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Credit Card Processing in SAP Robert Pulaski – Sr. Manager/Architect Learning Points Why automate credit card processing? A basic understanding of credit card processing An overview of the process and related accounting for credit card processing in SAP

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credit card processing in sap

Credit Card Processing in SAP

Robert Pulaski – Sr. Manager/Architect

learning points
Learning Points
  • Why automate credit card processing?
  • A basic understanding of credit card processing
  • An overview of the process and related accounting for credit card processing in SAP
  • Highlight some important configuration in the IMG
  • Discuss implementation options and issues
  • Highlight some best practices
why automate credit cards in sap answer improved roi
Why automate credit cards in SAP? Answer - Improved ROI
  • Improve cash flow by reducing outstanding receivables from 30 – 90 days to 1 to 3 days
  • Reduce bad debt
  • Possibly reduce paper invoicing costs
  • Increase transaction efficiency
terminology
Terminology
  • Merchant ID – unique id identifying the supplier(you)
  • Processor (Clearing House) – provides authorization and settlement services
  • Merchant Bank – supplier’s bank(your bank)
  • 3rd Party Provider – provides the interfacing solution to allow SAP to communicate with the processor
process flow for credit card processing
Process Flow for Credit Card Processing

Supplier requests authorization and at a later time batch settlement

Processor provides authorization and settlement services

Buyer gives credit card info

Banks issue and receive funds

process overview in sap
Process Overview in SAP
  • Save valid sales order
    • Authorization request sent (real-time)
    • Authorization response - accept/decline (real-time)
  • Ship
  • Bill
  • Settlement (batch)
implementation options
Implementation Options
  • Build a custom program(s) to interface with the processor(s)
  • Purchase a 3rd party solution from vendors such as Cybersource or Paymetric
  • Manual (as a backup?)
pros cons custom programs
Pros/Cons Custom Programs
  • Pros
    • Lower initial external cost
    • Possibly lower transaction costs
    • If it already works – don’t fix it?
  • Cons
    • Custom development costs
    • Possible custom configuration in SAP
    • Maintenance of custom code
pros cons 3rd party solution
Pros/Cons 3rd Party Solution
  • Pros
    • No/little custom development costs
    • Less custom configuration in SAP
    • Maintenance/support of 3rd party vendor
    • Quicker to implement?
    • Can offer additional functionality beyond SAP delivered
  • Cons
    • Initial external cost
    • Possibly higher transaction costs
    • Maintenance/support of 3rd party vendor
implementation issues
Implementation Issues
  • 3rd Party Installation
    • Servers
    • Access keys
    • RFC calls
    • Etc..
    • Make sure you have good Basis and IT people if you attempt installation yourself. Otherwise best to have the 3rd party provider handle the installation.
implementation issues27
Implementation Issues
  • Authorization horizon/validity
    • Authorization window – number of days within a shipping confirmation window before a valid authorization can be issued
    • Authorization validity period – number of days an authorization is valid before a new authorization is required
      • Typically 28-30 days
    • Back orders can be a royal pain!
implementation issues28
Implementation Issues
  • Additional charges
    • Exact total for additional charges such as freight not known
    • Solution – user exit
implementation issues29
Implementation Issues
  • Split shipments
    • Partial or multiple shipments can require several authorizations
    • Solution – user-exit
implementation issues30
Implementation Issues
  • Multiple cards on one order
    • Different credit limits
    • Different credit card owners
    • CRM – different capabilities (though similar process)
implementation issues31
Implementation Issues
  • Foreign Currency
    • Make sure the clearing house you use can handle all currencies required
best practices
Best Practices
  • Encrypt credit card data via either 3rd party or SAP (4.6c)
    • Can require OSS notes
  • Limit access to credit card information via security
    • Only those who need access
  • Additional fraud checks
    • Address check
    • CID – Card Identification Number
    • Can require OSS notes or user-exits
additional transactions
Additional Transactions
  • FCC2 – Repeat Settlement
  • FCC4 – Display Logs
  • FCC3 – Delete Logs
  • FBRC – Reset Cleared Items
  • FCCR - Standard Reports
  • VKM1 – Credit Hold Report
  • VCC1 – Payment Card Credit Hold Report (New)
different flavors of sap
Different Flavors of SAP
  • CRM
  • SAP Retail and POS
  • Etc…
summary
Summary
  • Automated credit card processing can be efficient and enhance ROI
  • In most cases buying a 3rd party solution is going to be the best option compared to building a series of in-house custom programs
  • There will be lots of issues that need to be thought out carefully
  • Take credit card fraud seriously
slide36
Q&A

Robert Pulaski

Senior Manager - Architect

Hitachi Consulting

www.hitachiconsulting.com

Direct: 804.291.6009

rpulaski@hitachiconsulting.com

Inspiring your next success! ®