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A complete guide to e-Transfer for Business Payments

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The pandemic brought us many things. Many challenges of course, but there were also a few bright spots that we like to refer to as COVID silver linings. One silver lining was the increasing demand for innovative payment solutions and the switch to digital payments becoming a necessity for businesses—seemingly overnight. 

Any business that was teetering on the edge of diving into modern times or staying back with cheques and antiquated systems really had no choice. They were forced to keep up with the rising demand for timely—and seamless—payment solutions.  

So, where do businesses go from here? We’ve put together a guide that dives into one of VoPay’s most sought-after payment solutions: e-Transfer for Business. 

With the addition of new features to the service over the past few years, the service powered by Interac Corp. has enabled the switch from traditional paper payments to digital payments, a smooth transition for enterprises across Canada. 

Interac Corp.

Here are some stats about our partner – Interac Corp.- and how we reached this point in 2021. 

Interac was launched in 1984 through the nonprofit Interac Association, a cooperative venture between five financial institutions: RBC, CIBC, Scotiabank, TD and Desjardins; by 2010, there were over 80 member organizations. Since then, year after year it has grown in strength and has been a staple in Canadian’s lives.  

In 2020, $489B was moved across more than 6.5B transactions on the Interac network. Similarly, businesses were receiving 21% more Interac e-Transfers in August 2020 compared to the previous February.

Additionally, the Bank of Canada designated Interac e-Transfer as a prominent payment solution, which means the Bank will ensure it remains a safe, practical and effective method of payment in Canada.

Trusted Payment Method 

By utilizing a payment method already trusted by millions of Canadians, businesses have a unique opportunity to take advantage of digital payment’s skyrocketing growth by integrating e-Transfer for Business solutions into their existing software or simply replacing cheques as their primary payment method. 

In this guide we will cover the following: 

  • What is e-Transfer for Business?
  • Bulk e-Transfer Payments Explained
  • Request Money Feature
  • Inbound e-Transfer
  • Common Use Cases
  • Benefits of e-Transfer for Business 
  • VoPay Integration

What is e-Transfer for Business?

Interac e-Transfer is a convenient way to send, receive and request money to and from individuals and businesses across Canada in a safe, secure and quick manner. The funds are transferred from one account to another, in near real-time. 

Given the previous stats, most people are familiar with how Interac e-Transfer works on a personal level. However, a more robust solution and a payment processor are required for a business processing large quantities of payments with higher amounts. VoPay’s e-Transfer for Business is a solution powered by Interac that enables businesses and enterprises to Send (Payouts), Collect (Request) and Receive (Inbound) transactions using only an email address. The service is accessible through VoPay’s API integration or online portal. 

Compared to traditional banking solutions that generally cater to small business volumes, VoPay’s commercial or enterprise-grade e-Transfer for Business solution allows enterprises to send unlimited e-Transfers in near real-time with a $25,000 limit for each payment.

We will break down the three payment flows in the next section starting with Payouts:

Bulk e-Transfer Payments for Businesses

Bulk Payables allow you to send payments to multiple recipients using an easy and secure API or file upload capability supporting commercial payments and high-volume transactions. It can help streamline loan payments, payroll and supplier payments for your business. It also ensures that the payment is sent to the right recipient, minimizing the chance of payments being lost or delayed in the mail or sent to the wrong account. Businesses can easily access transaction histories, connect to existing accounting software for advanced reconciliations and customize e-Transfers payment flows to suit their business model. 

Use Case: Optimize the insurance claim payout process and maximize customer satisfaction by sending e-Transfer payments directly to customers’ email or phone. Funds will be available in the receiving bank account within minutes. 

Take more control over your cash flow thanks to real-time bulk e-Transfer.

Request Money

Nobody enjoys chasing customers for payments, not to mention spending time and human resources on the process. Request Money empowers businesses to consolidate accounts receivable workflows by simply sending single or bulk payment requests to customers. Bulk Requests are created by uploading a secure file or API. Payment requests are sent by email or text and can be scheduled on a recurring basis.   

Use Case: Lenders can offer a simple and convenient way for customers to make loan repayments using Request Money. The lender can set up a one-off or recurring requests for payment and exceed customer expectations by utilizing a service they are already comfortable using. Once the request is accepted (see image below), lenders receive funds in minutes. 

Request Money payment flow is as follows:

e-transfer payments for the request money feature and how it works using the mobile version.

Inbound e-Transfer

With VoPay Inbound e-Transfer you can receive funds from your clients into your VoPay account conveniently and securely. The client initiates the transfer by sending the funds to your personalized email account and the transfer will automatically be posted in VoPay’s system.  Similar to sending a regular e-Transfer payments, end customers can send any amount to the email address provided. VoPay reconciles each payment using ERP or accounting software integration. 

Common Use Cases for e-Transfer

The e-Transfer for Business solution can be used for a wide range of purposes, with payment flows customizable to suit business needs. Some common payment use case includes:

Earned Wage Access: Employers can send real-time payouts of earned wages to workers’ eligible debit cards 

Lending: Lenders can offer a real-time loan funding option and exceed customer expectations when they need money quickly

Insurance: Optimize the insurance claim payout process and maximize customer satisfaction 

Gig Economy: Companies can give gig workers the option to receive speedy payouts for their work

The Benefits of VoPay’s e-Transfer for Business

✓ Simple Customer Onboarding 

No banking information is required from the recipient—simply their email address. 

Near Real-time Funding

 Funds are sent and received in near real-time. Transaction volumes are unlimited and businesses have the option to send bulk payments.  Recipients will have access to funds within minutes. 

Advanced Reconciliation

Simplify reconciliation by including invoice number, purchase order and payment details with each payment. Businesses receive a real-time acknowledgment that funds are deposited in addition to daily status reports. 

Commercial Funding Limits

Send unlimited transfers of up to $10,000 per payment, to multiple recipients at the same time.

High-Level Security

Our data standards are fully compliant with bank security standards with transaction data encryption through tokenization technology. Comply with ISO 20022 global standards with rich remittance data, enabling interoperability for ease of integration between ERP systems and accounting applications.

