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Any business that wants to sell its products and services on the Internet
needs a payment gateway. This is a software solution that, in semi-automatic mode, removes funds from the buyer's account and transfers them to the seller’s account. The availability, speed, security, convenience and price
of remittances depend on who provides such a service. This means that every online retailer seeking to increase sales should carefully consider which payment gateway to choose and how to integrate the option they like into their website.
From our article you will learn:
- How to choose the payment gateway integration method.
- How to choose a specific payment service provider company.
- How to integrate a payment gateway into your website.
Choose the integration method
Hosting Payment Gateway
Redirects customers from the checkout page on your site to the web-based payment
processor platform. Simple and convenient, but it requires additional actions from customers, which worsens the user experience. PayPal is a prime example of such a solution. If you plan to use hosting payment gateways, first find out what services your potential customers are familiar with, for example, using a social media survey
The scheme of the hosting payment gateway
Hosting gateway integration requires significantly less time and resources - 1-3 days. In addition, when using an external payment gateway, payment processing and storage of business data of users are performed by the service provider, therefore, the seller does not have to follow the PCI DSS security rules, which greatly simplifies the life of the online business.
Redirecting buyers to third-party resources reduces conversion, especially if on the external page they need to trust an unfamiliar service. If you connect to a well-known payment service provider, when changing partners, there may be problems with maintaining the customer base. So, PayPal, when the relationship is broken, keeps the data of users through their services.
Typically, integration guidelines can be found on vendor sites. As an example, you can read the PayPal Express
code and integrate it into the site code. In this way, you place a button that activates PayPal's REST API and payment stream to process the transaction.
Suitable for a small local online business,
which is more convenient to use external payment services. It is easier and cheaper.
Integrated Payment Gateway
Unlike hosted payment gateways
, where shoppers leave the checkout page, integrated solutions connect to your site via the payment gateway API. By choosing this option, you will be responsible for the payment process and compliance with various security requirements. You will also need to open a trading account, since it will be the payments from debit and credit cards of buyers to it.
An example of working with an integrated payment gateway
The store retains full control over transactions and customer data. This allows you to create your own customer base, which will always be with you. In addition, integrated solutions provide an opportunity to customize payment processes willingly and adapt them to the needs of a particular business, site and target audience.
To use an integrated gateway, your site must be compliant with the PCI DSS security rules, since all customers' credit card information will be stored on your servers. In addition, usually with this approach, all the costs of maintaining the infrastructure of the payment system and the associated costs are falling on your shoulders.
The payment gateway is connected to the site via an API, therefore, you will need a development team - own or outsourced
. Most providers of non-hosting payment gateways have well-described integration guides, API links, or partner development portals.
Suitable for medium and large companies
that rely on improved user experience and the development of their own brand.
Choosing a supplier company
# 1. Modern or classic
Types of payment gateways
The main difference between modern and classical payment gateways is the presence of a trading account with the latter. Trading account is a commercial bank account with two encumbrances:
- firstly, the seller cannot directly manage the funds in the account;
- secondly, payments received on such an account are deposited and temporarily withheld while the bank processes them, which takes several days. After that, the money goes to the usual commercial account of the seller.
The classic payment gateway is suitable for medium and large enterprises working with a large number of daily online transactions, as they can work directly with banks, which reduces transaction fees.
However, this approach is quite burdensome at first: you need to submit an application, pay for and set up a dedicated trading account, and also need technical knowledge
to integrate the account through the API. Examples of classic gateways are Authorize.Net, 2Checkout and WorldPay.
Modern payment gateways
, such as PayPal and Stripe, combined the trading account and gateway into a single service, so it is easier to open and configure them. All you need is a valid bank account for accepting payments.
But the transaction commissions for these gateways are higher. This approach is usually used by small companies that want to save on start.
# 2. Gateway security
When choosing a payment service provider, pay attention to the following points:
- SSL encryption and digital signature. Protection against hackers.
- PCI DSS. Personal data protection and anti-fraud.
- Check CVV2. To complete a transaction, the cardholder must provide a credit card number and a three-digit security code printed on the back of the card.
- Dynamic IP addresses. Denies access to the service if the request did not come from your IP address. New IP addresses are connected via additional verification methods: SMS, call to phone, confirmation by email, etc.
# 3. Encryption Standards
The payment solution
provider handles the confidential payment information of your customers, and if there is even a small breach of confidentiality, it may badly affect the reputation of your company. Therefore, check how vendors encrypt this data. For example, the payment gateway EBizCharge tones the data and completely removes the card data. Other companies use seamless integration with other platforms, which significantly reduces the likelihood of human error and provides greater visibility of reports.
