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This blog offers general guidance based on information available at the time of publication. For the most up-to-date details, please contact Netcash or other service providers directly.
Today, managing business payments is more complex than ever before. Manual payment processing, transaction reconciliation, and banking limitations stemming from legacy infrastructure create a perfect storm that leaves businesses burdened with administrative work.
Most businesses assume payments must be handled through their bank. That is an option, but it often involves complex integrations and cash flow uncertainty due to delayed or unallocated funds. The most efficient option is partnering with a third-party payment provider (TPPP). This solution simplifies payment processing, streamlines reconciliation, and makes scaling easier.
If you’re wondering why modern businesses don’t directly collect payment from banks, this guide is for you. It explains how using a third-party payment provider can help reduce admin work, simplify payment management, and help your business operate more efficiently.
Ready to streamline your business payments?
Contact Netcash for a solution that automates payments, simplifies reconciliation, and allows you to scale without hassle.
What is a third-party payment provider (TPPP)?
In simple terms, a third-party payment provider, or TPPP for short, is a financial intermediary that securely and efficiently processes payments on behalf of a business. It connects customers (payers), businesses (product sellers or service providers), and their respective banks.
Essentially, a TPPP acts as a payment middleman that simplifies the transaction process.
Think of it as a logistics company that delivers packages instead of the business running its own fleet of delivery trucks or vans. A third-party payment provider can manage payment collections, supplier payments, payroll, bulk transactions, debit orders, EFTs, tracking, and reconciliation. It is convenient, efficient, and reduces admin workload, allowing you to focus on core operations.
The key players in a TPPP payment process
Below are the key players in a typical TPPP payment process and their roles.
| Role | Who | What they do |
| Customer (payer) | The individual or business making a payment | Initiates a payment or authorises a debit order collection to the business |
| Business (Netcash client) | The company collecting the payment | Uses Netcash to collect, manage, and reconcile the payment |
| Netcash (TPPP) | The payment intermediary | Facilitates and processes the transaction between all parties |
| Customer’s bank (the issuing bank) | The financial institution that issued the customer’s bank account | Authorises and processes the debit from the customer’s account |
| Business’s bank (the receiving/acquiring bank) | The financial institution that holds the merchant’s business account | Received funds on behalf of the business via Netcash |
Why don’t businesses collect payments directly from banks?
Businesses are moving away from collecting payments directly through banks, but this is not because banking institutions are not essential. In fact, TPPPs work alongside banks; they do not replace them. Here’s why more businesses are opting out of collecting payments via banks.
- Direct bank integrations can be complex: Direct bank integrations require significant technical expertise and ongoing management that most SMEs don’t have in-house. This process is typically time-consuming to set up and may require a big upfront investment.
- Payment administration takes time: Without a TPPP, uploads, tracking, and reconciliation often require significant manual intervention. This creates bottlenecks and places an administrative burden on the finance team, possibly leading to errors.
- Banks are not always designed around business workflows: Banks offer standardised financial products or services, which are often not designed or tailored to specific business workflows.
- Increased operational risk: Human error is more likely without automated systems, especially when managing high-volume payments. Failed payments, misallocated funds, or missed collections fall through the cracks and are harder to correct manually, causing cash flow issues.
- Scalability challenges: Rigid bank solutions are often difficult to scale as your business grows and payment volumes increase. Adding new payment channels may require additional integrations, new agreements, and stricter compliance measures.
- Cost considerations: Managing payments directly through banks is typically more expensive, as it may entail hidden costs such as manual processing, IT resources, and time spent resolving errors.
The key benefits of using a third-party payments provider
Using a third-party payment system is not a nice-to-have when running a business in South Africa; it is an essential for smooth payment collection. Here are the top benefits of TPPPs.
- Efficiency through automation: Streamline recurring payment collections, quickly process bulk payments, and save time by eliminating error-prone administrative tasks.
- Improved accuracy: Automated processes are less prone to human error, enabling accurate payment matching and reducing reconciliation time. A system with fewer manual touchpoints is more efficient, particularly when managing high payment volumes.
- Significant time savings: Faster payment processing and reduced reconciliation workload free up a finance team’s time, meaning they can focus on strategic business activities instead of repetitive administrative work.
- Enhanced security and compliance: Payments processed through secure systems adhere to data protection measures, reducing fraud exposure and helping businesses meet compliance requirements and industry standards.
- Better cash flow visibility: TPPPs enable real-time payment status visibility, easier collection tracking, and improved forecasting and financial planning.
- Easier reconciliation: A centralised system enables transaction matching, improves accounting accuracy, and provides consolidated reporting, simplifying reconciliation.
- Scalability as the business grows: TPPPs offer greater flexibility, adapt to business requirements, enable new payment channels without system overhauls, and provide ongoing support to scale as a business grows or payment volumes increase.
