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The Importance of a Payment Hub Solution

Updated  |  8 min read
Key Takeaways
  • A payment hub solution is pivotal in modern financial ecosystems, streamlining and optimizing transaction processes. It consolidates diverse payment channels, simplifying complex workflows and enhancing efficiency.
  • This centralized platform ensures real-time transaction monitoring, reducing errors and fraud risks
  • It promotes interoperability, enabling seamless integration with various payment methods and systems.
  • The heightened security features of a payment hub safeguard sensitive financial data, instilling trust among users.
  • A payment hub not only facilitates swift and secure transactions but also adapts to evolving industry standards, making it indispensable for businesses aiming to stay competitive in the rapidly changing landscape of digital finance.

There are different names for this category of software solution, but the general concept is a Payment Hub or B2B payment gateway integration to an ERP, CRM, or other line-of-business application. In particular, having a payment integration that can prevent duplication of data and be as seamless as possible within a workflow is absolutely critical.

The reasoning for this is just the basic benefits for a team that’s working on a lot of information and doing a lot of transactions. If they’re already using an ERP or CRM system, it makes sense for them to be able to process payments within the CRM or ERP payment system.

Then, when a customer says they want to pay an invoice that's been outstanding beyond the payment period or for whatever reason they want to pay it, it would be ideal to be able to process the payment right away within the primary system of record, which is typically in the CRM or EMR payment system.

Payment hub system.

Payment Processors and Gateways Can Be Industry-Specific

Most of these systems do have some integration partners who offer highly integrated payment processing within the ERP or CRM or other line of business application. However, oftentimes there are partners that have integration options, but the transaction fees or the industry-specific offering that the payment processors and payment gateways that are highly integrated to a particular ERP may not be as advantageous as other offerings that are available.

A lot of payment processors and payment gateways will cater to a particular industry where they might cater to a particular volume, transaction size, transaction type, or industry because they're familiar with the risks in a particular industry and they're comfortable with assessing those and determining what a potential number of chargebacks might be, and other factors of that particular industry.

Therefore, based on certain criteria, they could help the company save some fraction of a percent on all transactions, not to mention fees and other financial impacts, for all transactions that are processed in this integrated payment model.

When you get to that level of savings at a pretty significant scale, even just a few million, if not tens of millions or more, those savings are very significant, especially since it’s going to be an operational cost that is reduced, and ongoing expenses basically forever. If, as a business, we can take advantage of more favorable terms and more favorable payment processing partnerships, then this is going to be beneficial to the company and to the customers as well.

Beneficial payment system.

What Prevents Companies from Attaining the Benefits of an Integrated Payment Hub?

However, there is often a barrier that prevents companies that have a highly integrated payment processor within their ERP from switching to a different payment processor. This is because many of the alternative payment processors don't have highly integrated payment hub solutions, which can cost upwards of tens of thousands of dollars or even hundreds of thousands of dollars, depending on the complexity of the functionality that’s needed.

The alternative is to do manual entry, as in, enter the information into the ERP and then replicate that to the payment terminal for the payment processor in order to actually process ERP payments. When this is done at scale, though, it’s really untenable to do. The fundamental solution is to implement an integrated payment hub provider.

Payment Hub Integration Solutions

So, Clarity has built Clarity Payment Hub, or a type of payment portal, that allows any of the dozens of payment processing providers that we work with, or any payment provider that has a payment API, to be integrated into any ERP system and CRM system, or any line of business application that has an API. Visit our Clarity Payment Hub page to learn more.

We now also have a solution called Clarity Payment Processing, where Clarity actually becomes your payment processor. We offer compeititve rates, no processing fees, and a payment solution that's tailored to your business. We optimize everything for your business so that you get the best payment processing solution that's out there, and we have high-end security you can trust. Visit our Clarity Payment Processing page to find out more.