Simple Integration with VoPay API

VoPay’s e-Transfer payment services are made available through a comprehensive and customizable API layer that integrates seamlessly with your current infrastructure. Our innovative solutions can be used out-of-the-box or fully integrated with partners using our white-label API. All payment solutions are fully customizable, allowing businesses to manage the payment flows and branding. 

VoPay facilitates millions of dollars in e-Transfers every month. We serve all businesses that make payments, from lenders to insurance companies and subscription platforms to property managers. Thanks to our partnership with Interac, our e-Transfer for Business solution is transforming the way your business can send and receive payments.  Not only is it a safe and secure payment solution for all parties involved, but it is also now a necessity. Make VoPay’s e-Transfer for Business your COVID silver lining.

If your business is ready to take the next steps in integrating a seamless payment solution, contact a VoPay product specialist today to learn more.

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Open BankingPayment Platform

A2A Payment Disruption – What’s Next?

account to account payment

You’re going to hear a lot about account-to-account payments (A2A) in the coming years. Overseas, they are already causing disruption throughout the financial sector. In fact, according to the Worldpay Global Payments Report 2020, A2A payments are predicted to account for 20% of all e-commerce payments in Europe, surpassing both credit and debit cards by 2023.

What are A2A payments?

A2A payments are similar to P2P payments (here in Canada that typically means Interac e-Transfer). Essentially, A2A payments involve the transfer of funds from one customer’s account to another account at either the same financial institution or another one. 

This is done through ACH or ATM networks. A2A moves directly from consumers to a merchant bank account with no go-between. Overall, they reduce friction and delivery at a much lower cost due to their efficiency.  

Important to note: A2A payments aren’t necessarily new. Bank transfer services have existed for years, such as direct debit. Traditionally, consumers have used this service to schedule regular bill payments. However, through open banking and real-time payments, A2A has a genuine opportunity to become a credible rival to the card payment rail for everyday transactions. What has changed is open banking and APIs. Now, there’s the potential for open banking payments to reach anyone with a bank account, in a truly efficient way. Open Banking has helped A2A payments achieve greater reach.

Current state of A2A Payments in Canada

Canada has been a slow adapter of A2A payments. However, the financial services sector is undergoing a digital transformation which has seen banks move from legacy infrastructure to modern cloud-based technology. That said, payment rails, although evolving, largely rely on traditional card networks. And Canada as a whole is a heavy user of credit cards.

That said, Canada’s adaptation is expected to increase over the comings years due to:

  1. Increasing customer demand 
  2. Growing regulatory push
  3. Improving market infrastructure

Benefits of A2A Payments 

Credit Cards be Gone: Payments initiated through Open Banking are done via APIs connected directly to the bank, taking the card scheme operators and other intermediaries out of the equation. Think about the savings for the consumer and the business from not paying terminal fees (POS systems), credit card fees or interest.

Savings for Merchants: A2A is up to 90% cheaper for merchants. Ideally, these savings would also be passed onto the consumer and they’d be incentivized to switch.

Money moves Faster: While corporates can debate about which payment service is best–same-day ACH payments, EFT payments or otherwise–when it comes to B2B transactions, the movement of data alongside funds can be especially useful to accounts payable (AP) and accounts receivable (AR) departments.

A2A is Adaptable: A2A payments can move funds from one company’s bank account directly to the recipient’s account using a variety of payment networks. A2A transactions can also integrate with back-office systems like enterprise resource planning (ERP) and AP applications.

Ideally, these benefits will lead to a trend where the adoption of A2A payments might be driven by Open Banking regulations that allow customers to initiate payments on third parties platforms by linking their bank account thus enhancing the customer experience. The development of these projects is noticeable, as they plan to disrupt the current ecosystem where credit card schemes play an important role.

This has happened around the world, where A2A payments overpower credit cards: iDEAL in the Netherlands, Swish in Sweden and MobilePay in Denmark. Trustly is offering one integration to enable online banking e-payment acceptance in multiple countries. We will be watching how consumers and merchants embrace A2A payments around the world.

Where do we go from here?

Merchants need to adapt and consumers will embrace where we are headed with direct bank payments in the A2A space. Many in the industry are calling A2A payments an unstoppable force.

A2A Payments are routinely referred to as an alternative payment method, but over the coming years they’ll likely become a primary payment method. Here at VoPay, our main service includes account-to-account payment innovation. VoPay is the simplest way to bypass traditional payment methods and accept faster, lower-cost account to account bank payments. 

Speak to a payment specialist today to find out more about our customized account-to-account payment services.

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Online PaymentsPayment Platform

EFT Payments: A Complete Guide to EFT Payment Processing.

eft payments guide canada

The future is here. Now. 

Digital payments have arrived. It’s time for businesses to not only familiarize themselves with digital payments but embrace them and understand that they are a key factor in the growth and overall success. 

Businesses that have already made the switch to digital payments have reported many advantages over traditional payment methods. Here are the top two: Higher returns and increased convenience for staff. In Canada, the most common electronic payment is EFT, which securely moves money from account to account at financial institutions. 

The increased use of EFTs to make payments to contractors, vendors and other entities is leading to an increasingly paper-free banking system, where a large number of payments take place over digital networks. We will take a closer look at all aspects of EFT payments and how they benefit Canadian businesses. 

In this guide we will cover the following:  

  • What is EFT?
  • The Types of EFT Payments
  • Inefficiencies in current EFT Payments
  • How does an EFT Payment Work?
  • EFT vs ACH
  • EFT vs Wire Transfers
  • Pros and Cons of EFT Payments 
  • Are EFT Payments right for my business? 
  • EFT Use Cases
  • VoPay EFT Solution

What is EFT?

EFT stands for Electronic Fund Transfer and is the backbone of the Canadian payment industry. Electronic Funds Transfers offer a safe and cost-effective way to electronically credit or debit accounts at any Canadian financial institution in Canadian or U.S. dollars. 

