Host-to-host is a payment model where transactions are made directly between two connected hosts or servers. In this process, the two systems exchange data to complete the transaction without involving third parties or intermediaries like payment gateways.
The advanced technology behind H2H enables it to replace manual payment processes, especially cash payments. A popular application of H2H is QRIS, which is used in two modes: CPM (customer presented mode) and MPM (merchant presented mode).
Due to its efficiency, host-to-host is now widely adopted by businesses to ensure safer and more seamless transactions. So, what are the functions and benefits of using host-to-host in business? Find a detailed explanation in this article.
What is Host-to-Host Payment?
Host-to-host (H2H) is an electronic system that enables two institutions to connect directly, securely, and in real-time through an encrypted network.
Have you ever bought concert tickets? Often, when making a payment, you are directed to a payment gateway. This is an intermediary between the merchant (such as an online store) and the banking system to ensure that the transaction can be processed safely and efficiently.
In the host-to-host system, the payment gateway is not needed. In other words, the transaction process becomes more streamlined, easier, and more efficient.
Functions of Host-to-Host (H2H) Payments
Host-to-host (H2H) is widely applied across various sectors, including education, healthcare, and business. Here are some examples of H2H implementation in different areas:
1. Payments and Financial Transactions
The main function of H2H is to simplify payment transactions, such as fund transfers between banks, company salary payments to employee accounts, payments between two business entities, payments between customers and merchants, and e-wallet top-ups. With H2H, these processes become faster, more efficient, and secure.
2. Transactions in E-Commerce
In addition to general transactions, host-to-host is highly relied upon in e-commerce. If you run an online store, you can benefit from host-to-host in the following ways:
a. Payments, H2H enables the merchant system to connect directly to the payment provider’s server (such as a bank or financial institution) to verify and process payment transactions automatically.
b. ERP System Integration, e-commerce companies can use H2H to integrate their existing Enterprise Resource Planning (ERP) system with payment or shipping systems. This helps automate order processing and invoice generation.
3. Payments for Public and Government Services
a. Tax or Bill Payments, payments for bills such as taxes, electricity, water, WiFi, or health insurance are increasingly using H2H. Through this system, government agencies can connect with service providers to verify and process payments.
b. Social Aid Management, with H2H, the distribution of aid funds becomes more efficient. Banks or service providers collaborate with government agencies to disburse funds to eligible individuals.
4. Healthcare Sector Aid
H2H also benefits the healthcare sector, especially for insurance holders. Hospitals or healthcare providers can directly send claims data to insurance companies for verification, speeding up the claims payment process.
5. Education Fee Payment
As the new academic year approaches, many students make payments for their tuition fees at banks. With H2H, students can receive a payment number from the campus system. Then, they can simply visit the bank or pay via Virtual Account using that number.
Metode Pembayaran dengan Sistem Host to Host
Host-to-Host (H2H) can be applied in various payment methods and transactions that involve direct communication between two servers or systems. Other payment methods that can use the host-to-host system include:
- Interbank Transfers
- Payments via E-wallets (OVO, DANA, GoPay, ShopeePay, etc.)
- Payments Using Credit/Debit Cards
- Virtual Accounts
- E-money (Electronic Balance)
Benefits of Host to Host Payment
Why should you use the host-to-host system? What advantages does it have compared to point-to-host or payment gateways? Here's the discussion:
1. Easy and Automated Payment
Since it does not involve a third party, the host-to-host payment process becomes simpler and more automated. This helps minimize human error. Users only need to make the transaction once, and the system will process it immediately without further intervention. This simplifies the transaction for both the sender and the receiver, making it quick and efficient.
2. Real-Time Transaction
One of the main advantages of the host-to-host system is its ability to process transactions in real-time. As soon as the payment is made, information is sent and received by both parties without delay. This efficiency makes it suitable for transactions of all sizes, whether small or large.
3. Efficient and Cost-Effective
By using the host-to-host system, businesses can avoid additional fees usually charged by third parties, such as payment gateways. Additionally, this system reduces the risk of errors that require manual handling. This is important because manual errors can take longer to fix and increase costs, which could disrupt business operations.
4. Integrated System
The host-to-host payment system is directly connected to the company’s internal systems, such as inventory management and CRM. For example, in Youtap POS (Point of Sale) applications, there are features like Inventory Management and Static/Dynamic QRIS for accepting payments from customers. This integration ensures transactions are processed directly, without the need for manual input, making the process more structured and efficient.
5. Higher Monitoring and Accountability
Transactions through host-to-host can be monitored and tracked simultaneously. If there’s an error, it can be resolved immediately. This also increases accountability since the recorded data can be used for audits and more transparent reporting. The positive impact is that the potential for fraud is reduced.
6. High Level of Security
Since transactions occur directly between two connected hosts, sensitive data does not need to go through third-party intermediaries. This reduces the risk of data leakage. Furthermore, host-to-host systems are often equipped with strong encryption technology to protect the transmitted information, making it safer from cyber threats.
7. Improved Customer Experience
The use of host-to-host systems provides convenience for customers, especially in a cashless society. Customers can save time and make payments through faster processes. Along with quality products, the ease of transactions can be one of the reasons customers may choose to place repeat orders in the future.
Easier Business Transactions with Youtap Enterprise Host-to-Host
Want to make your business grow even further? Let's take advantage of Youtap Pay for host-to-host payment services! Youtap Pay is an H2H payment solution with various integrated methods, such as QRIS, VA transfer, e-wallet payments, bank transfers, and payment links.
The variety of payment methods makes it easier for customers to complete transactions according to their preferences, making business transactions safer and more convenient.
In essence, the host-to-host system is something we encounter in our daily lives, often without realizing it. However, for business owners, understanding the function and operation of this system is crucial so you can optimize its use in your business. So, let's adopt the host-to-host system from Youtap Indonesia now!
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