An Introduction to Online Payment Integrations for Governments

August 3, 2022

For many of us, paying online is second nature. It allows us to shop for just about anything, from just about anywhere, and when set up right, takes just seconds of our time. It’s a part of our everyday consumer life, and governments are following suit.

Rather than in-person payments and cheques, governments are opting for online payment integrations that not only provide a frictionless payment experience for customers, but a way for staff to simplify payment processing, and improve reporting and reconciliation. Think of it as a virtual terminal that lets you turn your PC into a POS device. All you need is an internet connection.

These integrations with payment gateways act as an always-on virtual equivalent of a physical credit and debit card reader, and transfer data between the point of entry, payment processor, and bank.

Custom vs. Pre-Configured Payment Gateways

When looking to offer online payments, there are two ways to go about it: build a custom payment gateway for your system, or, if offered by your software vendor, take advantage of a pre-configured integration that’s already been built. The latter being preferable from a cost and efficiency standpoint.

Here’s how they compare:

Custom Payment Integrations Pre-Configured Payment Integrations
Expensive processing fees - typically 4% per transaction Negotiable transaction fees
Long, costly integration, often $10,000+ Minimal configuration required to go live, low to no additional cost, faster time to value
Often only credit card payments accepted Multiple payment methods accepted including credit cards, debit cards, and ACH/EFT payments
Multiple points of contact for support Single point of contact for support
New features and functionality come at additional costs No additional cost for new features
Manual refunds and voids initiated in payment processor’s portal Integrated refunds and voids
Siloed reporting Centralized reporting
PCI compliance may be your responsibility PCI compliance is the vendors responsibility

Ultimately, going from program to program and interface to interface to manage payments isn’t efficient. Or cost effective. If available, go for a pre-configured payments solution to save yourself the hassle and extra costs.

Pricing Models

Another consideration when scoping out a payments integration is how you prefer to handle processing fee payments. In the payments industry, there are primarily two options: either the merchant pays the processing fee, or the cardholder pays the processing fee. 

With the ‘merchant pays the fee’ pricing model, the merchant pays the processing fee so that it’s not passed on to the cardholder. The processing fees are deducted from the total transaction amount. So, for example, if a building permit costs $100, and the processing fees are 3%, the cardholder pays the full amount, the merchant gets $97, and the processor gets $3. 

Alternatively, the ‘cardholder pays the fee’ pricing model requires that the cardholder pays the processing fee. In this case, processing fees are added to the total transaction amount. So, rather than paying $100 for the building permit, the cardholder pays $103 (the permit fee + a $3 service fee), the merchant keeps $100, and the processor gets $3.

Billing Models

Typically, there are two billing options offered by payment processors: gross billing or net billing.

With gross billing, the merchant receives the full transaction amount (the base amount plus the processing fees) deposited daily, and is then invoiced for processing fees each month. 

Conversely, with net billing, when a payment is processed, the fees are immediately deducted by the processor, and the merchant receives the remaining balance. The merchant therefore pays the processing fees with each transaction, and owes nothing at the end of the month.

PCI DSS Compliance

Any business that stores, processes, or transmits cardholder data needs to comply with standard industry regulations for processing payments known as PCI DSS (Payment Card Industry Data Security Standard).

In simple terms, PCI DSS consist of technical and operational requirements set by the PCI Security Standards Council (PCI SSC) to protect sensitive financial data and prevent fraud. The standards must be satisfied to take credit card payments.

In most instances, your payment processor should already comply with PCI DSS since they process the data on your behalf, but it’s important to ask the right questions first to make sure your customers’ data will be safe. For questions to ask, check out this list.

Clariti Payments

Whether you’re an existing Clariti system user, or in the market for a new, easy-to-use
permitting and licensing solution, Clariti Payments offers the most flexible and cost-efficient option for Clariti users to manage payments - and it can be up and running in minutes.

From day one, you can start accepting payments via multiple methods you define, void and refund money owed, and accurately report on department revenue - all within Clariti. 

Offering PCI-compliant payment processing with Paysafe, embedded refunding and voiding functionality, and centralized reporting, every payment functionality you need will be set up and ready to go from the start. Plus, you can save thousands (upwards of $10,000) on implementation costs since there’s minimal configuration required, and likely save on processing fees thanks to Clariti’s highly competitive transaction fees. Better yet, as with Clariti’s other solutions, you’ll have a single point of contact for support, so you can get answers quickly when you need them.

Most importantly, since payments are an integral part of the permitting process, the benefit of having one go-to team for system support cannot be overstated. If something goes wrong, the same team that knows the ins and outs of your community portal, fees structure, and back office can also help with payments. They’ll be your go-to for support with all of the moving parts of your system.

In sum, with Clariti Payments, you’ll get access to leading support, and all of the payment features and functionality you need at no additional cost, including:

  • Embedded refunding and voiding back to the original payment method.
  • Embedded ‘virtual terminal’ within your Community Portal that makes it easy for customers to make payments.
  • Multiple payment options including Credit Card, Debit Card, and Direct Debit  (ACH for USD/EFT for CAD).
  • Centralized reporting that gives you visibility into the details and current status of every transaction that’s been processed.
  • A core report set that covers transaction settlement, refunds, chargebacks, and more.

Interested to learn more? Check out this 4 minute video walkthrough of Clariti Payments, or reach out to our team!

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