EFT payments are useful for businesses and individuals alike, as they eliminate the need to write a cheque or use cash to pay for a business expense. These payments are often referred to as electronic payments, eCheck, electronic banking, or electronic bank transfers. We will take a closer look at all aspects of EFT payments and how they benefit Canadian businesses. 

Types of EFT Payments

There are many different types of electronic fund transfers, some of which consumers and business owners use on a daily, weekly or monthly basis. One main distinction for EFT banking is whether or not it requires human interaction to complete the transaction. 

For the purposes of this guide, our focus will be on EFT debits/credits or eChecks:

  • Electronic Cheque/eChecks: Electronic equivalent of a regular paper cheque. Using a bank account number and routing number, the eCheck can transmit encrypted data to make EFT deposits. 
  • EFT Credits: Electronically pay vendor invoices, bills and employees via account-to-account payments.
  • EFT Debits: Electronically pull funds from the customer’s bank account on a single or recurring basis. 

EFT transactions, across their many forms, make up the electronic banking industry. Each of the above EFT payment types shares one common element—they’re all connected to the Canadian banking network. 

Inefficiencies in Current EFT Payments 

Traditionally, EFT payments are manually processed through a Canadian financial institution. The entire procedure is labour intensive and lacks any form of tracing or visibility, which we will discuss in more detail below. 

1- Manual Processing and Labour Intensive

EFT payment services that are available through banks and credit unions are offered via an online banking service or through a file processing system. In both methods, the client must manually submit the transaction and it takes 3 to 5 business days to clear. Then the client must ensure that the transaction status is updated accordingly to reflect correctly on their books. This is challenging for businesses with hundreds of transactions; combined with this process having a high risk of human error. It becomes more complicated when the business needs to collect installment payments and then repeat this process weekly, biweekly or monthly.

2- Lack of Visibility and Transparency

Similar to cheques, if a business accepts and sends payments using outdated EFT banking methods, they are unable to verify any information about the payer bank account, ownership or availability of funds. They are not able to predict if the payment is successful and it can take up to 5 business days to have final confirmation. More importantly, the inability to connect existing banking systems to the business software or platform they use to manage their AR/AP, will result in manual reconciliation and updating the status of each client account. This can result in costly financial errors. 

In order to process EFT payments digitally, businesses must connect to a technology-driven payment gateway or EFT processor to eliminate the manual steps and allow businesses to have full control and visibility over their payments. 

How does an EFT payment work? 

Sending an EFT only requires the recipient’s bank account information to get started. Typical account information includes name, account number and institution/routing number. There are two parties: the sender of funds, and the receiver of funds. EFT debits (decrease) one person’s account and EFT credits (increase) the other person’s account. 

Use cases:

  1. A business can send an EFT payment to a supplier, vendor or borrower. 
  2. Or, a business may give customers the option to pay their invoice or bill via an electronic funds transfer. 

Pre-Authorized Debit (PAD) agreement 

Pre-Authorized Debit Agreement, or PAD, is an agreement between you and your customer that enables you to debit accounts on a single or recurring basis without getting permission each time. Payments Canada and its participant financial institutions established terms and conditions to make sure that PADs are properly authorized and to protect against improper withdrawals. These agreements are great because they remove several steps from the process and help you ensure that your payments always arrive on the expected day. PAD agreements can be in paper form or electronically embedded into the user journey. 

EFT vs ACH

EFT is a blanket term for all digital transactions, and an ACH is just one type of EFT.  ACH stands for Automatic Clearing House, run by an organization called Nacha (National Automated Clearing House Association) and holds the weight of the American payment industry. 

ACH connects the banks and creates a daily debit and credit tally. The ACH network processes EFTs in batches, which means that transactions are accrued throughout the day and processed later. Transactions processed through the ACH network take approximately 3 days to settle. ACH is a US-only network, therefore VoPay customers who want to make payments to US customers use our ACH processing service to process USD payments.

EFT vs Wire Transfers

Online transfer is where the old-fashioned concept of bank wire transfers meets the modern technology of EFT. Let’s explore the main differences between the two payment types:

  • Control: The business owner has full control over when the EFT payment processing occurs, enabling the payments to be debited from their client’s bank account on a particular day.
  • Speed: Wire transfers typically take around 3-5 business days to move money between bank accounts. EFTs are usually complete within 1-2 business days. In some cases, they are processed on the same day.
  • Cost: Bank wire transfers are usually very expensive, especially when it comes to international payments. While EFT can be very cost-effective, wire transfers are more expensive than other EFT methods, sometimes as much as $50 per international wire transfer. Processing costs for various payments are outlined below in the infographic.
  • Process: Often, a wire transfer requires taking a trip to the bank, especially for larger payments. EFT payments are completely digital through a payment facilitator. There’s no need to go to a bank, or even leave your office. 

Pros and Cons of EFT Payments 

Bringing your payment systems into modern times will benefit your business in many ways. Notably:

  1. Control and Visibility

One of the major disadvantages of using traditional paper payments is the lack of control over the payments. Businesses spend so much time waiting for: customers to review invoices, cheques in the mail and credit card transaction approval. On the other hand, EFT allows businesses to initiate payments from the customer and decide when the payment is withdrawn from the bank account. 

  1. Cost-Efficient 

Most online credit card processors charge 3% on every payment. It’s beneficial to provide more ways for your customers to pay, but at what cost? EFT costs as low as $0.50 per transaction with EFT processors like VoPay only charging a flat fee per transaction, saving businesses thousands of dollars per month.

  1. Flexible, Customer-Friendly Payment Options

Setting up recurring payments and deposits is quick and easy. And your customers will enjoy the convenience of making EFT payments (especially when part of a recurring payments plan), as the customer only has to provide their bank account information once and future payments are fully automated.

  1. High-Level Security

EFT payments are sent from one bank account to another and are sitting at bank-level security. By moving money electronically businesses reduce the risk of paper cheques being lost or stolen and reduce the risks associated with cheque fraud and forgery. By using payment processors or gateway like VoPay, businesses add an extra layer of security by utilizing the measures already in place. 

