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CRM Now Shows Companies the Money

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Most people associate payment processing with back-office work handled by enterprise resource planning (ERP) systems and billing departments. But today, the tie-in to CRM systems is significant, particularly as payment processing becomes more of an integral part of the e-commerce and sales functions. It’s no surprise, then, that technology providers are integrating payments into CRM systems to offer improved scalability and functionality and shortening the time between initial product/service discovery and sales, delivery, and beyond.

“E-commerce engines are starting to merge into CRM,” observes Clint Oram, cofounder and chief strategy officer of SugarCRM. However, rather than integrating directly into a CRM system, payments are usually tied in at the configure, price, quote (CPQ) level via an e-commerce platform. “What has changed is the desire to more thoroughly integrate e-commerce systems into CRM systems.”

That desire is understandable. For companies that sell products and services, integrating payments simplifies the purchasing process, says Neal Hoffman, chief marketing officer of PaymentCloud.

Additionally, integrating payments within CRM consolidates various financial functions into a single platform, enabling companies to streamline processes related to invoicing, payment tracking, and identity verification, adds Austin Talley, founder and CEO of Everyware, an integrated payment and customer engagement platform provider. “This consolidation enhances operational efficiency and reduces the complexity of managing multiple systems for payment-related tasks. By incorporating secure payment processing capabilities, businesses can ensure the safety of transactions, whether they involve traditional card payments or newer methods like buy-now-pay-later (BNPL) options.”

The integration also eliminates the need for manual data entry and endless switching between systems, reducing human error and freeing up valuable employee time. As a result, processes and tasks that once demanded excessive attention now flow through the pipeline with increased speed and precision, allowing employees to focus on other tasks, experts agree.

“You want to eliminate friction as much as possible when people pay,” Hoffman says. “You want to eliminate friction by having as few clicks as possible for payment. If a customer is already in the CRM platform, you want to make it easy for him to pay.”

And since CRM systems already contain information regarding the full life cycle of deals and critical customer information like name, address, and previous purchase history, it’s only natural to have payments within that same ecosystem, Hoffman adds. “It should be very easy to submit an invoice or to send a text message requesting payment so the person could just pay with their phone with Apple Pay or something similar. You can just set up a secure payment page, which ties the payment all back into the CRM.”

In addition to integrating payments and CRM, such an ecosystem typically includes integrations with popular business accounting software like Sage, Intuit QuickBooks, or FreshBooks, Hoffman says.

There are several other efficiencies gained by combining the two business processes, according to Hoffman, who points to the following:

  • Proper attribution: Via APIs, users can tie payment history (received, open, pending, failed, etc.) with contact records. This might influence future marketing and sales outreach, because companies might not want to sell to certain customers with big outstanding bills.
  • Automated follow-up: Different sequencing can be initiated via the CRM for payment reminders, payment confirmations, recurring billing reminders, failed payments, and card expiration issues. The accounting department doesn’t need to go to separate systems to generate payment reminders, which can be blended with email and text message drip campaigns (i.e., for related products or services to promote a subscription service rather than one-time purchases).
  • Fewer chargebacks/failed attempts: When there is constant communication between the business and the customer via CRM workflows, there is less probability of a failed transaction attempt due to incorrect payment card information, address mismatch, expired card, etc. Also, if customers have issues with the product and don’t want to be charged, they will tell you during this communication stage rather than filing a chargeback/dispute after the fact.
  • Improved workflows: With payments and CRM seamlessly integrated, processing moves seamlessly from one system to another rather than waiting for a human to re-enter information or intervene at each incremental step. Speed is an essential element in today’s e-commerce environment.

There is a large amount of additional work and processing time by using different systems for payments and CRM, Hoffman adds. “It’s easier to do everything within the CRM system, it’s just cleaner.”

“Integrating payments into CRM systems brings about transformative benefits,” Talley adds. “Replacing manual credit card transactions with automated, secure mobile payments eliminates potential errors and enhances transaction security. Similarly, in healthcare, leveraging text messaging for appointment follow-ups and payment reminders simplifies communication with patients while ensuring timely payments.”

Whereas integrating payments and CRM might have been complicated a few years ago, the process is fairly straightforward today thanks to the various payment gateways available, including Authorize.net (owned by Visa), NMI, Cybersource, Fluidpay, and USAepay, according to Hoffman. “Depending on the available gateway options already configured with the chosen CRM, we simply deploy the [value-added reseller] sheet on that gateway and connect via the CRM’s [user interface].”

The payment gateways are the linchpins for sending and receiving payments. Many CRM systems work with multiple gateways. Determining which gateway(s) to use should be based on a variety of factors, including ease of use, ease of connectivity, and the APIs and other technical capabilities of the CRM system itself, according to Hoffman. The more advanced the CRM system, the more gateways with which it can work and the more seamless the integration.

One of the popular systems for combining payments with CRM is Shopify, with available gateway options in the payments section of the back end, Hoffman adds. “You can select Authorize.net [or another payments gateway] from the dropdown. We would then plug in the unique account details, and, voila, it would connect and communicate with the merchant account to take payment and deposit into the merchant bank account.”