How Clarity's Payment Hub Solution Works

how clarity's payment hub solution works

Invoicing and Payment Processing

How does invoicing and payment processing work with Clarity Payment Hub?

In the ERP, a workflow is triggered that says,“pay the invoice” and that sends a payment request to the Payment Hub, which can then process the payment. From there, you can simply use the payment hub to have integrated data with the invoices, including outstanding and historical invoices, and other options for updating a contact address, billing information, or payment information to a wallet, and so on.

We’re able to display this securely and with just the data that relates to a particular customer, for each customer that your company may desire to give access to for paying in a self-service model.

Essentially, we take care of the internal need for integrated payment processing with your ERP or CRM system by enabling functionality that allows someone within the ERP or CRM system, for an invoice or sales order, for example, to trigger a payment to process and then a job will fire off and process the payment.

Payment processed checkmark.

A Self-Service Portal

Additionally, within our Payment Hub, a user can go in and access a self-service portal.  You can think of it as a payment hub or a payment portal that the customer can go to and securely log in and see just their data and issue payments for invoices that may be overdue, etc., and see what any penalties are for that, and be able to set up recurring payments, etc.

This can be really helpful, of course, whenever you’re looking to scale your payment processing capabilities and not just enable internal automation, but also enable customer-facing self-service.

At Clarity, many of our clients who we're working with see this as a major benefit compared to having a highly integrated solution alone with a particular ERP.

Web design for a self service payment portal.

In particular, one of the key aspects of this integrated payment hub is being able to trigger payments from within our respective ERP or CRM system. Depending on the business, this may or may not be a key requirement. Many businesses will actually have their internal team operate directly from the payment hub itself and simply emulate customers when they call in.

So, a customer may call, and the customer service representative will go to the payment hub and process a payment for a particular invoice, and in many cases will set up a framed view. This can be an API frame, or it can be a simplified view of the payment hub within the ERP or CRM system, so embedding that within the respective line of business application so the internal user can get to the customer’s record and then process a payment using the ERP or CRM system, for example, or pull up the respective customer data from within the ERP or CRM system and then process payment.

Many customers will prefer to store their payment information in a wallet and allow the provider company, so your company or team, to process payments with their authorization without having to request the payment information again. This is commonly referred to as tokenization, so we'll set up tokenization for the payment information.

This can be set up for ACH transaction information, e-check, as well as for the most common scenario, which is credit card information. This can also be done for other forms of payment, like crypto payments, for example. Typically, though, the most common scenario is credit card payments, and we can store credit card information in a virtual wallet and tokenize that data.

Credit cards.

What Is Tokenization and Why Is It Important?

The general concept of a Payment Hub or any integrated payment usually incorporates a wallet to store payment information so that we don’t have to re-request it from the end customer. This can be particularly helpful if there is a recurring payment or subscription, but it’s also quite convenient for the end user even without a subscription to be able to approve payment as the authenticated user without having to re-input all the information each time.

However, this can also be insecure if the data is stored in an insecure fashion and if the credit card information is compromised. That can be a huge issue, both from a credibility perspective and also from a legal perspective.

The typical way to solve this nowadays is to set up what’s called tokenization, which essentially takes all of the sensitive card information, sends it to a very secure data facility, and the data facility returns back a random identifier that is unique to that particular wallet entry and to that particular customer and to that specific API access. This random identifier, or token, has no meaning if breached, but there are still several steps and methods for security to ensure a secure transaction every time.

Most payment hub providers give us the capability to store the data in a tokenized fashion for a wallet and return a token that is a representation of the contents of the wallet, without actually having the raw contents of the wallet in our system.

You can think of it as a safety security box, where you get the key and the number for the safety security box, but you don’t have the actual contents with you. In order to get those contents and use them, you have to go into the bank, be authorized to access the safety security box, and you may even go into a locked vault (that someone has to let you into after confirming you are the right person).

Website security for payment hub.