Some of the disadvantages of shifting business and personal banking processes to online systems are the same as upgrading any kind of process. It requires time, research and due diligence to look into security features, cost-benefits and effectiveness of EFT payment options. Likewise, other systems such as automated billing, invoicing and accounting systems may require updating and organizing digitally. The right payment technology partner can help make this transition seamless. 

Are EFT Payments right for my business? 

To determine if accepting EFT payments is right for your business, there are several questions you need to answer: 

  • Does your business currently require recurring payments?
  • Does a major proportion of your customers currently pay by paper cheques?
  • Does a significant proportion of your customers currently pay by credit card?
  • Do the fees for EFT processing save you money compared to credit card fees?
  • Would you be able to convert your credit-card-using customers to pay by EFT instead?

EFT payments will have substantial benefit to your business if you require any of the following:

  •  Pay employees, suppliers and utilities
  •  Collect payments from customers
  •  Need to improve security by reducing lost, stolen and forged cheques
  •  Wish to reduce late payments and associated charges
  •  Moving from manual systems to electronic systems
  •  Reduce credit card costs and operating expenses

Industry Specific: 

  • Lending/LMS: Optimized cash flow through faster payments and collections 
  • Real Estate: Streamlined back-office operations through reduced NSFs and delays in closing
  • Market Places: Increase revenue with reduced merchant fees and decreased chargeback risk
  • Crowdfunding: Improve payment security through verified users and data tokenization
  • Property Management Service: Collect recurring monthly payments and reduce returns by utilizing advance EFT account verification services

VoPay’s EFT Payment Solution 

EFT payments are not created equally thanks to our mission of digitizing online bank account payments with speed, transparency and traceability. VoPay’s EFT payment solution allows businesses to accept, collect and send EFT payments by connecting businesses to financial institutions across Canada. EFT payments are one of the main services offered by VoPay and you can set up either single or recurring payments to your vendors and suppliers using our API integration or white-label solutions designed for enterprises. 

Using a payment gateway like VoPay, to facilitate EFT payments removes the friction and inefficiencies associated with the manual processing that takes place if businesses set up EFT through their financial institution. The traditional process requires manual submission and complicated file processing from the payee to initiate the setup, whereas these onboarding steps are automated with a completely digital experience when using a payment gateway. 

VoPay offers two types of EFT Payments including Standard EFT and Intelligent EFT (iQ11). Businesses benefit from faster transaction speeds and lower costs from either solution.  

Open Banking Payments

For our clients, that means faster payments as well as the elimination of costly NSFs and slow cheque processing times. Our Open Banking payment technology securely validates bank account information for EFT payments without ever seeing the customer, business or vendor’s bank account or financial details. One-off or recurring EFT Payments can be processed through the VoPay API or portal with transactions clearing as quickly as the same day. VoPay can fully support EFT transfers for its Canadian merchants and enable electronic transfers using ACH for cross-border transactions.  

Bank EFT vs VoPay EFT Comparison

By partnering with VoPay businesses can leverage an easy-to-implement solution to debit or credit Canadian bank accounts electronically. We work with individual businesses to create the desired payment flows and processing needs that enable rapid scaling and seamless payments. For more information about EFT processing solutions, contact our payments team today! 

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Online PaymentsPayment Platform

Top 10 Reasons to Use VoPay EFT Payments

eft payments vopay

Electronic Funds Transfer (EFT) is incredibly popular in Canada. At last check it accounted for 77% of total payments —that’s almost 17 billion transactions in Canada.

It’s essential for businesses to recognize this number and accept that EFT usage will continue to increase. The COVID-19 pandemic pushed digital payments to the forefront and they continue on an exponential growth trajectory. 

So, what exactly is an Electronic Funds Transfer?

An EFT is a term that describes any form of money transfer that involves electronic processing, including e-check, direct debit, direct deposit, credit and debit transfers.

Traditional EFT vs VoPay EFT

EFT usage is growing exponentially for business, however, processing through EFT using traditional methods comes with its own set of challenges. EFT payment services that are available through banks and credit unions are offered via an online banking service or through a file processing system. In both methods, the client needs to manually submit the transaction and it takes 3 to 5 business days to be cleared. Manually processing has a high risk of human error and there is zero visibility of payments through the cycle. NSF and failed transaction fees are severely costly to businesses.  

See a full comparison in our previous blog.

Overcoming the Challenges

We have recognized these challenges and friction points in the processing journey and have made it our mission to combat these issues to enable EFT payments that are simple, fast and traceable. VoPay offers two types of EFT Payments including Standard EFT and Intelligent EFT (iQ11) through a developer-friendly API or online payment portal. Using Open Banking technology, our iQ11 service offers same-day EFT processing and full visibility into the lifecycle of each transaction as well as advanced bank account verification and reconciliations. Unlike traditional EFT, VoPay enables the business to verify key information about the payer including bank account, ownership or availability of funds. We are crushing barriers and moving EFT payments into the next generation. Businesses can benefit from faster transaction speeds and lower costs from either solution.   

Our Top 10 Reasons

Businesses across the country are consistently impressed by how beneficial it is to their bottom line to bring their payment system into modern times. There is a myriad of reasons regarding how it helps your business; we’ve dug around and here are the top 10: 

1. Control and Visibility

One of the major disadvantages of using traditional paper payments is the lack of control over the payments. Businesses spend too much time waiting on: cheques in the mail, customers reviewing invoices or credit card transaction approval. On the other hand, EFTs allow businesses to initiate payments from the customers and decide when the payment is withdrawn from the bank account. Businesses can track and view each transaction from initiation to confirmation and have access to full reporting for easy reconciliation. 

2. Cost-Efficient 

Most online credit card processors charge 3% on every payment. It’s beneficial to provide more ways for your customers to pay, but at what cost? VoPay charges a fixed fee per transaction, ultimately saving businesses thousands of dollars per month. 

