Payment Processing: Batch vs. Real Time

In today’s world of payment processing, some catalogers advocate processing credit card transactions using batch (where a large volume of transactions are forwarded for approval all at one time), while others use real-time processing (each transaction is authorized as it comes in).

As for yourself, you may want one or both of these processing services, depending on the nature of your business, the type of goods and services you offer, and the internal procedures you use to handle transaction cycles.

Using today’s sophisticated technologies, merchants can write complex, rules-based code that allows a customer transaction to flow from one part of the payment cycle through many paths until it’s completed. Hence, merchants now have more options in processing credit card transactions using batch, real time or a combination of both.

By answering the questions outlined below, you can determine which authorization solution creates efficient transactions and smooth operating procedures for your catalog operation; offers the best value in time and money; and helps strengthen customer relations.

Do you need more fraud-detection tools? More and more catalogers are switching from batch-based processing to real time because of increased fraud risks (which translate to losses) inherent to their businesses. These merchants want to know immediately if they have a valid transaction, so they can continue with the order process.

Catalogers recognize this as a relatively new need, since the advent of the Internet has made fraud more prevalent. Indeed, fraud is a continuing and growing problem for merchants, and you may determine that a real-time authorization system will mitigate your catalog’s fraud risk.

* Are exceptions eating away at your productivity? For some merchants, handling authorization “exceptions” has become more of the rule, partly because of increased fraud (see above). Instead of efficiently authorizing a transaction and processing the order, they invest too much time tracking down declined authorizations and jumping through hoops to discern if a transaction is valid after a customer already has hung up or left the Web site.