Describing the functionality and capabilities of the SAP digital payments add-on

In our fast-paced digital world, businesses are under increasing pressure to offer smooth and secure payment options. Traditional methods often require complicated setups with several payment service providers (PSPs), causing inefficiencies and potential security risks.

Enter the SAP digital payments add-on. This all-in-one solution simplifies the process, eliminates these hurdles, and enhances overall payment efficiency. Let's explore how it revolutionizes your payment experience!

Introducing the SAP digital payments add-on

Powered by the robust SAP Business Technology Platform (SAP BTP), the SAP digital payments add-on acts as a centralized hub, simplifying the interaction between your S/4HANA business applications and a wide array of payment service providers (PSPs).

These are some of the key advantages gained by using the SAP digital payments add-on:

• Simplified Integration: Prebuilt, standardized connections eliminate the need for custom integrations, accelerating the deployment time for new payment methods and providers.
• Enhanced Flexibility and Scalability: Seamlessly add or switch payment providers with minimal disruption, enabling businesses to adapt quickly to changing market dynamics and customer preferences.
• Reinforced Security and Compliance: By leveraging the secure infrastructure of the SAP Cloud Platform, the SAP digital payments add-on reduces the risk of data breaches and ensures adherence to industry regulations.
• Centralized operation, maintenance, and support by SAP: The SaaS model removes the need for customers to individually manage the connectivity.

The SAP digital payments add-on is designed to empower businesses to overcome the complexities of traditional payment processing, paving the way for streamlined operations, enhanced security, and increased agility.

By centralizing and simplifying payment interactions, the SAP digital payments add-on unlocks the full potential of digital transformation for all kinds of businesses. Now, let’s find out how to achieve this.

For your finance department, using the SAP digital payments add-on maximizes the benefits of adopting a standard approach and has the following advantages:

• Reduced effort in reconciliation: A significant decrease in the effort needed to reconcile digital payments with open items through continual process oversight.
• Expanded digital payment options: A wider range of choices for digital payment methods, supporting various cards and options.
• Future-proof finance systems: Ensures finance systems remain up to date without the need for modifications to backend SAP systems.

• Automated reconciliation: Eliminate the manual effort of post-processing bank statements by ensuring SAP keeps information flow stable to allow for automated reconciliation of payments with open items, despite granularity changes.
• Added business value: Maximize the benefits of post-payment activities, such as advice handling, to provide additional value to the business.
• Standard connections to PSPs: SAP services provide standard links to payment service providers (PSPs) and digital payment methods, enabling all regions to participate in digital payment processing.

For your IT department, there are also many advantages to adopting this standard approach:

• Predictable setup and operational costs: Utilize SAP services to connect to world-class PSPs and digital payment processors, ensuring predictable costs for integration.
• Avoid expensive PCI-compliance audits: By using standard connection methods, you can keep sensitive data out of your system, saving you from costly compliance audits.
• Simplified operations: With SAP as your service provider, enjoy streamlined operations across your IT landscape, including all format changes taken care of by SAP.
• Future-proof: As your IT landscape evolves, your links to digital payment methods remain stable, and SAP will keep your payment processes up to date as new methods and providers emerge.

Additional capabilities:

• Technical integration to world-class PSPs and digital payment processors: The list of supported providers is continually growing.
• Tokenization approach: With sensitive data not stored in the SAP system, you can avoid PCI-compliance audits and ensure PCI compliance, as no sensitive card data is stored in business solutions.
• Stable and harmonized APIs: Integration with non-SAP solutions is possible, with APIs that are not dependent on PSP integration methods, providing a single solution for your entire landscape.
• Support for multiple back-end systems: Enjoy the flexibility of integrating with various backend systems.

To summarize, here is a list of benefits and capabilities.

• Simplified and centralized operations, maintenance and support

• Reduced audit costs

• Predictable setup costs for integrating Payment Service Providers (PSPs)

• Reduced manual reconciliation effort related to digital payments

• Increased choice of digital payment options for customers and sales teams

• Insulates finance systems from changes as digital payment methods evolve

• Out-of-box integration to multiple Payment Service Providers (PSP) without implementation efforts

• Easy enabling of new Payment Methods and PSPs

• Tokenization approach avoids costs and risks

• Enablement of automated splitting and posting of fees and taxes related to payments

• Enablement of automated reconciliation of payments with open items

• Stable and harmonized interfaces for all SAP and also non-SAP solutions

The SAP digital payments add-on has been designed to meet the requirements of the Payment Card Industry Data Security Standard (PCI DSS). Here are some key points to consider:

• Credit card numbers will not be stored or processed in the consumer application, including SAP S/4HANA, or through SAP digital payments.
• Only external partners who are PCI DSS-certified, known as Payment Service Providers, are responsible for processing and storing the original card data.
• The actual credit card number is substituted with a token by the Payment Service Provider.
• In the SAP software, only the token is used for identification and is the only information that is processed and stored.

