Payment Gateway Integration - The Ultimate Starter Guide!

Running an e-store OR providing a service online?
Operating a selling website OR got a paid app launched in the app store?
Whatever your business’ e-presence model may be like - financial transactions are probably the most sensitive part of it and thus you’ve landed to dig through the ABCs of payment gateway integration in your website. 

Whether you are a first-timer in the payment mode integration space or one who has suffered from an impulsive website payment gateway gone wrong - you are about to absorb the answers to all your questions with bonus tips to get under one roof user’s convenience, seamless experience and firm security.

In case you haven’t checked out our take and tips on financial software development yet - you know what to do now! 

 

What Is A Payment Gateway?

The service authorizing and processing payments in business transactions across both online and offline stores is popularly termed as payment gateway. Simply put, a payment  gateway is a platform connecting customers’ source of e-cash with the merchant's account.

Payment gateway integration refers to establishing a connection between a merchant's account and that of the payment service provider’s through a well-built API.

Read : API Development guide by BinaryFolks

However it isn’t as simple as it may sound because an array of security protocols along with encryption methodologies are involved in the process of transaction with integrated payment gateway. 

Let’s have a quick look at the purposes payment gateways serve :

1. Integrate payments with digital solutions used by merchants and its customers use for financial transactions
2. Carry out dipping or swiping transactions at a POS or right through a mobile device
3. Receive transactions using NFC technology

 

How Does A Payment Gateway Work?

Payment gateway is the last & final step of the contemporary sales process but consists of several sensitive steps for security concerns. Here’s how it works :

1. To complete the purchase the consumer enters their debit card / credit card / UPI / relevant digital payment information and confirms submission
2. The consumer's web browser makes use of SSL to encrypt the payment info securely
3. The merchant sends the information over to the payment gateway with the help of SSL.
4. The payment gateway further hands over the information to the suitable payment processor
5. The data is then forwarded to the associated payment source ( credit card / debit card / relevant financial organization for verification
6. After authentication of the request the verification status is sent back to the payment gateway via the payment processor 
7. The received status is then shared with both the end parties - consumer & merchant by the payment gateway marking the transaction approved or rejected
8. Such approvals are then sent back to the same source approving the transaction and the relevant source transfers requested funds to the merchant’s linked account

 

Types Of Payment Systems 

Before diving deeper into the nitty gritties of integrated payment gateway let’s first have a clear understanding of the broad categories of payment gateways :

 

[1] Hosted Payment Gateways

Hosted payment gateways are the type that instruct your customer to shift to the Payment Service Provider (PSP) page to execute the transaction & once done,  redirect back to your site to complete the checkout process. Example : PayPal

 

Pros Of Hosted Payment Gateways :

1. Being PCI compliant the transactions are fraud proof and highly secured
2. Easy to set up 
3. Provide personalized user experience

 

Cons Of Hosted Payment Gateways :

1. Since hosted payment gateways redirect the user out of its webpage for transaction execution, it becomes a little time-taking and ‘too-much-toggle-between-pages’ for user’s convenience

 

[2] Self-Hosted Payment Gateways

With self hosted payment gateways the payment info is collected from the customer straight from the merchant’s website itself and thus transaction to checkout everything is processed at a single place.

 

Pros Of Self-Hosted Payment Gateways :

1. Quicker checkout
2. The merchant has complete control over payment acceptance process

 

Cons Of Self-Hosted payment gateways :

1. Lack of consistent support

 

[3] API/Non-hosted Payment Gateways

API hosted payment gateways enable customers to enter their payment details right on the merchant’s checkout page and then the transactions are processed through either an API (Application Programming Interface) or HTTPS queries.

 

Pros Of API/Non-hosted Payment Gateways :

1. Customizable
2. Ease of integration

 

Cons Of API/Non-hosted Payment Gateways :

1. Since the PCI DSS compliance and SSL certification is the merchant’s responsibility, security may be compromised.

 

[4] Custom Payment Gateways

Quite as the name suggests, for custom payment gateway integration there is no set definition as the term ‘custom’ has no limits. Basically it enables the buyers to carry out an e-purchase without involving a credit card or debit card. Here you define the instructions based on how you want your consumers to execute transactions.

