13 Steps For Building An Ideal Payment Platform
Updated: Nov 13
I have previously shared 7 factors to consider in building an ideal Payout platform. In this article, I outline 13 specific steps involved in building a comprehensive payment platform to make the process of navigating the complex world of payments a little less daunting
Step 1: Identify and prioritize countries and currencies
Most managers and entrepreneurs do not appreciate the length of time it takes to add a new country or a new payment method in an existing country — it could take not days nor weeks but months!
It is therefore prudent to plan your payment strategies at least 6-9 months ahead of launching in any new market. For exotic currencies or hard to reach markets, this process could take up to a year or more.
Additionally, the rise of on-demand workers and freelancers in today’s modern economy makes it necessary to grant them instant access to their funds earned. To keep pace with the increasingly digital and independent workforce’s expectations, an ideal payout solution should integrate at least one instant payout option in each market.
Step 2: Discover your target audience’s payment preferences
Just as knowing your audience is a golden rule for marketing, it is critical for setting up a payment system that’s in tune with your users’ needs — after all, no two markets are alike when it comes to payment preferences. Are they smartphone-enabled and prefer mobile banking? Do they have access to a bank or mobile wallet or is cash the dominant payment method? Popular payout methods include bank transfer, Visa/MC top-ups, mobile wallet load, cash pickup and cash delivery while credit cards and bank transfers are the most preferred methods for payment acceptance.
Step 3: Find Payment Processors that match the above preferences in the target countries and currencies
This is a tricky step as there are many Payment Processors found online with a simple Google search. However, unless you are in the payment business, it is very difficult to find a trustworthy and reliable partner that suits your needs. Consider the following factors when evaluating an ideal Payment Processor:
Geographic reach & currencies
Technology (API, Portal, etc.)
Viability (investors, team, clients, fundraising, etc.)
Feasibility (availability, time to market, price)
Flexibility (customization, responsiveness to change requests)
Service Level Agreements
This step will likely take you the longest amount of time if done properly. I suggest using a spreadsheet and assigning scores of 0-5 (from the worst to the best) to each criteria above as well as weight factors depending on their importance to your particular business in order to help you identify the right partners.
Make sure to involve other stakeholders such as the in-house dev team, key clients and recipients in order to get their buy-in early and root out any objections before you go too far down the road with any single Payment Processor.
Step 4: Complete mutual due diligence with each Payment Processor
Perform Know Your Customer (KYC) verification on the beneficial owners (10% or more) of each Payment Processor, check their references thoroughly and ask for audited financials if available. After all, you will be sending large sums of cash to these Payment Processors, many of whom are located across the oceans and in various unfamiliar jurisdictions so you want to make sure you are very comfortable trusting them with your money.
Banks are notoriously tough on their vendors so if your selected Payment Processor counts any banks as clients, that would be a reassuring sign.
Make sure to also ask your selected Payment Processor for references on past clients who are no longer their client. Some may not wish to provide this information but it would be invaluable for you to have access to past clients and find out what they liked or didn’t like about the Payment Processor.
Step 5: Negotiate agreements with the selected Payment Processors
In many markets, such as most developing countries, agreements are not standardized and negotiations on terms and fees could take a decent amount of time and energy so be prepared. Any research completed in Step 4 above, such as Payment Processor’s financial conditions, market competitiveness and regional trends could help you land more favorable terms during agreement negotiations.
Step 6: Sign an agreement
It is a good idea to have your legal and compliance team review the Payment Processor agreements. Pay close attention to details such as:
Definition of the project
Terms including termination clauses
Service Level Agreements
Pricing (including fees not previously disclosed)
Step 7: Assemble a tech team to integrate with all the Payment Processors
It is important to involve your CTO/lead developer early on in this process. They can identify any particular integration issues early on and provide reasonable cost estimates and timelines to ensure that your project can be delivered on-time and on budget. This can be a very costly endeavor as Payments are not your team’s core competency and the learning curve can be very steep for your team members
Step 8: Test integrated solution prior to launch
You will want to launch with a limited number of recipients in a small market segment to test everything thoroughly including accuracy of payment, delivery times, FX rates, reporting, etc. Please allow 6-8 weeks for comprehensive testing depending on your audience size, number of currencies/countries and the complexities of your legacy systems.
Step 9: Launch with the chosen Payment Processor
Once you are 100% satisfied with test results, you can coordinate a full launch with your Payment Processor. It is advisable to communicate your launch plan with all stakeholders including your internal teams (technology, finance, sales and marketing) as well as external teams (recipients, investors, bank partners, etc.). Your launch plan should include launch date, Payment options and frequently asked Q&As (TIP: your Payment Processor should be able to help you with this).
Step 10: Repeat steps 3-9 for each new Payment Processor
Your efforts have paid off and now you are ready to rinse and repeat the same process all over again until you have global coverage with all relevant payment types!
Step 11: Consolidate Reports
As you add more than one Payment Processor, you will discover that each partner will have a different set of reports with varying data field names and sizes as well as different cutoff times. It is extremely important that you spend the technical resources necessary upfront to consolidate all reports into one, easy to digest format for your finance and treasury team in order to make it easier for them to reconcile all Payments on a monthly, quarterly or annual basis.
Step 12: Survey your audience periodically to ensure that you are meeting their payment needs
Although your launch plan may have gone without a hitch, it is still a good idea to survey your recipients periodically to ask them about their experience with your Payments and to solicit feedback on ways to improve the process. Make sure to communicate these findings with your Payment Processors regularly (at least quarterly).
Step 13: Review each Payment Processor annually and adjust as needed
Regulations change and new Payment Processors with better, more flexible and lower cost Payment options pop up all the time so keep your options open and continuously be on the lookout for new disruptions that your Payment platform might benefit from. It is also a good idea to always have a backup plan with redundancy so that your whole business is not dependent on only one Payment Processor.
Creating an ideal payment platform is not fast nor easy but, given enough time and resources and following the above 12 steps, you can eventually build a great network of Payment Processors that if maintained properly, could help you expand globally and scale up while offering a better user experience to your recipients.
Alternatively, you can simply partner with a Payment Gateway such as ZED Network and be introduced to a number of pre-screened Payment Processors that you can launch with a single integration, thus saving you an enormous amount of time and technical resources.
ZED also provides you with valuable services like data validation, consolidated reporting and optional KYC services at nominal costs which are often offset by the savings you realize from pre-negotiated fees charged by Payment Processors based on ZED’s aggregate client volume.
Whichever option you choose, to build your own payment network or partner with a Gateway like ZED, your business will surely benefit from enhancing your payment options and offering your recipients multiple payment options to choose from.