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Over the years, the unexpected growth of e-commerce has paved the way for the rise of payment gateway with seamless secure payment options accessible to prospects and customers. The growth of the e-commerce industry is powered by the innovation and integration of software solutions such as payment gateway. Today, trends indicate that the eCommerce industry has hit over $4.2 billion because of the innovation of payment systems.
Integrated payment solutions have established the responsibility on eCommerce business owners to match their business strategy with the changing technology systems and provide better customer satisfaction for their customers. This is why choosing a payment gateway is essential for every business that wants to beat its competition.
No matter the kind of business and industry you are running and working in, you will need an integrated payment solution to boost your growth and performance. In this article, you will learn what a payment gateway is, the types of payment integration, popular payment gateway providers, and the steps to get a customized one for your business.
What is a payment gateway?
A payment gateway is an integrated payment processing and technology that captures and transfers payment details from a prospect or customer to an acquirer and then accepts the payment or declines it back to the customer’s account. A payment gateway also validates a customer’s card, ensures money is in the customer’s bank account, and ensures a merchant gets paid.
A payment gateway system is an interface between an acquirer and a merchant website. A payment gateway is software that encrypts credit card details and ensures information is passed from a customer to an acquiring bank through a merchant website. In other words, a payment gateway is an invisible middleman between a merchant and your customer, ensuring all transactions are carried out securely.
The key players in the payments gateway
After fully understanding what a payment gateway is, it is also necessary to identify the key players in a payment gateway solution. When a prospect or customer clicks the “Pay” option on your website, these are key players that work in the process:
The issuing bank
One of the key players of a payment gateway is the customer’s bank that issues the debit or credit hard on behalf of card schemes such as Mastercard and Visa.
The Merchant
In this case, you are a merchant who offers a product or service to customers.
The customer
The customer is your customer and is also called a cardholder. They are the people who want to access your products or services, and in the process, they initiate transactions.
The acquirer
The acquirer is also known as the acquiring bank. This is the financial institution that maintains your bank account. The financial institution is the one that passes the transactions to the issuing bank for you to receive payment.
Payment gateway integration
Whether you have an event management store, an online store, or any website that involves customers or prospects making online transactions, you will definitely need an integrated payment solution to make things easy for you, especially if you are selling an international product or service on your website. In most cases, when people hear about a payment gateway, they think it is a service like PayPal, but that’s not true. PayPal is not a payment gateway but a payment gateway service provider.
A payment gateway is a payment option on your website where prospects or customers can easily pay for your service. It is like a cashier desk, but instead of being physically present to make the payment, your website automatically does this for you even when you are sleeping.
However, since integrated payment solutions handle all transactions on your website, you will be glad to see this happen consistently. So here below are 4 types of payment gateway integration:
Simple Checkout Method (Offsite Payment)
The simplest method to integrate a payment gateway solution into your website is the simple checkout method. In this case, the payment gateway software is integrated as an external payment solution. So when a customer clicks on “Pay” on your website, the customer will be directed to a payment gateway provider such as PayPal or PayU to make a secure payment transaction.
Server Integration Method (Onsite Payment)
Server Integration Method, also known as SIM, is another method of payment gateway integration on your website. In this method, you have the option to handle all transactions on your website, even though your chosen payment gateway service provider will handle the real payment. What happens here is that all forms will be displayed on your website. While the service provider handles the payment data collection, submission of data, and customer response in secure transactions, customers won’t be aware of any of this. This even allows you to style the look of the payment form and the receipt.
Direct Post Method (Transparent Redirect)
Another amazing method of payment method integration is the “Direct Post” method. In this method, the systems that accept your customer card and payment details are served from your website service, and the details are forwarded to the payment gateway, where the actual transaction is handled.
Advanced Integration Method
Advanced integration is the greatest payment gateway integration method. This method, also known as AIM, allows you as a merchant to host your payment form and send transactions to a payment gateway provider through an end-to-end SSL connection on your website. Shopping cart developers mostly use this integration method because it gives you full control of your customers’ transaction experience.
Choosing a payment gateway provider
In recent years, integrated payment processing has become popular. So instead of going around different payment processing platforms, they allow you to take different payments simultaneously. Payment gateway makes it easy for customers to buy and makes work easier for you as a business owner. As companies and businesses saw the benefit of payment gateway, the competition also grew. But here are some practical tips that will help you in choosing the best payment gateway provider for your business:
Check the pricing.
Checking the price of a payment gateway provider before choosing is the first factor to consider. For all payment gateway providers, the price will differ and depend on different factors. Some of these factors are your business models, the amount of money you receive daily or monthly, and the types of payment you accept. So before you choose a payment gateway provider, ensure you know the amount of money you will be making daily or work on it before knowing the payment gateway fee.
In most cases, the payment gateway will charge you an extra fee if you fail to be in compliance with their rules by not meeting your daily or monthly quota. This makes it essential for you to think carefully before choosing any payment gateway provider.