It makes no sense for companies to attempt to build their own gateways, Hoffman adds. Not only are there excellent ones already available, but building a gateway is very resource- and labor-intensive, technically complex, and potentially expensive.

However, all payment gateways don’t offer the same ease of integration with CRM platforms, Hoffman cautions. “If you were to take payment from the outside, like through a Chase Paymentech or another merchant services company that has its own gateway, then run the information through a random AI, it will need to feedback to your CRM system and may not bridge the connection. You want everything to be as seamless as possible. You don’t want to have to go outside to update for things like changes in accounting laws, update that a payment was received, the amount was captured correctly, or anything else. So it’s crucial that it be done inside the same system.”

For integration to be smooth, the CRM or e-commerce system needs to have open APIs with the most popular gateways, Hoffman says. A CRM or e-commerce system doesn’t need to integrate with every gateway that emerges, just those that are most popular with their current and prospective customers.

SugarCRM customers, for example, have used Authorize.net for more than a decade. More recent payments integrations have involved Stripe, which has become very popular in just the past few years. With customer demand for payments integration increasing, SugarCRM has increased the number of e-commerce systems with which the company’s platform integrates, Liferay as a recent example.

However, the trend is to connect a payment gateway with an e-commerce system, such as Shopify, first, then integrate the e-commerce system with a CRM system, Oram says.

Building payments into an e-commerce engine using a payment gateway is preferable to trying to integrate payments directly into a CRM system, Oram adds. “E-commerce systems are designed to store things like credit card information. If you’re trying to build all that directly into a CRM system, you can make mistakes. You could store credit card information directly into the CRM, which you should never do. In fact, it’s in our terms of service that you won’t store credit card information within your SugarCRM system.”

Adaptability is also a crucial element in any system integration.

“Businesses are constantly evolving to keep up with consumer demand and payment preferences, so having an application that can change quickly according to businesses’ needs and requirements can help them adapt, manage, and process customer payments directly from within the CRM system, rather than having to use a third-party payment processing platform,” says Luis Feliz, support manager of IRIS CRM.

“What you’re finding across the board, certainly in the case of manufacturers, wholesalers, and distributors, they’re using their e-commerce sites as interface points for customers and vendors to search the product catalogs and to place orders,” Oram says.

The e-commerce sites then integrate that self-service capability into SugarCRM or other CRM platforms.

Sellers can then stage a shopping cart and an e-commerce system for a customer and then process payments and purchasing at the point of decision with all the relevant data going back into the CRM system, Oram explains, adding that such integration of payments, either directly through a CRM system or through an e-commerce system that is integrated with a CRM system, is necessary to compete in e-commerce today.

CHOOSE THE RIGHT PROCESSOR

And to successfully integrate CRM and payments, it is necessary to choose the right processor for your specific business, Hoffman says. Companies selling cannabis, guns, or adult products, for example, might be shut down by some processors, so it could be beneficial to have several processors to handle those items.

Other considerations in choosing the right processor include overall pricing for using the service, per-transaction fees, minimum and maximum purchase amounts, and compatibility with e-commerce and CRM platforms already in place, according to Feliz. “Additionally, ensure that the system can scale and change as your business evolves, as it is an important asset that can play a key role in the growth of your business.”

Hoffman adds that companies should have more than a single processor for load balancing considerations. “You’re going to want to have redundancy accounts, maybe even three of them, in case one shuts down. You can tell the gateway how to split volume between processors.”

Similarly, some processors handle cross-border transactions but might have higher fees than those that handle only domestic transactions, so the load balancing should take this into account when determining which processor handles which transactions.

“Some people mistakenly think this is done at the gateway level,” Hoffman adds. “The gateways have nothing to do with this. The gateways just move payments. The merchant processing account determines if the payment is approved, handles the underwriting, the risk, and everything else.”

Oram adds that payments providers also need to be able to handle exceptions such as failed payments, rejected cards, two-factor authentication, different payment types (e.g., credit and debit cards, Apple Pay, Venmo or Zelle, and emerging payments platforms), and other payments nuances. When Apple Pay, Google Pay, and similar payment options first launched, usage was sparse because there was little or no integration across merchant infrastructures, but most payment gateways have since closed that gap.

Security to protect both the buyer and seller is another critical consideration. Multiple-factor authentication is becoming increasingly important as payment fraud continues to increase. According to Help Net Security, 86 percent of all companies were hit with successful payment fraud in 2023. Two-thirds of companies expect payment fraud to rise further this year.

Scammers posing as trusted sources, creating false vendor accounts, and tricking targets into making transfers were among the most common types of fraud last year.

As companies seek to further streamline payments, bad actors will continue to seek loopholes through which they can steal information or make fraudulent purchases, so vigilance will always be key. Nothing is foolproof, of course, but making it harder for criminals to find and exploit weaknesses goes a long way, experts agree. 

Phillip Britt is a freelance writer based in the Chicago area. He can be reached at spenterprises1@comcast.net.

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