How to Build Your Ideal Payment Stack

What is a Payment Stack?

A payment stack  is a set of technologies that are utilised to build payment software. It refers to the combination of software, applications, and services that power a business’s ability to accept payments from customers. 

It includes the payment gateway, payment processors, merchant accounts, and other tools that allow money to flow securely between a customer’s bank account and a merchant’s bank account. Having the Ideal Payment Stack is essential for businesses to optimise payment workflows, reduce costs, and offer customers their preferred payment methods.

Why is a Payment Stack so important for business?

There are several key reasons why having the Ideal Payment Stack is Important for any company accepting online or in-person payments:

1. Increased sales and revenue: Offering multiple payment options increases the chances of a customer completing a purchase.
2. Simplified payment processes: An ideal payment stack streamlines workflows and minimises issues for both customers and teams.
3. Lower processing fees: Partnering with the most cost-effective processors, gateways, and value-added services saves money.

Key components of a payment stack:

1) Payment gateway: 

A payment gateway refers to the link between a company’s website and its merchant account. It allows online payments to be processed securely and helps transmit sensitive financial data to the payment processor. The payment gateway decrypts the information and forwards it to the corresponding payment network for authorisation.

2) Payment processors: 

Payment processors are the companies that facilitate the actual transfer of funds between merchants and cardholders. It integrates with gateways to process transactions from various payment methods and sends funds to the merchant. They take a small percentage of each transaction as a fee.

3) Merchant account: 

A merchant account is an account established by a merchant with a bank or payment processor that allows them to accept payments from customers via credit cards, debit cards, and other payment methods.

4) Fraud prevention tools: 

Fraud prevention tools are important to minimise fraudulent transactions and reduce chargebacks. These tools analyse each transaction for risk factors and flag fraudulent activity in real-time. Some key fraud prevention tools include velocity checking, device fingerprinting and geolocation verification.

5) Digital wallets: 

Digital wallets allow customers to store their payment credentials, like credit/debit cards or bank account details, to enable seamless checkout. These wallets simplify the process for customers by eliminating the manual entry on merchant websites or apps for each transaction.

6) Billing/subscription management: 

Billing/subscription management refers to the software and services required to manage billing customers and process recurring subscription payments. This includes features for issuing invoices, handling billing schedules and cancellations, tracking payment history and managing customer billing profiles.

How to Build Your Ideal Payment Stack

According to Statista, 80% of e-commerce revenues are generated through digital payments. So you need an Ideal Payment Stack to scale up your business.

1) Evaluate business needs and goals

Consider factors like the types of payments you need to accept, your target customers, geographic regions of operation, and industry-specific requirements. Define what payment methods are comfortable for your customers to use in terms of popularity and coverage.

Determine what level of payment security and fraud prevention is required. Payment processing costs and integration complexity should be weighed against potential revenue gains from supporting additional payment options. 

2) Research provider options

You need to make a list of all potential payment processors, gateways, and other service providers that can integrate with your business model and technical requirements. Research should include understanding their features, pricing plans, security protocols, supported currencies and regions.

You should also check online reviews and case studies of how other similar businesses have integrated them. This research will help you shortlist the best providers

3) Test integrations

It is important to thoroughly test each integration individually before putting them into production. Test all the functionalities like making payments, refunds, recurring payments, etc. Ensure the data is being passed correctly between your system and the payment providers.

Test in all environments like development, staging and production to identify and resolve any issues. Payment integrations require high reliability and security, so testing is important before going live.

4) Select an integrated partner

Once you have selected the payment processors, you will need an integrated partner to help facilitate connections and transactions between them. Look for a partner that can integrate with all the processors on your stack.

An integrated partner will save you time and reduce errors. They should also provide ongoing support to help manage your payment flow as your business grows.

5) Maintain compliance

It is important to maintain compliance while building a payment stack. This involves complying with PCI DSS standards to protect cardholder data, and payment methods like credit cards, debit cards, etc. 

It also means keeping up to date with the latest requirements from payment processors, banks and regulatory bodies. Regular audits may need to be conducted to ensure compliance. Non-compliance can result in fines.

6) Monitor performance & Sales Infrastructure

As your business grows, you will need to monitor the performance of your payment stack closely to ensure it can scale efficiently. This involves setting up monitoring tools that can track key metrics like transaction processing times.

Based on the data, you may need to optimise processes, add additional servers, or upgrade existing hardware to handle higher loads. Scaling is important to maintain a seamless customer experience as demand rises.

NTT Data Payment Services’ unified payments stack approach

NTT DATA Payment Services offers a complete payment solution to advance both your offline and online businesses. From online payment gateway and mPOS to IVR payments and Bharat QR Scan and Pay, we ensure maximum comfort, convenience, and safety for all your payments.

NTT DATA Payment Services offers a Payment Stack that combines gateway, processing, and more. We provide a scalable platform with built-in compliance and security. Our stack approach simplifies setup and management.

Conclusion

Building the ideal payment stack is not just about choosing the right components; it’s about ensuring that each piece works together to create a system that is scalable, secure, data-driven, and integrated with your existing business systems.

The right payment stack optimises processes, reduces costs and risks, improves the customer experience, and fuels business growth. With careful planning and maintenance, merchants of any size can develop a payment infrastructure optimised for success.

FAQs

1) What is a payment stack?

A payment stack refers to the combination of technologies like payment gateways, processors, and services that allow a business to accept online and in-person payments from customers. 

2) Why is building a payment stack important?

An ideal payment stack is crucial for businesses to increase sales, reduce payment failures, simplify processes, lower costs and offer customers their preferred payment options.

3) What are the key components of a payment stack?

The major components include the payment gateway, processors, merchant accounts, fraud prevention tools, digital wallets, and billing/subscription management systems.

4) How do I evaluate my business needs to build a payment stack?

Consider factors like payment methods needed, target customers, regions, industry requirements, and security level required, and weigh processing costs against potential revenue gains from new options.

5) Why should I select an integrated partner?

An integrated partner can facilitate connections between different providers, save integration time and costs, reduce errors and provide ongoing support as the business scales up.