Explaining Digital Payments

The SAP digital payments add-on enables you to connect SAP and non-SAP consumer applications with non-SAP payment service providers (PSPs). Its function is to facilitate secure, end-to-end processing of digital payments.

You can connect to the payment service providers shown via the SAP digital payments add-on (providing you have a contract with the PSP in question).

SAP digital payments is a payment hub between payment service providers and SAP components, solutions, or applications that process incoming credit card payments.

It enables the integration between SAP S/4HANA and SAP digital payments, which allows for the use of credit card payment methods in SAP S/4HANA for incoming payments.

The complete process from settlement using secure tokens via payment service provider advice to final bank statement is covered and automated. Various payment service providers are supported.

The SAP digital payments add-on also supports what are referred to as external payments. External payments are payments made using external channels, such as online or mobile payments systems, rather than payment cards.

Depending on the PSP's functional scope, external payments can be implemented using either a one-step procedure (known as 'direct capture') where the payment is charged directly to the payer's account without any prior authorization, or a two-step procedure (known as 'charge with authorization') where the payment is first authorized at the payer's account before being charged.

The system landscape for payment scenarios using the SAP digital payments add-on is composed of three elements:

• Consumer application:

  Several SAP S/4HANA consumer applications shown can be integrated with the SAP digital payments add-on. There are certainly a few more which can be found on the SAP Help Portal.

  The consumer application sends a request to the SAP digital payments add-on.

• SAP digital payments add-on on SAP Cloud Platform: The SAP digital payments add-on processes the requests from the consumer application and routes them to the relevant external payment service provider (PSP). The add-on contains one 'core' adapter and one adapter for each PSP. The request is forwarded to the relevant PSP via its adapter where it is mapped into the appropriate format.
• Payment service provider: The SAP digital payments add-on and the external PSPs communicate using Web services. Most of this communication is synchronous.

The complete process for the customer payment scenario can be described as the following:

The customer logs on to Cloud for customer payments to add a credit card to their account.

Payment of open items with credit card: Customer logs on to SAP S/4HANA Cloud for customer payments to pay its open items with credit card.

As an A/R accountant, and after an invoice has been created, you can clear the open items of the invoice by initiating either the automatic credit card payment or creating the manual credit card payment in SAP S/4HANA.

When the settlement run is done, the status of the settled credit card payments changes to In Transfer and the payment message is sent to the provider by web services.

The service provider will then forward the message to the clearing house. The clearing house will check the request and send a reply via the provider as to whether it will credit (or debit) the amount of the credit card payments bundled in the message to your account. This reply is automatically updated to the system in the form of the appropriate settlement status.

The credit card advice contains items (taxes, charges) in the cash position that are not captured automatically. It acts like a memo, ensuring that the item is reflected in the current cash position.

This is standard FI-AR functionality for important bank statement details. The bank statement is usually very aggregated and is therefore not useful for clearing (no settlements, no individual transactions). That is why the advice functionality is so helpful for Finance teams.