To confirm you are the right person, this can involve multiple layers of identification, such as ID, a retinal scan, a fingerprint scan, etc. There are multiple layers of security, and then your key has to work for the safety security box, and you have to know which one to use.

All of these different layers are very parallel in nature with tokenization for credit cards for payment information in general. And this is exactly what we’re doing when we’re setting up a wallet, and this really helps customers, and it ought to help your team internally as well, to rest easy knowing that the data is stored in a secure vault that's a very commoditized, heavily guarded, and has a really robust security framework.

The Payment Hub Wallet

Once the wallet is set up with the payment information, it's a lot easier for someone to make another payment. They can have multiple items in their wallet, so this will allow them to choose a payment method. For example, maybe there's a statement period that they're trying to stay within, and they don't want to have a balance on one of their credit cards right before the statement is due, so we can set rules for when recurring payments process.

We can also allow the user to make payments of multiple invoices with a single card or payment method, or they can pay a single invoice partially with a single card and split the payment of the invoice across multiple payment methods.

For example, let’s say it’s a million-dollar invoice and their payment methods have a limit of $100,000 a day. They may need to process the payment across three different credit cards that, over the course of four days, are used in order to process all the payments. It’s usually at a smaller scale than that, but that’s just an example to show how this works.

Electronic payment hub wallet.

Captured Funds with Preauthorized Payments

One of the other things it's really helpful with a payment hub, is being able to be able to pre-authorize a payment. For example, whenever there’s a large order, it may be helpful for your company to pre-authorize a payment, which actually puts a hold—such as an ACH hold—on the funds for typically seven days. That allows you to not capture the funds right away, but you can verify that they are available and put a hold on the funds with the payment method.

Then, once you have fulfilled the item or items that are associated with that particular preauthorization, then you will be able to capture the funds. This is a common workflow for just-in-time manufacturing, just-in-time inventory fulfillment, and similar workflows where you have a low inventory level, and we need to be able to move quickly and process orders quickly. The payment hub will allow the order to immediately get into processing by pre-authorizing the funds, so there’s no need to wait for funds to clear, etc. And then the capture allows the business to actually receive the funds into the bank account.

Payment Hub Architecture

As far as the architecture for a payment hub and integrated payment processing within your ERP, CRM, or other line of business application, we do set this up so that it can run as a SaaS-based or cloud-based offering.

Our offering can also run as a hybrid model where the integrated components that are working within the ERP, CRM, or related business application can sit behind a physical hardware firewall inside your on-premises infrastructure, or inside a separate cloud infrastructure that you may have set up with firewall and separate infrastructure.

From a security perspective, we can set up an all-on-premises deployment, or a within-your-cloud deployment as well, and it depends on the discovery process. We typically complete a discovery and upfront analysis of your project before engaging in the development work and deployment of the payment hub.

Designing payment hub architecture.

Clarity's Process for Integrating a Payment Hub Offering

The fundamentals, though, are that whenever you are running an integrated payment provider and enabling advanced features, some planning is required so we can make sure that we map the fields and the data that you want to push and pull between these systems appropriately. These advanced features can include things such as allowing a customer to process payments in a self-service model with wallet capabilities, potentially recurring payments, and the ability to pay and pull invoices from the ERP, CRM, etc., system.

During this discovery, we identify these details and will map them out with you and your team so that we can ensure we have an accurate plan that will get your customers access to the information they need while avoiding overwhelming them.

The other high-level component of the discovery is looking at your current infrastructure and identifying the best location for our single tenancy deployment, where you will have access to the full source code and your internal team will have access to resources on our development team, if desired, to be able to manage and expand the payment hub capabilities. Most of our clients are very busy and their team is very busy, and they really depend on our team to provide support, maintenance, and ongoing resources to adjust and expand their capabilities with their payment hub.