For more detailed information, you can refer to the PCI DSS Attestation of Compliance and SAP Trust Center. These guidelines are essential for understanding the secure handling of digital payments.

Furthermore, ensuring that the Security Standard (PCI DSS) certification is up to date can be a labor-intensive and costly process. Digital payments streamlines this task, placing the responsibility on SAP instead of the user company. This frees up resources and saves money.

The SAP digital payments add-on seamlessly integrates SAP and non-SAP consumer applications with non-SAP payment service providers (PSPs). Its primary function is to ensure the secure and complete processing of digital payments.

SAP Digital Payments allows you to establish connections with the featured payment service providers.

You need to be aware that digital payment functions delivered are dependent on the services consumed and delivered within the consumer application, so it‘s necessary to verify the covered scenarios in advance.

The SAP digital payments add-on is a payment hub that acts as an intermediary between payment service providers (PSPs) and various SAP components, solutions, and applications that handle incoming payment card payments. This integration allows users of SAP S/4HANA to process payment card payments for incoming payments efficiently. The entire process is fully automated and seamlessly covered, from secure token-based settlement via payment service provider advice to the final bank statement.

The application also supports various payment service providers and enables the handling of external payments, which are payments made via external channels such as online or mobile payment systems. This functionality is implemented through the Best Practice Scope Item 2LZ. In some cases, depending on the payment service provider's capabilities, external payments can be performed using a one-step procedure known as direct capture, where payments are charged directly to the payer's account without prior authorization.

Additionally, a two-step procedure known as charge with authorization can also be used, where payments are first authorized at the payer's account before being charged.

Reviewing the SAP digital payments add-on landscape, there are three critical components to be aware of:

• Consumer application: Conveying needed information to the SAP Business Technology Platform (BTP) customer accounts, such as SAP S/4HANA, is done via REST web services. This communication is usually initiated by the consumer application.
• SAP Digital Payments on SAP BTP: This service enables the processing of consumer application requests and their transmission to the pertinent external Payment Service Provider (PSP). It includes a core adapter and individual adapters for each PSP. It's important to note that messages from this service are only available in English.
• Payment Service Provider: Web services typically facilitate communication between the SAP digital payments add-on and the external PSPs. The majority of this communication is synchronous.

The high-level interaction between these interconnected systems involves several key steps:

1. The consumer application sends a request to the SAP digital payments add-on.
2. The SAP digital payments add-on identifies the appropriate PSP based on the request details through a process called routing.
3. Subsequently, the request is directed to the relevant PSP via its adapter, where it's converted into the required format.
4. The PSP connection is established, making use of the PSP's technical requirements. Account identification at the PSP is achieved through credentials issued by the PSP.

The SAP digital payments add-on provides a layered approach to handling payment workflows, highlighting the integration among the consumer application, SAP BTP, and external PSPs.

Additionally, the application offers robust capabilities for coherently handling communication and payment request processing.

A variety of SAP S/4HANA user applications can be seamlessly integrated with the SAP digital payments add-on.

The detailed applications list can be reviewed on the SAP Help Portal: Integration Using the SAP digital payments add-on | SAP Help Portal

Within this process, the consumer application sends a request to the SAP digital payments add-on. The solution then identifies the relevant PSP based on the request details in a step known as routing. Finally, the request is sent to the appropriate PSP adapter, where it’s converted into the necessary format.

The system administrator's previously stored credentials are used to establish a connection with the PSP, and the request is transmitted using the PSP's required technical protocol.

The current list of supported payment service providers (PSPs) and the location of their data center can be found in the SAP Help Portal: Data Centers (Regions) | SAP Help Portal

The integration of real-time payments, when implemented without the SAP digital payments add-on, involves multiple individual configuration points between various consumer applications and payment service providers. This leads to significant inefficiencies due to the increased effort required for setup and maintenance, as well as technical lock-in, making it challenging and costly to switch between PSP.

• Payment Service Provider (PSP) Integration
  • Custom specific implementation and maintenance per PSP
  • Technical lock-in
• Payment Methods
  • Restricted to credit card payments
  • Further digital payment methods only via custom implementation
• Payment Card Security: Critical credit card data stored in ERP – risk of data loss
• Reconciliation: No automatic post processing in accounting, high manual effort and error prone

The integration of real-time payments using the SAP digital payments add-on establishes the foundation for creating a central payment orchestration platform. A key benefit of this approach is the stable and harmonized interface for all SAP solutions. Another significant advantage is the centralized operation, maintenance, and support in a single location. Additionally, it allows for the seamless onboarding of new payment service providers (PSPs) and their immediate availability across all SAP products and processes.