How to choose the right card payments flow for your business

The card and digital payments market size in South Africa was valued at $90.7 billion in 2021, and is expected to grow at a CAGR of more than 7% during the period of 2021-2035. Despite remaining a primarily cash-driven society, electronic payments are steadily shifting to the forefront.

According to research by GlobalData, the adoption of card-based payments can be attributed to the combined efforts of the country’s government and financial institutions, as well as the expansion of card payment acceptance among retailers. As of March 2023, the most common payment types in South Africa include debit cards (58%), online payment services like PayPal (49%), direct debit (31%) and credit cards (27%).

As more consumers engage with digital platforms across verticals – from e-commerce to subscription services, to services requiring digital wallets and accounts such as trading, investing, gaming and more – we’ve seen increased demand for specific requirements like recurring and headless payments, one-click checkout, guest checkout, and others. This expansion in the digital payments space has pushed online businesses to innovate and turn to payment gateways for a variety of payment flows that meet evolving consumer demands for seamless and secure payments experiences.

The payment flow – or the sequence of steps involved in processing payments – drives specific actions for the customer and can have an impact on payment success rates, conversion and more. Here, we’ll take a look at some of the factors enterprise businesses across sectors should keep top of mind when implementing a card flow from their payments processor, as well as the options Stitch offers. 

Understanding card payment processing channels

A card payment flow includes the steps needed to enable a business to accept card payments from customers. Typically, it’ll include authorisation, authentication, payment processing and settlement.

However, there are multiple variations of card flows, as well as channels businesses can use to accept card payments, depending on specific collections requirements. While most businesses are looking to drive conversion and increase retention with a more efficient and nearly invisible payment experience, providing the right options will ensure increased performance and fewer failed payments, no matter which channels your customers are using.

Here’s an overview of the most common card processing channels for digital and in-person transactions:

1. Online payment gateways Commonly used for e-commerce or wallet-based businesses, customers can make secure online payments through payment gateways integrated through a website or app.
2. Contactless digital wallet payments With the rise of mobile commerce, physical and online businesses or apps can leverage contactless payments via digital wallets like Apple Pay, Google Pay, Samsung Pay and so on. These allow customers to make in-person and online payments using their smartphones without having to take out a physical card or when performing in-app purchases.
3. Point of Sale (POS) terminals Traditional brick-and-mortar businesses often utilise POS terminals for in-person card payments, which is well-suited for the hospitality industry and physical retail stores. These might take the form of contactless payments (tap-to-pay) using a physical or virtual card, or third-party platforms leveraging QR codes.
4. Recurring billing Subscription-based businesses, such as software-as-a-service (SaaS) companies, collections businesses or streaming platforms, benefit highly from recurring billing card flows with automated, regular scheduled payments which are often headless. 
5. Payment links Clickable links or scannable codes that enable a customer to make a purchase or pay for a service via websites, social media platforms, apps, messaging tools and in-person are ideal in social or conversational scenarios, for invoices or for businesses that don’t have a website or app. 

Which online card flow is best suited for your business?

When accepting online card payments, there is no one-size-fits-all solution. There are a variety of different card processing flows you can choose from. These are highly dependent on the specific payment scenario(s), required as well as the expectations and needs of your customers.

At Stitch, we’ve designed a number of flows to support businesses with complex payment requirements and allow them to customise their payment experience. 

Retail, e-commerce and travel

For online shopping platforms and other types of e-commerce businesses, like those within the travel and hospitality industry, online credit or debit card payments remain the most common. Depending on whether your customers pay from logged in accounts, choose guest checkout or require subscription purchases, there are three primary card payment flows to consider.

1. Once-off payment without saving card details

A new customer can make a 3D-Secure authenticated payment and opt for their details not to be remembered in future sessions. Optimal for e-commerce platforms offering guest checkout, a customer would need to go through the same flow when returning for any future payments and re-enter their card details.

2. Once-off with card details saved

A new customer that may become a returning customer can make a 3D-Secure authenticated payment and opt to have their card details remembered in their browser, so they can pay in one click whenever they return, without re-entering their details.

Ideal for e-commerce businesses looking to offer a seamless and frictionless checkout experience, this flow reduces steps to payment for returning customers, optimising conversion + retention.  

3. Returning user flow with card details saved for subsequent payments

A returning customer that previously opted to save their card details can choose to pay using their previously entered card, without any manual input or extra steps. 

Wallet-based businesses

For wallet-based businesses, or those that require customers to deposit funds into a secure digital wallet or account, which they can then use to invest or trade and send or receive funds between banks and other wallets, a returning user flow is best suited to support frequent customer deposits.

1. Once-off with card details saved

A new customer can make a 3D-Secure authenticated payment and opt to have their card details remembered in their browser, so they can pay in one click whenever they return, without re-entering their details.

2. Returning user flow with card details saved for subsequent payments

A returning customer that previously ticked ‘remember me’ would be presented with their previously entered card details and can choose to pay with it without any manual input or extra steps. 

Collections and subscription-based businesses

A recurring card payment flow is best suited for collections and subscription-based businesses that require regular payments at scheduled intervals, or marketplace apps that require customers to be logged into an account with saved payment details in order to conduct a transaction. These include e-hailing and on-demand delivery apps, streaming platforms, insurance providers, lenders, utility companies, telcos and membership-based businesses like gyms, among others.

There are two main types of recurring flows that enable a merchant to choose to tokenise a card for subsequent payments. This can happen during onboarding without pulling a payment or with purchase, enabling headless or user-not-present payments using the card token in the future.

1. First-time users: tokenisation of card details without initial payment

This is best suited for merchants who need to store a customer’s card details during the onboarding process, without pulling a payment at the time of storing their details. This might be useful, for example, in ride-hailing apps or scan-to-pay apps, where a user needs to add a preferred payment method before they can use the product.

In this case, a card network token is returned to the merchant, enabling them to charge the card in the future without requiring additional input from the user.

2. Recurring payment flow

Once a card has been tokenised, merchants can make a payment request with that user token. The customer’s card is linked to this token and can be charged without the user being present. 

Choosing the right card payment provider

Here are a few things to consider when deciding which payment flows and provider is best suited for your business and your customers.

• Understand industry standards. Consider industry-standard payment methods for your segment, and what your competitors are offering to ensure you’re on par, and find opportunities to differentiate
• Access to multiple payment flows. Ensure your payment provider is able to offer multiple card flows to accommodate different payment needs and scenarios
• Use data and analytics. Analyse your payment data to understand your industry’s consumer habits and preferences
• Prioritise security and compliance. Ensure your payment processor or gateway meets industry-standard security and compliance requirements. Industries dealing with sensitive information, such as healthcare and finance, require stringent security measures and compliance with industry regulations like PCI DSS
• Consider your transaction volumes. The volume of transactions your business handles can impact the scalability and efficiency of different card flows. High-volume businesses need card flows that can handle large transaction loads seamlessly
• Optimised user experience. The card payments process should be smooth and intuitive. A complicated or lengthy payments processes can deter customers from completing transactions
• Integration with existing systems. Consider the compatibility of the chosen card provider with your existing software, accounting systems and customer databases. Seamless integration minimises disruptions to your operations
• Geographic reach. If your business operates internationally, consider a card flow that supports localised transactions and different currencies

Optimise conversion + boost retention with intuitive card flows Request a demo