3. Flexible, Customer-Friendly Payment Options

Setting up recurring payments and deposits is quick and easy. Your customers will enjoy the convenience of making EFT payments, especially when part of a recurring payments plan. The customer only has to provide their bank account information once. Plus, future payments can be fully automated. 

4. Eliminate Manual Processing 

Besides the dreaded process of chasing payments, each time businesses send and receive a cheque, the accounting team must deposit it and then reconcile the cheque with the accounting software. This takes time and costs money. With automatic EFT payments, transactions are scheduled in advance and automated to relieve these burdens. Using VoPAY, businesses have the ability to integrate our payment processing API with their ERP and accounting system, so transactions are reconciled automatically. 

5. Prevent Human Error 

When using cash or cheques or traditional EFT, manual processing is required which has a higher risk of error. There’s a risk of human error for counting, risk of fraudulent bills and extra expense and effort for an employee to manage the money or cheque from transaction to processing, to in-person deposit at the bank. VoPay’s EFT payments have less chance of human error. 

6. High-Level Security

EFT payments are sent from one bank account to another and are sitting at bank-level security. By moving money electronically businesses reduce the risk of paper cheques being lost or stolen and reduce the risks associated with cheque fraud and forgery. Our advanced technology allows clients to efficiently verify their customer’s financial accounts and transaction history, and leverage advanced data analytics to assess risk, income, fraud, and more. 

7. Improve Cash Flow

Having full control over payables and receivables helps businesses with reliable predictable cash flow—making planning and forecasting more efficient. Businesses have the ability to organize payments and receivables at planned times throughout the month. 

8. Reporting and Notifications

One of the most convenient benefits of using an EFT payment system is the ability to receive notifications regarding payments sent, received or rejected instantly. Businesses can also use advanced reporting capabilities to reconcile payments with ease.  

9. Scale Faster 

Saving costs associated with manual processing and operating expenses can have a big impact on the bottom line for a growing business. Automation and payment systems are key to scalable growth. 

10. Speedy Access to Funds

Funds are usually transferred in as little as 24 hours. Most traditional credit card funding options take longer than one day. 

It’s clear that the one place businesses don’t want to be—is left behind. EFT payments are the payment system of the future. In 2021, customers are clear they want ease-of-use, automation and security. Partner with VoPay to leverage an easy-to-implement solution to debit or credit Canadian bank accounts electronically. And best of all this solution mutually benefits customers and businesses. 

For more information about VoPay’s EFT processing solutions, contact a payment specialist today! 

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Online PaymentsPayment Platform

Lenders ‘New Normal’; The shift to digital payments

lender payments2

Digital payments were considered a luxury in many markets before 2020, but that changed as the COVID-19 pandemic accelerated slow-moving trends away from cash and cheques and towards reliance on digital payments and real-time payments.

Countries with robust digital payment infrastructure coped better than those without when it came to dealing with the economic impact of the pandemic. Digital payments have enabled both governments and businesses, working with their financial institutions and service providers, to accelerate the much needed—faster movement of money. 

The accelerated adoption of digital payments and solutions, particularly in markets like Canada, indicates that these kinds of unpredictable market events can alter cash and cheque trends even in markets with strong economies. 

Since the beginning of the COVID-19 pandemic, due to a number of economic factors such as distribution in the global supply chain and reduced business activities, we have noticed more people being financially impacted. More Canadians are requiring additional funds like personal loans or financial assistance. 

However, lockdown restrictions and business closures have reduced consumer access to lenders and financial institution’s branches.  

Now, this is time for lenders and borrowers to work together to adapt to the new environment and take advantage of alternative ways to interact with one another. 

Inefficiencies in Traditional Payments for Lenders

Traditional payments, such as cheques, impact a business negatively as a whole as we described in our previous blog post.

Alternative to traditional cheques is Electronic funds transfer known as EFT, which moves money from one account to another. This payment method is most used by lenders but has its own challenges when processed by major Canadian banks and financial service providers. 

1- Manual Processing and Labour Intensive

EFT payment services that are available through banks and credit unions are offered via an online banking service or through a file processing system. In both methods, the client needs to manually submit the transaction and it takes 3 to 5 business days to be cleared. Then the client must ensure that the transaction status is updated accordingly to reflect correctly on their book. This is challenging for lenders with hundreds of transactions; combined with this process having a high risk of human error. It becomes more complicated when the lender needs to collect installment payments and then repeat this process weekly, biweekly or monthly.

2- Lack of Visibility and Transparency

Similar to cheques, if a lender accepts and sends payments using EFT they are not able to verify any information about the payer bank account, ownership or availability of funds. They are not able to predict if the payment is successful and it can take up to 5 business days to have final confirmation.

More importantly, the inability to connect existing banking systems to the lender’s software or platform they use to manage their loans, will result in manual reconciliation and updating the status of each borrower’s account. This can result in costly financial errors.

How Lenders can Benefit from Digital Payments

Considering the above challenges, choosing an alternative digital payment platform is the best approach for lenders. It can assist with automating the payment processing from initiation to reconciliation and enables full visibility into each transaction. Going digital gives lenders more control and flexibility to streamline the payment processing and focus on their core service offering—talk about rapid scaling. What better way to grow your business than to have a solution that improves its value when customers are added?

Moreover, data-driven payment solutions can add even more value to lenders by offering simplified onboarding and collecting account information. From customer onboarding to payment processing, digitization of the lending processes brings a number of powerful benefits for lenders and consumers, including better decisions, improved customer experience, and significant cost savings. Offering more simplified ways to pay, can make or break the customer experience.

When selecting a digital payment solution it is important to consider how it can integrate with lenders existing software. An API-driven solution that can simply integrate into a business’ platform enabling a fully autonomous approach. 

Choosing EFTs through a provider like VoPay means simplification. It means seamlessly facilitating payment processing by connecting to North America’s banking system. And truly simplifying the automated collection and disbursement of funds through a single platform. 

Choosing a Right Partner is the Key to Future Success

Never an easy task. With a provider like VoPay, lenders are empowered to offer efficient and cost-effective real-time funding options, while reducing NSFs and returns during payment withdrawals through next-generation EFT. For example, a lender can simplify the issuance of the loans and disburse them to customers automatically once a loan is approved and also automate the collection and recurring payments.