# 4. Available payment methods
According to WorldPay's global payments report for 2018
, about 24% of people were forced to abandon purchases (goods put in the shopping cart) due to the fact that among the payment methods there was no option they needed. The same report says that more and more people prefer to use not the usual credit cards, but payment methods such as Google Wallet, Google Wallet or Visa Checkout. Therefore, when choosing a trading gateway, check which payment methods
your customers prefer to use and look for suppliers that cover these requests.
Another important aspect is multicurrency support.
This is important for companies that conduct international activities and want their customers to pay in the currency convenient for them. Usually payment gateway providers provide such a service for a fee: a fixed monthly fee or additional fees for trans-currency transactions.
# 5. Legal compatibility
Depending on your jurisdiction and web platform code
, many payment gateways may not be available. For example, due to the fact that the payment service has no right to work in your country due to the absence of a corresponding license or sanctions. In addition, many payment services prefer not to work with a business that is associated with gambling
, erotica and porn, narcotic substances and the arms trade.
# 6. Transaction processing speed
If you want to improve your user experience
and execute transactions
as quickly as possible, you will need a processor capable of processing payments within seconds, rather than several days. Here is a list of the fastest processors according to Spreedly
data for the last three months (March-May 2019):
# 7. Reporting features
Depending on your business, you may need a payment solution
with the ability to create detailed reports. For example, to study all operations for a certain period of the entire business or individual product (department). Or to learn statistics on chargebacks or commission costs. Gateways offer different formats and types of reporting
, and to make the right choice, this issue needs to be studied in advance.
# 8. Fraud Detection
Even when choosing a payment gateway,
you must make sure that it has security features designed to protect against fraud and counteract such. The minimum program - the presence of PCI DSS. This is a standard of information security, which is mandatory for all organizations working with credit cards. The standard was introduced in 2004 and has several gradations - from the simplest "1.0" to the most advanced to date "3.2.1".
In cases where counteraction to fraud is of paramount importance to you, you should pay attention to suppliers such as CyberSource
, who specialize in such moments. Here are examples of the detection tools they use:
- Address Verification Service (AVS) verification.
- Tracking the number of authentication attempts.
- Use of biometric data.
- Verify shipping address.
- ID verification.
- Identity check.
# 9. User experience
should be convenient for customers and your staff. And this concerns not only the design and usability of the interface
, but also such things as support service, text and video instructions, the availability of a convenient feedback form and the like. In addition, it is also important that the payment function works normally on mobile platforms
# 10. Costs and fees
It is very important that when choosing a financial partner you correctly calculate all the expenses that will be required to integrate the payment service and pay for its services. Usually, suppliers charge several fees at once.
Here are some of them:
- Account Registration / Connection Fee.
- Set up of the payment gateway.
- Processing normal and currency transactions.
- Fee for connecting a special payment method.
- Refund fee.
- Monthly fee.
Payment services decide how to monetize their services. For example, Stripe has no connection fees or monthly fees. The company charges 2.9% of the amount of each transaction + $ 0.30. This means that if you bought a product for $ 100, you will end up with:
96.80 dollars = 100 - (100 × 2.9%) - 0.30
You can find tariff plans for Authorize.net
, Payflow Pro
and Payments Pro
via these links. There you will also find answers to frequently asked questions about additional fees. But always keep in mind that you may have missed some information or did not have time to add it to the site, therefore it is better to contact the gateway of interest and communicate directly with its representatives.
Comparing popular payment gateways
Payment Gateway Integration Example
The easiest way to integrate a payment gateway into your website is with a PayPal button. Here is a step by step guide on how to add it to your site.
1. Register a new businessman account with PayPal or sign in with an existing account.
2. Mouse over the “Tools” section and select “All Tool” in the pop-up menu.
3. In the new window, find the “PayPal Buttons” icon and click on it.
4. A window will open with a list of PayPal buttons. If you are using this service for the first time, then click “Create new buttons”. If not, select the desired button from the previously created.
5. In the new window, you can choose the type of button, the name and topic to which you link it, as well as the cost of the product or service. Slightly below the button are appearance settings and several additional options. All this is simple and does not require any additional instructions. At the end click on the bottom of the screen on the "Step 2".
6. The second step is optional. It gives you the opportunity to configure several functions responsible for the security of the transaction.
7. The third step is also optional. It allows you to give special instructions to the buyer. To continue, click “Create new buttons”.