Why businesses choose Netcash as their third-party payments provider
Netcash is a South African third-party payment platform. It combines all the core capabilities of a TPPP into a single system built specifically for the SA business environment. It’s familiarity with local compliance laws and banking structures, it provides you with a secure ecosystem for collecting, managing, tracking, and reconciling payments via a simple integration.
Take a closer look at why many South African SMEs are partnering with Netcash as their TPPP.
Proven payments expertise
Long-standing experience in payments processing that spans over 20 years. Netcash leads with a customer-first approach, upholds industry standards, and continually innovates its services to meet ever-changing business requirements. With a proven track record across multiple industries and supporting partners that simplify accounting, payroll, billing, and eCommerce, Netcash acts as the engine in the background, while you focus on growing your business.
Built for South African businesses
Global payment providers may seem attractive due to their popularity, but their limited adaptation to local markets makes them challenging for SMEs. In contrast, Netcash payment services are designed for the South African market. We understand local payment laws and keep a close eye on emerging trends and regulatory changes.
Compliant with both the Payments Association of South Africa (PASA) and Financial Sector Conduct Authority (FSCA), Netcash helps businesses stay compliant with industry standards.
Reliable and secure platform
Payment processing requires high security levels as it involves sensitive customer information. Netcash is a registered third-party payments provider with the FSCA and PASA, and is PCI DSS Level 1 compliant for secure card transactions. It also has 3D Secure and 2-Factor Authentication processes as safety measures to ensure reliable payment processing.
Multiple payment types in one platform
Payment trends in South Africa show a growing appetite for flexible, mobile-first solutions, which Netcash securely facilitates via its integrated payment gateway. Whether you primarily accept card payments, instant EFTs, debit orders, subscription billing, or a mixture of all, Netcash is built to manage, track, and reconcile these transactions. This broad range of payment methods not only encourages higher collection rates but also improves the customer experience.
A single view of payments
Designed for payment tracking, Netcash allows you to collect, manage, and reconcile payments on a centralised dashboard. This visibility enables accurate financial reporting and operational planning. While smaller businesses can get away with limited visibility, transparency is crucial for SMEs looking to scale, as it provides a real-time view of incoming and outgoing payments.
By managing multiple payment types through one platform, businesses receive a single statement for all products, making it easier to track payments, view transactions, and manage reconciliation in one place.
Integration capabilities
Netcash easily integrates with existing business systems across industries. It’s a plug-and-play solution that requires little to no technical expertise, with an API for advanced integrations.
You’ll also have access to partner integrations with accounting, payroll, billing, and eCommerce solutions, offering solutions beyond payment processing. These enable you to operate your business through a connected system that lets you sell on Shopify, accept and manage multiple payment types such as card, instant EFT, or debit order via Netcash, and reconcile transactions in Sage or Xero without needing separate systems for each payment method.
Reliable support and ongoing assistance
Netcash offers a local support team and a dedicated account manager in the South African time zone, ensuring support is available during business hours. You can contact the team via phone call or email, and rest assured, assistance will be prompt. Netcash also offers technical support for complex queries, from integration issues to questions about our API.
A scalable payments partner
Netcash’s bulk payment capabilities enable batch debit order processing, supplier or creditor payments, and salary payouts with minimal manual intervention. A simple upload and setup, and you can expect payments to come in as per customer agreements. Failed collections can be quickly recovered using payment requests, which send a link via email or SMS.
Looking for greater cash flow visibility and simpler payment management?
Get in touch with Netcash for a comprehensive solution that simplifies payments and streamlines reconciliation.
Frequently asked questions about third-party payment providers
Simplify your payments with Netcash, a trusted TPPP
Third-party payment providers are a game-changer for South African SMEs looking to grow. With a smooth collection and payment process, seamless tracking, and simpler reconciliation, you can take your business to newer heights with a TPPP that understands local demands.
Payment management should support business growth, not create more administrative work. Without a TPPP, you risk cash flow uncertainty, time-consuming reconciliation, and opaque records that could cost you money, and in the long run, even non-compliance penalties.
Netcash is a trusted third-party payment provider that simplifies and streamlines the payment process. Greater cash flow visibility, integrated partner solutions, and industry-level compliance eliminate the hassle, allowing improved operations. Whether you’re starting a business or looking to scale as your payment volumes grow, our solution is built to adapt to your needs.
Looking for automation, accuracy, cash flow visibility, security, and scalability?
Contact us today to find out how Netcash can help you seamlessly grow your business in South Africa.
Author:
Paul Adant
Business Solutions Manager
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Paul has over 30 years experience in banking and the payment industry, he has a passion for translating needs into effective solutions. Cultivating strategic partnerships with integrated software vendors and producing cost effective, efficient and time saving business solutions make him a valuable member of the team at Netcash.
