Businesses have a lot of choices when it comes to payment gateway integration. The market
is flooded with multiple service providers which sometimes makes it difficult to choose one
due to the varying degrees of services they offer.
Moreover, sometimes the process of integration is complicated when with some providers,
and easier with others. But, the sheer level of differences in service quality is what defines the gateways' overall performance.
In this article, we will look at different types of payment gateway systems to help you make a
clear distinction between the differences each share, along with the advantages they offer
over each other.
Hosted Payment Gateways
In a hosted payment gateway, customers are redirected to a secure payment page hosted by a
third party like PayPal, Stripe, etc. The payment process takes place completely outside the
purview of the merchant’s website which makes controlling the user experience not possible
as the merchant relies on the host to give the customers an overall great checkout experience.
Once on the page, payment details are collected by the service provider and once the
transaction has been completed, the customer is then redirected back to the merchant site. The
good part about setting this up for your app is that process is very simple and there are no
elaborate steps involved in its integration.
Moreover, all security compliance requirements are taken care of by the service provider
themselves so that the merchant doesn’t need to bother with PCI compliance or any other
Self-Hosted Payment Gateways
If you would like to have complete ownership over the user experience, then a self-hosted
payment gateway integration is the ideal way to go. Once set up, customers are never
redirected to a third-party site and everything from shopping to the payment process takes
place on the merchant’s site itself.
However, merchants themselves are responsible for maintaining the infrastructure to ensure
zero payment failures, and also for the security of a customer’s financial information. That
means that all requisite formalities related to getting the appropriate security compliances rest
with the merchant.
API Or Non-Hosted Payment Gateway Integration
Going for an API or non-hosted payment gateway integration lets merchants collect payment
information and process payments on the checkout page itself. This is made possible by using
APIs. This is a good option for businesses looking for complete customization of the payment
page and the overall user experience.
This is a one-page checkout experience ideal for businesses wanting to give their customers
the best possible online buying experience. However, just like with the self-hosted payment
gateways, here too, the merchants are responsible for setting up things such as PCI-DSS,
getting an SSL certificate, and securing customers’ financial information from falling into the
hands of hackers and online fraudsters.
Now that you are aware of the types of payment gateways available for integration, let’s look
at a few benefits of having one integrated into your online store.
● Accept All kinds of Digital Payment Options: This is the prime focus of payment gateway
systems, and that is to let merchants accept all kinds of digital payment options. Right from
credit/debit cards, and net banking, to newer options such as UPI, digital wallets, and through
social media apps such as WhatsApp, Facebook, Instagram, etc.
● Sell internationally: When merchants are able to accept all kinds of currencies, they can
easily expand their business beyond their home base. This helps a business scale much better
in terms of acquiring new customers and generating more revenue.
● Offer Customized Deals: Paper trails are almost impossible to track; digital payments are
not. Going through the dashboard helps merchants figure out repeat customers and also
allows them to build customized deals and offers resulting in better customer retention.
● Recurring Billing: Businesses that are into selling subscriptions will find a payment gateway
system to be a gamechanger since it allows a customer to set up payment information once,
and the money gets deducted at a set time as per the subscription plan. That means no
repetitive notifications are required to remind the customer to pay the fee. This also allows for
better customer retention since manual payments are complex to collect as customers might
not remember the due dates resulting in unknowingly unsubscribing from the services.
Digital payment in India is all the rage these days, and businesses need to do everything in
their power to leverage this trend in customer behavior as much as possible. Now that we
have covered the types of payment gateways and their benefits, it’s time to take your business
to the next level!