 

Payment Gateway Integration : Security Standards

Does Your Business Need A Payment Gateway For Websites? 

All the goodness that payment gateway integration brings in, but do you really need it? To answer this question - let’s try answering a few more! Read the below questions first & try answering in yes or no in your head :

[1] Does your business need (or in future possibly need) online payments?
[2] Do you prioritize the following?

[a] Faster Payment Processing

[b] Improved Flexibility

[c] Minimized Downtime

[d] Solid Fraud Protection

[c] Transparent Fee Structure

[d] Expanded Market Footprints

If your answer is ‘Yes’ to more than 50% of the questions, the answer is that getting a payment gateway for website should be your immediate concern!

 

Challenges In Payment Gateway 

Challenges are galore in every step of a business process and the number of such challenges multiplies when it involves financial dealings. So quite justably, for payment gateway integration it involves a few pitfalls too. Here goes the list : 

Top 7 Things To Keep In Mind For Payment Gateway Integration 

While it’s true that the ‘ideal’ process to integrate payment gateway varies for each business and its goals, there are a few things that almost each business wants to woo their customers with. Here’s a list of top 7 of such sought after features : 

 

[a] Convenient Dispute Handling & Shortest Possible Settleback 

For any merchant customer’s convenience and fast dispute settlement is a major part of that. Tracking what happened-when-for which transactions without an automated system in place makes manual dispute handling messy as it requires generating settlement reports by manual parsing. So when it comes to dispute handling it’s important to have a pre-built log in place to store details of every transaction and later if the dispute happens you can simply ask the user to provide a few details like :

1. Date of transaction
2. Amount transacted
3. Transaction ID 

And map the details with the log to quickly solve the issue.

[b] Recurring Payment Support 

If you do a thorough market research, you’ll find out there are a huge number of grievances around recurring payment support. So make sure you pre-set the billing cycles and frequencies for your offerings. Also, it’s a great idea to keep your customer's e-card details in your portal so when they return, you get their payment process a few clicks’ affair with partial to complete auto data population. BinaryFolks has helped esteemed enterprises automate their recurring payment and timely invoicing with a tokenized approach, dismissing any such chances of user grievance. 

 

[c] Ease Of Implementation 

One of the foremost priorities in website payment gateway remains the ease of integration. So make an integration plan that’s on-point and requires least efforts from the team to be familiar with it. Basically as a merchant you should be able to operate without having to go through numerous steps or complex modification requirements. Also multi-framework support is a must for the most effective integration.

 

[d] Intuitive UI  

There’s no better customer magnet than a smooth checkout and that’s what you can ace with an intuitive UI making online payment completion a cakewalk. All you need is a well designed "pay page" to redirect their customers for ad hoc payment processing (and competitors’ cons to turn into your pros!).

 

[e] Detailed Payment Analytics & Custom Reports 

Remember when analytics or reports would take a group of employees leaving every other task just to find required stats and patterns? If it’s a familiar thing..this point is for you. Here’s what to keep in mind while planning the analytics & custom report generating modules in order to integrate payment gateway : 

1. Identify conversion rates in terms of currencies, pricing, and demographics so that you can alter your market strategy most effectively
2. Track payment data at the in and outflow for simplified sales understanding
3. Generating cleanse reports to monitor frauds, common factors leading to refunds or chargebacks hampering your revenue growth. 

 

How Much Does Payment Gateway Integration Cost ?

Payment gateway integration does not have a fixed price tag as it depends on several factors but primarily on :

1. The payment gateway of your choice
2. The timeline you are looking at
3. Security standards you settle for

However, payment gateway integration can cost you somewhere between USD 3K to USD 15K.

 

Perks Of Payment Gateway Integration With BinaryFolks

 

Conclusion

Integrated payment gateway sure turns the growth graph upwards if you keep this guide handy but the only condition there is a complete no brainer - handing over the pro plan to the ‘right’ team of developers! 

Why team when you can go for freelancers? Looks like you haven’t checked out our ‘How to find developers?’ guide yet..we’ve made our point there. 
Ready to get - set - integrate?

 

Let’s Discuss Payment Gateway Integration !