One of our standout performers for lenders is iQ11 EFT. By utilizing Open Banking technology Intelligent EFT / ACH (iQ11) adds a layer of data intelligence to online bank account transactions to verify them instantly and process them at a much lower transaction fee. iQ11 Solution: Can reduce NSF and return transaction rates by verifying the balance prior to the loan transaction initiation. 

VoPay’s payment services can be used out of the box with no development resources or it can be fully integrated into existing workflows using our developer-friendly API. VoPay is accredited by the Canadian Lenders Association and received the award for Fintech of the Year 2021 for our contribution to digitizing lenders across Canada.

Whichever way you decide to go—the direction is undoubtedly digital. So, whether you’re plowing ahead and going fully autonomous or pivoting towards digital payments, the time to do it is now. 

Contact us today to learn more about making the switch to digital.

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Online PaymentsPayment Platform

Integrated Payment Partnerships – The Key Benefits for ISVs

ISV Payment solutions (2)

As part of our blog series on ISV partnerships, today we’re taking a closer look at the key benefits of integrated payment partnerships.

The Future of Payments Is Integrated. The payments landscape does not stand still, and as such merchants will always require turnkey solutions that allow them to keep up with the shifting needs of their customers. For developers who have the foresight to identify these behavioural shifts and the technological expertise to capitalize on them, integrated payments present an attractive proposition.

What Are Integrated Payments?

While digital payments have been around for decades, the industry as a whole has undergone a massive transformation over the past 12 months as the shift to online payments has become the preferred method of choice when making transactions.

In order to keep up with this significant shift from cash towards digital transactions, as a SaaS (Software as a Service) or ISV (Independent Software Vendor), it is smart to partner with an experienced provider that can make this transition within the payment processing world easier, help you future proof your business as well as stay ahead of your competition. 

This is where integrated payments come in, which are changing the landscape of digital payments and are proving to be beneficial for both ISVs and their customers. Integrated payments refer to payment processing systems embedded within a specific software application. This feature allows end-users to make purchases within the software solution itself, rather than exiting the platform to complete their sale through a third-party processing company.

What Are the Benefits of Integrated Payments?

As an ISV vendor, creating a software solution that can also process payments is a gamechanger for you, your merchants, and their customers. Enable your merchants to process real-time payments, reconcile, and automate recurring payments directly within your software solution by adding a single API payment integration — without the need to overhaul an entire IT department. 

Let’s take a look at several key benefits that make integrated technology well worth your consideration:

How Integrated Payments Benefit End Users

Superior User Experience

With an integrated payment processing functionality, the end-user would be able to checkout, make payments, and complete the process all on one page. On the other hand, if the payment system was not embedded, the customer would be redirected to another 3rd party landing page (such as PayPal) before being redirected once again back to the merchant’s page. This is a broken, irritating and time-consuming user experience that results in fewer conversions and potential loss of business. 

Enhanced Security

Furthermore, every time an ISV merchant directs a user away from their secure site and toward a third-party processor, they jeopardize their customer’s sensitive information. 

Encryption, tokenization and other security approaches have helped ease customer and merchant fears around using and accepting digital payments. VoPay’s security features ensure the protection of personal data through the use of encrypted tokenization.

The Benefits of Integrated Payment solutions for ISV, Merchant and End Users

How Integrated Payments Benefit Merchants

Time, Speed and Efficiency

Integrated payments solutions relieve the burden of manual accounting for merchants and reduce human error, as payment records are entered automatically into the software.

Usually, merchants are so focused on receiving payments they hardly think about the time spent on reconciling invoices, recording transactions into accounting software, and balancing financial ledgers.

Integrated payments solutions can also help merchants get paid faster and avoid leaving payments unprocessed months after the transaction was made. Considering that 9 out of 10 businesses fail due to poor cash flow, integrated payments solutions can help merchants ensure they’ll be around next year.

How Integrated Payments Benefit ISVs

Generate Revenue

By adding a payment processing API integration like VoPays to their software, ISVs can increase partnership opportunities and boost business revenue through revenue-sharing programmes. ISVs have the potential to earn a percentage of the revenue generated through each transaction fee that would have otherwise been paid to third-party processors to complete a sale.

Recurring revenue streams can be created through one of three common partner models:

  1. Referral Program
    For this model, the software vendor simply refers new leads to their payment partner, who is responsible for all sales and support functions. As a result, this model usually provides the smallest revenue share amongst the three models.
  2. Agent Program
    In this model, the software vendor is usually responsible for the sales and onboarding process, while the payment processor’s role is limited to training, activation, and customer support.
  3. Independent Sales Organization (ISO) Program
    With this model, the software vendor has the most control over the user experience and can maximize revenue generation as all sales and support functions are kept in-house.

VoPay’s Solution for Your Business

As discussed, if you are a SaaS or Integrated Software Vendor, you need tailored solutions that benefit both your business and your customers. We know that one size does not fit all when it comes to payment solutions.

One of the most important decisions a software provider will make is how much control they want to have over the user experience. With VoPay you can choose between a web-based payment portal or a fully integrated API solution that provides complete control over the user payment experience.

With one seamless API integration, you can connect your ERP (enterprise resource planning), CRM (customer relationship management), web services, applications, or other legacy order entry systems to our sophisticated and user-friendly payment gateway. VoPay’s complete set of APIs allows you to securely integrate a wide range of direct bank payment processing as well as bank account verification capabilities, payment data tokenization, account balance visibility and real-time funding.

Conclusion

In conclusion, integrated payments can improve revenue through profit-sharing and upfront incentives and maximize conversion rates. Clients can benefit from low-cost rates on payment processing, tokenized security, full-transaction lifecycle reporting and seamless onboarding. WIN-WIN!

Regardless of the revenue model, it’s helpful to work with a payment partner that provides a dedicated team of sales specialists who are: experts in your industry, willing to learn your software, and have an understanding of your clients’ needs.

