Accept Payments Online: A Complete Guide to Payment Gateway Integration

Online shopping is booming! People are expected to spend a ton of money online, like $7.4 trillion, by 2025!

That means there’s a huge opportunity for businesses to sell to new people. But how do you get paid for all those sales?  That's where payment gateways come in.

Think of a payment gateway as a secure checkpoint for online payments. It lets you easily accept credit cards, debit cards, and sometimes even other options like digital wallets from your customers.

This guide will explain everything about payment gateway integration, from what payment gateways are and how they work to how you can add one to your online e-commerce store.

What is a Payment Gateway?

A payment gateway is an online service that enables businesses and individuals to receive payments from clients via their websites or best upi app 2024. It serves as an intermediary between a merchant and the financial institution that processes the payment.

A payment gateway is not only a physical card reader or point-of-sale terminal used in a typical brick-and-mortar store but also a payment processing terminal that is incorporated into an online store.

In simple terms, a payment gateway integration allows merchants to accept electronic payments from online shoppers such as credit or debit cards for the purchase of products or services.

How does the Payment Gateway Work?

Now that you understand what a payment gateway is, let’s move forward and discuss how it actually works. Below we’ll break down how payment gateways work step-by-step:

• A consumer makes a purchase by entering their card information on the payment page of a website or mobile app, which usually includes the cardholder's name, card number, card expiration date, and card verification value (CVV) code. This information is then securely sent to the payment gateway, depending on the merchant's integration type (hosted payment page, server-to-server integration, or client-side encryption), This information is then securely sent to the payment gateway, depending on the merchant's integration type (hosted payment page, server-to-server integration, or client-side encryption). When considering secure transactions, many users in India prefer the development of best UPI app in India 2024 for added convenience and security.
  
  
• Before sending the card data to the acquirer, the payment gateway for the website encrypts it and examines it for fraud.
  
  
• The acquirer securely sends the information to the card schemes, which conduct additional fraud checks. Following that, the schemes send the payment information to the issuer for authorization.
  
  
• After all necessary fraud screening processes have been done, the issuer authorizes the transaction. It validates transaction information, ensures the cardholder has sufficient funds for the purchase, and confirms the bank account's validity. The issuer will notify the acquirer whether the card schemes have accepted or denied the transaction.
  
  
• The acquirer delivers the message back to the merchant's payment gateway. Depending on the message, the customer will be directed to a payment confirmation page or asked to provide a different payment method.
  
  
• After the payment is approved, the settlement process can begin. The acquirer receives payment from the issuing bank and holds the money in the merchant account. The merchant's agreement with their payment service provider decides when the real settlement will occur.

What is the Difference Between Payment Gateway vs. Payment Processor?

A payment gateway differs from a payment processor, which is a service that distributes credit card information between a customer's bank and the merchant bank, allowing money to be moved.

The payment gateway for business receives payment details such as credit card information and authorizes payments using various payment methods, whereas a payment processor contacts the customer's bank and the merchant account held at the acquirer's bank.

The payment processor serves as a communication mediator.

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Main 3 Types of Payment Gateway Integration

Payment gateway integration serves as a safe bridge between merchants and customers during digital transactions. They manage the flow of sensitive information and ensure that transactions are processed smoothly.

However, the way you integrate a payment gateway with your e-commerce website depends on the specific type of payment gateway you choose. Below, we have three primary types of payment gateways:

Hosted Payment Gateways

Hosted payment gateways are a kind of internet processing service offered by third-party companies. Transactions occur on your website through other gateways.

In a hosted payment gateway, users are required to enter their billing information on the provider's secure payment page. After the payment procedure is done, the customer returns to your website to complete the transaction.

PayPal is a well-known example of a hosted payment gateway. When you make an online purchase with PayPal, you are redirected to a secure PayPal page to confirm your payment.

Once completed, the PayPal payment gateway directs you back to the merchant's website to complete the transaction.

Self-hosted Payment Gateways

Next, self-hosted payment gateways are merchant-hosted payment gateways that give merchants control over the checkout process.

Unlike hosted gateways, clients can submit their payment information directly on the merchant's website.

Then you can encrypt it before sending it to payment processors for authorization. As a result, this form of payment gateway allows you greater flexibility.

Also, retailers can customize the user interface to reflect their brand identity and optimize for a seamless user experience.

Customers use a self-hosted gateway to submit their credit card information directly on your website throughout the checkout process.

After that, your website securely communicates the encrypted data to the payment processor (such as Visa or Mastercard) for authorization. Once accepted, the transaction can be executed without leaving your website.

API-based Payment Gateways

In this type of payment gateway integration, the customer makes a purchase and enters payment information on your e-commerce platform at checkout.

The payment information is securely sent to the gateway using the Application Programming Interface (API).

