Gone are the days of one-size-fits-all payments. Modern Fintech demands multi-dimensional products and the ability to differentiate at the lowest level in the payments process--to add their own secret sauce on top of what their processor already has and makes available to all their other clients. To provide true differentiation, one must be a part of the underlying infrastructure.

Differentiation at the infrastructure layer is the problem. Embedded processing is the solution. 

But what is it, and why should we care about it?

Payments, Specifically Issuing Processing and Money Movement are Not Easy

Connecting with the expanding share of payment providers can be challenging and requires specialized knowledge, expertise, and, equally important, time and bandwidth. The problem is nothing new. The concept of the payment switch, a single integration that connects a payment processor with all the payment networks, has been around for decades. Switches solve for the time and bandwidth problems. But to have the knowledge and experience necessary to connect with a switch and obtain certification within all the networks, to become a payment processor, is an exceptionally niche skill set to have; another challenge unto itself. 

To process any payment requires knowledge of the ecosystem, infrastructure, and technology. Processing card payments is a morass of regulations, risk, partnerships, and specialized systems. For a modern Fintech, it could take years to navigate and, even then, the end result will be a 1.0 processing system that has to be continuously maintained and monitored. 

Embedded Processing is King

The requirement for a Fintech to participate in a transaction is nothing new. The concept of what’s been called “Cooperative Auth” has been around since the turn of the century. But offerings were highly customized for individual clients and limited in the types of products they could support. 

Embedded Processing takes the concept of “Cooperative Auth” and expands it to meet the demands of modern Fintech. Via this technology, and without any specialized industry knowledge, a Fintech can essentially wrap payment functionality around their own systems. This allows them to:

  • Add their own rules and logic to both the authorization and funding of a transaction.
  • Provide card and payment access to any pool of value (crypto, loyalty, credit lines, exchanges, accounts).
  • Fund individual transactions from different sources based on rules.

Essentially, Embedded Processing enables Fintechs to become their own processors without the need for developing a full-blown processing system, or have the specialized knowledge to build and operate it. It takes the concept of a switch and expands it to cover not just the routing of the transaction, but also all the heavy lifting on the front and tail ends of the transaction, leaving the simple yes/no, and funding decisions for the Fintech partner.

Improving Collaboration to Cultivate Innovation

Many organizations acknowledge the evident experience gap and understand the importance of partnering with a niche team of processing experts to get their products and services to market sooner. 

With a team averaging more than a decade of direct industry experience, Qolo has taken care of all the cumbersome integrations and difficult transaction processes. By handling the technicalities of network and switch certifications and core transactional logic, our team navigates the bureaucracy and procedures so that you don’t have to. Transactions can be authorized and settled by us, with your input for approval or decline every step of the way. 

Qolo takes care of the difficult parts of the payment process so your team can focus on what it does best: innovate.

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