Research device compatibility.
Depending on what your business offers and who you offer them to, you will have different customers using different devices to “Pay” for your product or service. While some payment gateway works well on all devices, others get stuck on some. So you must check if a payment gateway works on devices as this will help you to make the right choice.
Ensure integrations are smooth and easy.
No payment gateway works on its own. So, you must find out if your chosen payment gateway will work well on your website and for your business. For example, some gateway works well on website builds with WordPress, while some only work on customized websites.
Consider a recurring billing option.
One of the ways for payment gateway to be used is in software-as-a-service. The SaaS model works by relying on recurring billing, which is an important aspect of a transaction. In this vice, your customer gets billed the same monthly or yearly for a subscription service. However, choosing a good gateway makes it easy to collect monthly payments and solve many issues for you; one of them is helping you handle failed payments.
Find excellent customer support.
A good payment gateway provider will use a thousand dollars and commit their time to go through their customers’ accounts daily because an hour of downtime from your provider could damage your business by making customers disappear
And if something goes wrong, your chosen gateway customer support needs to be available with alternative options. However, choosing the wrong payment gateway could damage your business reputation and cause you to lose a lot of money. So while choosing a payment gateway, take your time to review your needs and choose a gateway that makes a great partner with your business.
Popular payment gateway providers
The number of integrated payment service providers in today’s world are countless. So to help you choose the best, we’ve chosen the popular payment gateway providers.
kevin.
kevin. is a payment infrastructure that bypasses card networks, letting consumers make fast, simple and secure payments directly from their bank accounts. Being live in 27 European markets kevin. is an accessible payment method to more than 350 million consumers.
Skrill
Skrill is one of the most popular and most used payment gateways worldwide. Business owners mostly use it for payment because it understands modern payment demands and money transfers. Skrill started in London in 2001 by Benjamin Kullmannhich and Daniel Klein and was the first business to get an e-money license. But today, Skrill has big companies worldwide as their customers using their payment solutions in their businesses.
Skrill has been recognized and received several awards from big companies such as B2B EGB and Deloitte Technology Fast 50. Skrill is not just one of the most successful United Kingdom payment gateways that support all countries worldwide and enables customers to purchase products or services conveniently.
Stripe
Stripe is another popular integrated payment service provider that helps business owners to manage and accept online payments anywhere in the world. Stripe provides a payment solution and offers features like embeddable checkout, UI toolkit, and consolidated reports. It is a payment gateway that ensures you have a smooth moment of funds and connects you with interfaces that enable you to prevent frauds, drive global sales and manage revenue. Stripe also provides an API that helps in integrating with your business.
PayPal
PayPal is a popular payment gateway designed to help business owners send and receive payments without providing financial information. PayPal is one of the gateways that allow you to send and receive payment anywhere in the world while you receive payment notifications in your email instantly. PayPal also makes it easy for you to buy or sell using any device on a website. Today, PayPal operates in over 203 countries worldwide and supports customers using card schemes like American Express, Mastercard, and Visa.
2Checkout
2Checkout is another popular payment gateway that allows business owners to send and receive online payments from customers. 2Checkout has many features that help merchants and customers to make the payment process easy. It is a United States-based payment gateway that supports different payment methods.
2Checkout is a reliable and secure gateway with more than 50,000 merchants’ websites using them. 2Checkout supports 15 languages, 87 countries, and 8 payment methods.
Custom payment gateway
Today, we have many payment gateway providers that offer the best customer experience and support to customers, and there are different integration methods. However, if you are running a large company, you may be interested in a unique payment gateway to be free from all hassles. Here below are the practice steps to follow to build a payment gateway:
Set up infrastructure
The first thing you need to do in building a custom payment gateway for your business is to prepare the server on your own. This gives you full power, but you must undergo an annual PCI audit and maintain a data center
Integrate with a payment processor
You need to integrate with a payment processor to set up a payment gateway. A payment processor is a financial institution that helps businesses process online payments. Either you use a bank or a card scheme such as American Express, Mastercard, or Visa. But before you can integrate with a payment processor, you must obtain their API document and use it by following their instructions. This is essential because they will use it to send one-time and recurring payments.
Develop CRM
Developing CRM is essential because CRM is a powerful tool that helps you manage transactions and keep customers’ data. It will also allow you to do smart forecasting and avoid human errors.
Apply for PCI
Applying to the Payment Card Industry is an essential and mandatory step if you want a customized payment gateway. The purpose of the PCI data security standard is to help reduce fraud by setting rules for the software that works with debit and credit cards. And to get approval, you need a PCI audit, and it is an essential thing you should do every year.
Conclusion
You may find all these payment gateways information overwhelming, but we do this because we understand that the right payment gateway is an important decision for your business. However, as a business owner, if you leverage payment gateways, you will be able to deliver the best online experiences and support that will be beneficial to you and your customers.