See our current partners and get in touch if you would like to discuss becoming an official VoPay partner.

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Online Payments

How Integrated Payments Help ISVs Grow Revenue

integrated payments

In today’s growing technology landscape, particularly when it comes to digital and integrated payments, it’s no secret that consumers want innovation and seamless payment solutions when it comes to making transactions.

For independent software vendors (ISVs), it can be daunting, and potentially challenging, to integrate new software to meet the needs of their clientele without losing business or causing mishaps in daily transactions.

With payment trends evolving at a rapid pace, consumers are being conditioned for instant gratification when buying goods and services. The ability to offer best-in-class integrated payments as a feature of a software solution is key to future-proofing and scaling an ISV’s business. Seamless integration of payment automation and reconciliation and real-time data analytics adds value to any ISV business proposition.

The growth of Digital Payments 

A report from GrandView Research shows that global digital payments are expected to reach roughly US$236 billion by 2028, growing at a compound annual growth rate of 19.4 percent between 2021 and 2028. According to the report, this growth can be tied to an increase in non-cash transactions and advancements made in the fintech sector.  Similarly, a report from Mordor Intelligence states other factors contributing to this growth include integrated, and seamless, user experiences.

Case in point, integrated payments are broadening the scope of digital payments as consumers and businesses are increasingly demanding for more sophisticated processing solutions. 

In tandem with the growth of digital payments is the rise in ISV companies. In 2008, there were only roughly 10,000 SaaS companies, which grew to 100,000 in 2018. By 2028, experts are predicting that number will reach 1 million. As such, it’s important  for ISVs to stand out as this growth continues, and implement payment processing solutions that are distinct from the rest.

Why ISVs are shifting to Digital Payments

Staying ahead of the curve — particularly when it comes to operating as an ISV — is important in today’s world of payment solutions.

According to a research report, 87 percent of ISVs surveyed indicated they believe the number of payment options they provide directly impact the amount of business they do, while 88 percent said upgrading their payment options is a priority. Meanwhile, 86 percent of the respondents claim their customers are turning to them to lead in providing new payment methods.

Although digital solutions have been in place for decades, the COVID-19 pandemic has had a drastic impact on the payments industry. For example, an EY report states that the virus has led to an acceleration of as much as 10 years’ worth of growth in four months with no signs of slowing down. This means that the ability to receive and make payments online is more important than ever, with fast and cost-effective open banking account payments surging in popularity all around the world. 

This is where integrated payment solutions come into play.

What are Integrated Payments? 

An integrated payment processing solution is essentially a system that is installed in a specific software application where customers can make payments directly through the software instead of having to move through a third-party system to finish the transaction.

Through an integrated payment processing system, ISV customers can generate invoices and accept online bank payments and pay bills directly through the application.

Payment processing solutions are constantly evolving to keep up with the transforming landscape of business and consumer needs. Not only are integrated payment solutions creating a more seamless user experience, they also help generate business revenue.

Benefits of Integrated Payments

Integrated payment solutions have a wide range of benefits for ISVs and for their customers. Here are a few benefits associated with integrated payment solutions:

Saves time and money

Ironically, managing finances can be costly and time consuming, but integrated payments make so banking information doesn’t have to be entered every time a payment is processed. This information is automatically entered into the software, which saves time in the future so ISVs can focus on their customers.

Adds competitive advantage 

Adding an option such as an integrated payment solution gives ISVs a leg up in the payments sector — especially when payment processing solutions are integral to business operations.

Bank payment processing for ISVs is beneficial for a range of reasons, including: adding value to an ISVs products; reducing how much work clients have to do to manage their businesses, and; building ISVs expertise in integrated payment solutions to be able to provide the best customer support possible.

Offers seamless and secure payment options

While digital payment options have their advantages, there’s always the lingering fear of data security breaches. 

With integrated payment solutions, ISVs have the opportunity to provide technology that is regulatory compliant and tokenized without handling sensitive payment information. At VoPay, tokenization is a solution that we use to ensure consumers remain protected while enjoying this increased convenience.

Choosing the right payment partner to grow revenue

ISVs don’t have to do the work to become payment processors themselves to support these fundamental solutions for clients. Instead, it’s better — and more efficient — to partner with an integrated payment solutions provider like VoPay.

This partnership gives ISVs access to a brand-new revenue stream, called revenue sharing. Revenue share agreements means any customers an ISV refers to their partner for merchant processing gives them a percentage of any and all revenue generated. 

ISVs looking for a payment partner to take on the heavy lifting of processing transactions, regulatory compliance and account onboarding will benefit from API-first integration. A fully integrated system in application programming interface (API) advantageously allows the entire system to reside within a merchant’s infrastructure. A partner, such as VoPay — who is dedicated to clean documentation and comprehensive developer tools — will ensure smoother integration and lighter workloads for ISVs.

VoPay’s Solution

VoPay partners with hundreds of ISV and SaaS providers across Canada enabling direct bank payments through a single API integration. Streamline sending, requesting and reconciling payments with data-rich, safe and efficient tokenization technology. With a payment processing partner like VoPay, ISVs can anticipate the future needs of their clients with frictionless integration built directly into their software platform.

Through the VoPay API layer, you can access a different range of payment services, including:

  • EFT / ACH: Seamlessly facilitate bank payment processing by connecting to North America’s banking system.

If you’re an ISV looking to take your payment solutions to the next level, we encourage you to get in touch with one of VoPay’s product specialists who will work with you to enable the best payment solution, increase your revenue and beat your competition.

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FintechPayment Platform

Top 8 Payment Methods By The Numbers

Top 8 Payment Methods

We looked at the 8 most common payment methods used in Canada. Cheque and EFT payments values clearly eclipse all other payment methods by a significant margin. These numbers are mainly driven by account to account payments by businesses and present a significant opportunity for modernization. It’s important to keep in mind that these Payment Canada numbers are from 2018 so we can expect cheque payment value to continue to decrease and shift to other payment methods.