We certainly offer a robust set of options to provide ongoing maintenance after we complete your initial deployment, as well as service-level agreements to provide same-business-day support, 24/7 support, or 24/7 365 support with priority. These are all different scenarios or options we offer, and which one you choose will be dependent on the level of support you need to ensure you can process your payments and provide support for your payment hub as it makes sense for your business.

Payment hub communication support.

Pricing Options for Clarity Payment Hub

All our products have the option for you to pay either a monthly fee or a one-time license cost for the base functionality. Customizations and additional work beyond the base platform can be added on for an additional cost, which will depend on your line of business application and the features you need customized or added.

For the base functionality, or out-of-the-box platform, Clarity Payment Hub is $599/month, or you can pay the one-time license fee of $15,000 (not both). Visit our pricing page to learn more.

We also offer custom pricing for our Payment Hub (and other software) if you think you'll need more than what the out-of-the-box Payment Hub offers. However, our out-of-the-box platform is quite extensive already and you may find that's all you need; we also have different configurations of the Payment Hub that may fit your business.

If you do need to add customizations, though, don't hesitate to do so—having a system that fully responds to your business needs will pay you back much more in the long run. We also pride ourselves on our affordability and work with businesses of all sizes, so don't be afraid to take that step and ask us about our pricing for your particular project.

In fact, many clients will take the Payment Hub and expand on it and make very specific customizations for their particular business workflows. We have a consulting team that can provide consulting and bespoke development in order to implement whatever specific workflows and payment processes make sense for your business.

Need the Best Payment Hub?

We'd love to show you exactly how Clarity's works. Get in touch to see what it can do for you.

Web development.

FAQ

 

A payment hub is an eCommerce portal where customers can securely make and access payments online for an eCommerce website. It can be integrated into an ERP system, CRM, or other line of business application, and various channels. Payment hubs bring security, consistency, and ease of use to the eCommerce platform with their ability to bring together various types of payment methods and systems into one platform.

 

A payment hub is beneficial to be able to integrate payment processes into your ERP, CRM, or line of business application. It also enables functionalities that make payment processes easier and faster for clients and internal team members. Without a payment hub, data has to be entered manually, which is not feasible at scale. Therefore, having system automation within your payment hub is vastly beneficial to any eCommerce business.

 

Tokenization is a way to store payment information in a secure way, and that can be accessed securely. It works by turning payment information into a token, or randomized identifier, that has no meaning if breached. The same payment method for an eCommerce site can be used again without the end customer having to put in the information each time.

 

Tokenization works by taking sensitive payment information and sending it to a secure data facility. The data facility then returns a random identifier that is unique to that specific wallet entry, customer, and API access. This method is a very robust and secure way to allow customers to save their payment information and methods to their digital wallet within the eCommerce website.

 

Tokenization is useful because it allows a secure way to save or store payment information, such that a customer can easily authorize recurring payments or new orders and choose their payment method in their digital wallet without having to enter the information each time. It enables convenience for the end customer, and both the customer and business staff can be reassured that this convenience is secure.

 

Yes, payment hubs are designed to handle instant payments effectively. They play a crucial role in facilitating real-time transactions by acting as centralized platforms that can connect to multiple payment channels and networks.

Instant payments require seamless coordination and rapid processing, and payment hubs excel in providing the necessary infrastructure for such demands. They ensure quick and secure transaction authorization, leveraging advanced technologies to meet the stringent timelines associated with instant payments.

By consolidating diverse payment methods, such as mobile wallets, cards, and bank transfers, payment hubs enable businesses to offer customers swift and reliable payment options. The adaptability and scalability of payment hubs make them well-suited to navigate the complexities of instant payment ecosystems, providing a robust foundation for businesses in the fast-paced world of digital finance.

Still have questions? Chat with us on the bottom right corner of your screen #NotARobot

Author
 
Autumn Spriggle is a Content Writer at Clarity Ventures with experience in research and content design. She stays up to date with the latest trends in the eCommerce and software development industries so she can write content to help people like you realize the full potential for their business.

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