How You Set Up a Payment System

If your company wants to transmit electronic payments or funds capture transactions to a payment system or a bank, you must set up a payment system. A payment system defines the organization that Payments uses to process your funds capture and disbursement transactions.

Here's what can be considered as a payment system:

• The bank where your company has its bank accounts

• A third-party processor or gateway that connects your company to a financial network

Payment systems aren't required for printed disbursement payments, such as checks, but may be required for related services, such as a positive pay report.

Set up a payment system by completing these actions:

• Selecting a gateway or processor payment system

• Considering best practices

• Defining a payment system

• Specifying payment system settings

• Understanding payment system accounts

Selecting a Gateway or Processor Payment System

Payments supports both gateway and processor payment systems. A gateway is a service provider that acts as an intermediary between a first party payee and a payment processor. A processor is a service provider that interacts directly with banks and card institutions to process financial transactions. Examples of payment processors include Visa, MasterCard, and American Express.

Your choice of integrating with a gateway or a processor payment system is generally determined by your:

• Type of business

• Number of transactions per day

• Your bank

This table describes the differences between gateway and processor payment systems.

Factors	Gateways	Processors
Connectivity and Security	Provide easy connection, often using SSL-based internet connectivity.	Provide more rigorous security, connectivity, and testing requirements.
Additional Fees	Charge additional fees, including per-transaction fees, beyond what processors charge.	Not applicable.
Volume of Transactions	Favor lower-volume merchants or merchants who are willing to pay a per-transaction premium for easier setup and connectivity.	Often favor higher-volume merchants who are willing to exert more effort for processor connectivity.
Online or Offline	Takes all transactions online.	Enables authorizations in real-time and follow-up transactions, such as settlements and credits offline. Offline transactions must be batched together and sent as a single request to the payment system. All transactions other than authorizations are, by default, performed offline. Offline transactions are sent when the next settlement batch operation is attempted.

Considering Best Practices

Before you set up a payment system, use your current banking or processing relationship. Determine whether your bank or processor can process transactions or has a partnership with a processor.

Defining a Payment System

To define a payment system, go to Financials > Payments > Manage Payment Systems page in the Setup and Maintenance work area.

On the Manage Payment Systems page, click Create. The Create Payment System page appears.

When you set up a payment system on the Create Payment System page, specify these values:

• Types of payment instruments the payment system supports for funds capture transactions

• Data file formats and transmission protocols accepted by the payment system

• Settings required by the payment system

• Settings required by the tokenization provider if your company has enabled tokenization

Note: You can transmit a payment file offline by downloading it to your local drive and then emailing it to your payment system or bank. However, you may still require setting a payment system. The payment system and payment system account setup capture several attributes, which are passed in the payment file or settlement batch message. Without these attributes, a payment file is invalid and rejected by bank.

Specifying Payment System Settings

In the Settings Required by Payment System section, specify the settings that the payment system requires from each internal payer or payee. These settings can be used to identify the internal payer or payee as a client of the payment system or to provide other processing information. You can specify the type of data required for each setting and decide whether it's advisable to secure the setting's values by masking.

Tip: The payment system generally provides the values for the payment system settings, which you enter as part of the payment system account.

Understanding Payment System Accounts

You define your company's account with the payment system on the Edit Payment System Accounts page. The payment system account contains a value for each of the attributes required by the payment system. For example, the payment system may require a Submitter ID and Submitter Password to be included in any message sent to it.

You can configure a secure payment system account by entering a password. For secured settings, the values captured in the payment system account are masked.

Tip: You can set up multiple payment system accounts in Payments for a single payment system.

Using Payment System for PayPal

You can set PayPal as a payment option for transactions in self-service applications like Oracle Public Sector Cloud. PayPal is a globally accepted secured payment method.

Here are the details of preconfigured payment system for PayPal:

Attribute	Value
Name	PayPal
Code	ppal
Processing Model	Gateway

In the Settings Required by Payment System section of this payment system, these attributes are used:

Name	Code	Data Type	Secured
Agency Identifier	AGENCY_ID	Character	No
Alternate Account Identifier	ALT_ACCOUNT_IDENTIFIER	Character	No
Business Unit	BU_NAME	Character	No
Merchant Client ID	MERCHANT_CLIENT_ID	Character	Yes
Merchant Client Key	MERCHANT_CLIENT_KEY	Character	Yes
Payment endpoint URL	PAYMENT_ENDPOINT	Character	No
Security endpoint URL	SECURITY_ENDPOINT	Character	No

Note: You can use these settings to create a new payment system account.