VoPay’s next-generation EFT payments technology service will help support businesses in finding new efficiencies including improved cash flow through faster funding times, bank account verification for added security and account balance visibility to decrease return transactions. Learn more here about our enhanced EFT payment services and everything else we have to offer to make your business run better.

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Online PaymentsPayment Platform

What Are ACH Payments and How Do They Work?

ACH Payments

An ACH payment is a bank term that stands for the Automated Clearing House. ACH payments are electronic transfer systems that move money between bank accounts in the U.S. A few examples of ACH payments include direct deposits, payroll, online bill payments, tax refunds, and vendor payments for merchants and small businesses. 

Automated Clearing House Network

Since 1974, the Automated Clearing House (ACH) Network has been run by the National Automated Clearing House Association (also known as NACHA). In other words, they are responsible for the majority of all payments in America. 

The ACH Network that is responsible for the payments is one of the biggest payment networks in the U.S. In 2018, nearly 23 billion transactions were processed valued at more than $51 trillion. According to one source, the number of transactions in 2017 was equal to approximately 66 transactions and more than $140,000 for every living American. The ACH payment network also represents more than 10,000 financial institutions, not to mention consumers and businesses. 

How does ACH payment processing work

ACH payments are transfers of money between two bank accounts and can be broken up into ACH debit and ACH credit. Payments are either transferred (or pushed) from your account or received (or pulled) by another. 

ACH Debit: Pulling money

Pretend for a moment that you’re a business owner with a utility bill to pay. You had previously provided your account and bank routing number to the utility company and approved direct bill payments. The company sets up an ACH debit to pull money from your account. 

ACH Credit: Pushing money

Assuming that you are still that same owner with a utility bill, you can also initiate the payment. You can create an ACH credit to withdraw or push funds from your account to the utility company.  

How ACH payment processing works

In order to receive or send ACH payments, one has to connect their bank account and routing number to enable automatic payments online. Once that’s happened, here’s how the processing works: 

  1. Initiate transfer: Sending money triggers an initial transfer request to the central clearinghouse.
  2. Sorting: The ACH Network sorts the payment requests and sends it to a receiving bank.
  3. Processing: This bank processes the transfer to either an ACH credit or debit. If the payment is approved and was an ACH credit that “pushed” funds, the transfer is complete. 
  4. Pulling funds: If “pulling” funds, or an ACH debit, then the funds must move back through the clearinghouse before arriving in the other account. 

How long does an ACH transfer take

The ACH Network processing time is getting faster and easier with every innovation but can still take up to 3-5 business days. This is because of the multi-step process and various bank touchpoints that each transaction must go through to be completed. However, recent changes to NACHA’s operating rules will make transfers faster than ever. As of September 2020, most, if not all, ACH transfers will be completed by the same day. 

How to make ACH payments

VoPay connects directly to both ACH payments in the U.S. and EFT payments in Canada, allowing users to accept, send, and bulk transfer payments online. Our secure technology allows users to accept and manage ACH payments directly from any bank account. 

ACH payments in Canada

Digital payments in the U.S. are called ACH payments. In Canada, however, they are called EFT payments, or electronic transfer funds. The difference is that ACH payments go through the Automated Clearing House Network. For more information, read our in-depth blog post called Everything You Need to Know about EFT Banking

Learn more about VoPay and ACH payments.

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Payment Platform

‘Tis the season to pay: Avoiding holiday debt

Holiday Debt

As Scrooge might say, ‘tis the season to pay—and for exorbitant holiday debt. As it is, consumer debt is at an all-time high exceeding $4 trillion and it’s no wonder it’s worse this holiday. Let’s take a look at the stats:

Though not surprising or anything new, 70% of adults are stressed about this year’s holidays, mostly because of money, payments, and debt. Yet, despite so much consumer debt, people are still willing to continue to charge their credit cards for holiday gifts. This is one of the most expensive ways to borrow money, however, and can lead to more debt very quickly.

Holiday debt and credit card spending

For example, according to an Experion survey on holiday spending for 2019, consumers will spend 75% more on gifts this year than last. In 2018, they planned on spending $949 for holiday gifts and this year, it’s more like $1,649. But according to Ted Rossman, from CreditCards.com, if shoppers spend $1,500 and only made their minimum payments, it would take over eight years to pay off—and the accumulated interest would be $1,217 at our current interest rates.

That is a huge price to pay in interest alone. At that point, we have to ask: is it worth it? Is there a better, more responsible way to pay for holiday gifts for our loved ones? 

Spending your hard-earned savings or succumbing to debt 

According to a recent NYTimes’ article, Merkel Landis from the Carlisle Bank of Pennsylvania came up with the idea of the Christmas Club savings account back in the 1920s. This became popular before middle-class consumers had easy access to credit cards (and the debt that often comes with them). The whole point was to save money (and perhaps even accumulate interest) leading up to Christmas shopping. What a concept: spend what you have. 

However (and to be fair), even the most debt-free savvy spenders among us have since replaced their holiday savings accounts with various types of credit cards. This could be partly due to online shopping. For example, 53% of all holiday shopping this year is expected to be done digitally. This kind of shopping really only leaves consumers with credit cards as a way to pay. 

As well, some of these credit cards earn people rewards, which could be another reason for the shift away from savings toward credit. The more they buy, the more they earn. But, as NYTimes so aptly puts it: “buying more stuff than you typically do increases your risk of credit card debt.” Consumers are thus forced to succumb to record-high-interest rates, everlasting credit card debt, and spending beyond their means. 

Save up and spend online this holiday—without the debt

Thankfully, the digitization of payments is changing all of that

Consumers (and merchants, for that matter) finally have another online payment option. VoPay, as an example, is a financial technology (fintech) company that digitizes direct payments. Consumers can once again tap into their hard-earned “Christmas Club” savings accounts to pay for their holiday shopping online. They can rid themselves of crippling credit card debt and the stress that comes with the holidays but isn’t necessary anymore. They can once again spend the money that they have—and enter 2020 debt-free with a little bit of planning and savings.

Learn more about VoPay and how digital payments work.

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