors to make a credit card transaction happen.

The undertaking of processing credit card purchases and making sure that the money ends up in the right place, at the right time, and the revenue is recognized in General Ledger - is much more involved than it would first appear.

Most payment transactions involve multiple intermediaries ranging from software solutions to financial partners, just to process one transaction regardless of whether selling only online or through other channels such as in-store or over the phone.

For instance, when a merchant accepts a credit card for an e-commerce purchase, it usually takes at least five different vendors to conduct and complete the entire transaction.

The transaction flow is illustrated below:

The e-commerce Vendor supplies the e-commerce platform, which provides credit card acceptance capabilities.

The Payment Gateway acts as a mediator between the front-end e-commerce platform and the Processor.

The Processor establishes a connection with the various credit card networks, settles each transaction and then forwards the results to the Acquiring Bank. The Processor is, you might say, the "man behind the curtain."

The card brand network is the credit card networks that provide credit to your buyers and manage the whole consumer end of the process.

The Acquiring Bank (also known as the merchant acquirer), approves merchants to accept a credit card payment from their customers and fund the transaction.

The final vendor in the chain is the Bank, where the merchant's deposit account is held.

Additional vendors may be involved to support purchases using other sales channels like a mobile device, the phone, the mail, recurring or in-person.

The main takeaway here is that there are a lot of moving parts within a single credit card transaction. Each vendor involved in the payment handles a piece of the transaction. But no vendor has an overall view that encompasses the entire transaction process from beginning to end.

Issue #2: Multiple reports, different formats.

Every one of these vendors sends or provides an online report for merchants to review and verify each purchase. An issue that typically arises is that the numbers in these various vendor reports may not match one another - figuring out precisely how they don't match and why isn't easy. For example, the Payment Gateway shows you all sales, regardless of success or failure. In contrast, the Processor may only present to you successful transactions, followed by the Acquiring Bank, who in turn, may only show you the totals for a given settlement day. Now layer on that each of these players has different cutoff times, to support the batch processing that completes the payment transaction after approval.

To add to this complexity is the data presented by each of the vendors. The only guaranteed information is the payment amount, along with the invoice number (as this field is supported by the Issuers as well). So how do you then know what batches have been paid, and which payments are included?

You will also find that vendors have different names for the same transaction field. When the merchant sells through multiple channels, they very likely have separate processing accounts to handle, say, their online transactions from those conducted in-store.

The result is often much confusion and a lot of time spent on separating and organizing all these reports.

Issue #3: More vendors = multiple fees.

The additional problem with having multiple vendors is that merchants are charged fees every time a vendor touches a payment. This also means having to analyze the separate statement reports you have received from each of the vendors.

The complexity of so many vendors can make it challenging to determine exactly why and how you are being charged.

Once again, all the analysis takes time. Sometimes lots of it.

Solution: Simplified Reporting Makes It Easier To Follow Your Money

Having access to an integrated payments reporting platform that tracks payments from the initial sale, all the way to cash, as well as from cash to each of the transactions that composed the deposit to a businesses' bank account can make a massive difference in the day-to-day running of a business.

The reporting platform should also support the ability to consolidate reporting for multiple accounts, simplifying the management of these accounts.

Also, merchants should be able to customize and save their reports for later and be able to download or access via an API, for easy import into accounting platforms.

Working with an integrated payments provider means that merchants can go directly to just one vendor and save the potential problems inherent in relying on a processing system that depends on multiple independent vendors.

About Qualpay

Qualpay is a fully-integrated payments platform that utilizes the most up to date technology to reduce costs and streamline back-office operations. Its comprehensive system addresses and resolves the payment challenges businesses face, ensuring a stronger, more robust infrastructure that allows companies to focus on growing their business. Qualpay's reporting intelligence and data analytics allow customers to quickly and efficiently manage their payment finances, saving them both time and money. Simply put, Qualpay provides a better way to manage payments. For more information, please visit