The information is then validated using the customer's bank account or payment network. If everything is validated, the payment gateway for the website transfers funds to the merchant account.

Later, once your platform has confirmed payment with the gateway, the customer's order can be completed. Stripe is a prominent API-based payment gateway example with developer-friendly features.

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What are the Benefits of Online Payment Gateway Integration

Integrating an e-commerce payment gateway into your online business can offer several advantages, here are some of them:

Secure Transactions

The payment gateway for businesses allows secure transactions, protecting against any type of fraud and data breaches.

Customer Trust

A payment gateway offers a sense of security. If the customer recognizes the payment gateway, that's the cherry on top.

It can naturally develop feelings of trust in the brand, encouraging customers to purchase a product or service without fear of data theft or fraud.

International Reach

Payment gateway integration enables retailers to extend their business globally. An international payment gateway can provide a variety of capabilities such as multi-currency transactions, allowing your business to accept foreign payments.

For example, you can accept payments in more than 100 different currencies from around the world. You can get a T+1 settlement in Indian rupees.

This means you won't have to worry about currency conversions or exchange rates; your payment gateway will handle them automatically and in real-time.

Faster Transactions

Payment gateways enable payments to be authorized and settled quickly. This can significantly increase conversions and lower cart abandonment rates.

Multiple Payment Options

Offering a variety of payment methods such as credit cards, debit cards, net banking, UPI, and digital wallets gives users an extensive range of options.

Ease of Accessibility

Many payment gateway solutions provide powerful dashboards that let you monitor and control the entire process.

You can acquire real-time data and resolve any hindrance quickly. For example, if you see that a specific product is selling quickly, you can begin the restocking process immediately to ensure that it does not run out.

You can also find inefficiencies in your operational processes. For example, if you notice that people are abandoning their carts as they reach a specific product, it may be time to improve that product page.

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How to Integrate Payment Gateway In Your App/Website

As explained earlier, payment gateway integration is critical for online businesses because it facilitates secure transactions and improves the purchasing experience for customers.

It is evident that as a business owner with an online e-commerce platform, you are possibly interested in integrating a payment gateway into your e-commerce app or website.

To help you, here is a step-by-step process of payment gateway system integration:

Step 1. Planning

If you’re serious about implementing a payment gateway in your website or mobile application, you must create a payment gateway by identifying your requirements. Ask yourself:

• Where will you sell? Are you selling worldwide, or just in a few countries?
  
  
• What currencies will you accept? Do you only need your local currency, or will you accept others?
  
  
• How many sales do you expect? This will help determine the features you need.

This will help you choose a suitable e-commerce payment gateway or develop a P2P payment application.

Step 2. Integration Design

Once you've determined your business requirements, concentrate on creating the payment procedure. Make sure to give a simple customer journey from shopping cart to payment confirmation.

The payment gateway design on your e-commerce app development should allow for a smooth checkout experience, while the backend handles data processing and gateway connection.

Step 3. Integration Implementation

After deciding on a payment system, developers integrate the website using the available API and configure the backend for handling transactions. It covers managing payment requests and responses.

Front-end developers apply UI/UX designs for payment sites to ensure functionality and usability.

Step 4. Testing and Deployment

Before launching the gateway, developers test transactions in the sandbox environment to ensure that the payment gateway is working properly.

User testing helps in identifying and resolving difficulties. After resolving all issues, the system moves from the sandbox to live operation.

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Step 5. Ongoing Maintenance

Continuous upgrades and monitoring of payment gateway integration are required to ensure its efficiency and durability.

Regular maintenance ensures that the system keeps up to date on the latest technology and security measures, protecting against vulnerabilities.

Step 6. Documentation

After integration, full documentation of the process is critical. It covers information ranging from API specifics to maintenance methods, assuring continuity and adaptation for future requirements.

When done correctly, the complex aspect of payment gateway integration can greatly benefit an e-commerce business.

However, it’s always recommended to choose a reputable web development and mobile app development company with a devoted, experienced team to provide customers with a safe and flawless experience.

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Payment Gateway Security Features

The following are key security features of an online payment gateway:

Fraud Prevention

Secure payment gateways use a variety of advanced fraud detection tools that analyze transaction patterns and behaviors in real-time. This means that even if there is fraud, the system will detect and prevent it.

Tokenization

Card details such as the card number and expiration date are not transferred directly through the system when using Card Tokenisation. Instead, they are first turned into tokens, ensuring that even if a data breach occurs, the information is not compromised.

PCI DSS Wallet

These wallets adhere to PCI DSS standards to ensure that cardholder data is securely maintained for all recurring transactions.

White Label Wallet

This functionality of the payment system is best suited for mobile wallets. Most payment gateways for websites provide white-label solutions for all payment types via mobile wallets. This ensures the transaction's security and convenience.

3DS Authentication

The term 3DS, or 3D Secure, refers to an additional layer of security before the transaction is completed. In most cases, this is accomplished by sending an OTP to the customer's mobile or email address.

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Popular Payment Gateway Providers

If you plan to not make a payment gateway from scratch, you must select the best payment gateway provider from a wide range of options.

Frictionless and secure payments reduce customer frustration and give retailers peace of mind.  Let us now look at the top contenders who are setting the standard for safe payment gateway integration in the digital world.

PayPal

PayPal is a popular online payment processor. It has been a leader in the business since its inception in 1998. Moreover, customers can pay without giving financial information to the acquirer.

Customers can simply log in to their PayPal accounts to make payments. PayPal payments provide retailers with a range of features, including:

• Accepting payments from clients all across the world.
  
  
• Sending and receiving invoices
  
  
• Manage subscriptions.
  
  
• Creating personalized buttons for your website

Business owners can easily incorporate PayPal into a variety of eCommerce platforms. Furthermore, it offers purchase protection services to ensure safe transactions. In addition to these benefits, many customers also look for options that offer rewards, such as the best UPI app with cashback 2024, for added value in their transactions.

Stripe

Stripe, a prominent white-label payment gateway, was formally established in 2011. It is noted for its ease of use and robust developer tools, making it an effective platform for online payment processing.

The payment gateway allows businesses to take payments via various methods such as ACH, credit, and debit cards. Stripe, the payment gateway service, also provides businesses with a range of capabilities, including:

• Supports recurring billing and fraud prevention
  
  
• encryption and tokenization
  
  
• Invoicing and subscription management

Moreover, it provides improved security to protect critical payment information. Stripe's real-time reporting and analytics tool enables businesses to conveniently track transaction data. For businesses in India, integrating with the top UPI app in India 2024 can further enhance their payment options and provide a seamless experience for customers.

Apple Pay

Apple's payment gateway integration is geared at a mobile payment framework, allowing retailers to accept payments with Face ID and Touch ID.

It focuses mostly on users who want to use an electronic wallet to manage their payments.

Many other payment channels, like PayPal, support Apple Pay payments. With these services, shops may take payments from roughly 1 billion iPhone users globally, more than half of whom use Apple Pay is the most secure upi app.

Authorize.Net

Founded in 1996, Authorize.Net is a payment gateway that is popular with businesses of all sizes.

The Authorize.Net payment gateway provider is PCI compliant and provides high-tech security to guarantee risk-free transactions. In addition, it has a variety of features, including:

• Accepting credit card, debit card, and electronic check payments
  
  
• Recurring billing
  
  
• Seamless checkout
  
  
• Fraud prevention
  
  
• Reporting

Moreover, merchants need to have a separate Authorize.net account, which charges a one-time fee during the setup process.

Square

Square is a payment processor that is well-known for its POS solutions. It also provides a secure payment gateway, allowing retailers to take payments digitally.

The following are some of the most common features of the Square payment gateway provider:

• Contactless cards and devices
  
  
• Manually keyed in cards
  
  
• Flexible for all businesses.
  
  
• Digital Invoices
  
  
• Accept payments through your website, app, or existing software.

Moreover, it gives businesses integrated payment solutions via eCommerce payment processing and mobile vehicle scanners.

It is an excellent choice for businesses that require an easy-to-use payment system with clear pricing.

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How Arramton Infotech Can Integrate Secure Payment Gateway in Your Mobile App/Website

Arramton Infotech is one of the leading companies in developing a robust and successful custom payment gateway.

Our developers focus on understanding your unique business requirements and project scope before they start the development part.

We have years of experience developing fintech mobile applications using the latest tools and technologies and seamlessly handling complex payment gateway integrations.

We focus on creating user-friendly and secure solutions that guarantee a smooth payment experience for your customers.

So, if you’ve decided to accept online payments for your products and services from your customers, it’s time you add a payment gateway to your e-commerce platform.

Contact us today, to learn more about how we can build a secure payment gateway system for your business!

Frequently Asked Questions

Q. What is a payment gateway?

Ans. A payment gateway is like a secure checkpoint for online payments. It allows you to accept credit cards, debit cards, and sometimes even digital wallets from your customers.

Q. How does a payment gateway work?

Ans. A payment gateway works like a safe messenger taking your customer's payment info, encrypting it, and checking for fraud before asking their bank for approval. Once approved, the money gets moved securely.

Q. What are some payment gateway examples?

Ans. Popular payment gateway examples include PayPal, Stripe, Square, and Authorize.net.

Q. How to set up an online payment gateway?

Ans. Setting up an online payment gateway service is usually straightforward. The payment gateway provider will guide you through the steps, which often involve creating an account and following their integration instructions.