Payment gateway for website
What is a payment gateway for a website?
A payment gateway for a website is a special technical solution that enables the website owner to accept online payments from customers.
Regardless of the type of website, e.g. blog, online store, landing page for a product or service, or any other, a payment gateway is a tool you can use to accept online payments conveniently and securely. It is needed primarily to enable credit or debit card payments online on your website. If you're not planning on working with card processing and choose crypto instead, you don't necessarily need an online payment gateway solution.
Payment gateways use encryption technology to protect sensitive customer payment information, such as credit card numbers and banking details. This encryption scrambles information as it is being sent from the customer to the payment provider, thus providing an extra layer of security for both the customer and the merchant.
Payment gateways also authenticate transactions by verifying customers' information in real-time and preventing fraudulent online payments.
Finally, advanced payment gateways provide merchants with access to detailed reporting of payment data. It helps to understand their performance and their customers' shopping behaviour better. Overall, payment gateways for websites offer an essential service to businesses by ensuring that all online payments are secure and reliable.
How does a payment gateway work?
As we've just found out, a website payment gateway service is needed primarily to process bank card payments online. It happens as follows:
- A customer visits your website and initiates an online transaction by clicking "Pay", "Buy", "Purchase", or any other button you have on your website initiating the payment process.
- Your website displays a payment page, either custom-made or provided to you by your payment service provider.
- Customers enter their credit card data on the payment page to make a payment.
- Your online payment gateway encrypts bank card details and securely forwards the information to the payment processor via an SSL connection.
- The processor contacts the card network, whose brand logo is printed on the customer's bank card.
- The card network sends an authorisation request to the card-issuing bank. In its turn, the bank replies with a code containing the transaction status.
- The payment processor forwards the response code containing the approval or decline of the transaction to your acquiring bank through a payment gateway.
- The gateway sends it to your website, displaying a success or failure message to the customer.
Luckily, it all happens seamlessly for you and your customer and takes just a few seconds.
How to choose a payment gateway for a website?
There are three basic steps in choosing a payment gateway for a website. The first is about understanding your expectations, the second is about understanding the subject, and the last one is about the actual parameters to look for in a gateway. Let's learn about them in greater detail.
Clarify your business needs and requirements
The kind of website you have affects your payment needs largely.
For example, suppose your website is in the e-commerce field. In that case, you'll need a number of payment options in addition to bank card processing to improve the customer payment experience and minimise shopping cart abandonment rates. If your website is an online casino, it's worth accepting transactions in crypto. If you have a charity website, you should be able to accept donations of various amounts smoothly for the convenience of philanthropists.
Take your business specifics into account to know exactly what you need your payment partner to help you with.
We highly recommend calculating your budget for a payment gateway provider and thinking carefully about all the online payment processing services and features you may need.
Decide on the gateway type
There are two types of payment gateways as per the integration process:
- Hosted payment gateways. It means a customer gets redirected to your payment partner's platform to input their bank card details. The benefits of this approach are ease of integration and less responsibility for security and sensitive data protection on your side. As for the downturns, these are the fact that you entrust the online payment solution provider with your payment processes and flows entirely and that sometimes hosted gateways are relatively slow.
- Integrated, or non-hosted payment gateways. As opposed to the first option, in this case, the customer inputs the data on your website without any redirection, and thus you're primarily responsible for security. Moreover, sometimes you have to work on your website's architecture to use some of the features the gateway supports.
Explore the options
After completing the first steps, you now have a decent foundation to start exploring the market. It's important to compare different popular payment gateway providers to find the one that best meets your needs. Some vital factors to consider and questions to ask yourself or the gateways' representatives at this stage are:
- Features. Do I need specific features like recurring billing or international online payments? Does the gateway have all the payment processing capabilities my business model implies? What value-added services does this provider offer?
- Supported payment methods and currencies. What payment methods does the gateway support? Are the methods I need on the list? What are the supported currencies and coverage?
- Security and protection against fraud. Is it PCI DSS compliant, reliable and trustworthy? Do they use encryption, masking and tokenisation to secure payment information?
- Support and customer service. What kind of support do they offer? Is it available 24 hours a day/365 days a year? What are the payment gateway reliability/uptime guarantees? What do current customers say in their reviews? What kind of customer service can I expect from them?
- Customisation and branding options. Can I put my logo on the checkout page and customise it to look how I need it?
- Ease of integration. How easy is it to integrate into our website?
- Settlement time. How fast will I get paid?
- Fees. How much can I afford to pay per transaction and in monthly fees? What are the setup costs, monthly fees, and transaction fees? How often I'll have to pay? Does the price include PCI compliance? Does it offer better rates for high-volume merchants (above $100k/month)?
It is not the complete list; the input you received on the first step will help you tailor and complete it.
Ultimately, there is no one-size-fits-all payment gateway for every e-commerce website. With proper research and a clear understanding of your needs, you can choose the best payment gateway for your business. Make sure to compare different gateways and weigh the pros and cons to determine the most beneficial for your customers and your business.
How much do payment gateways cost?
The costs of your payment setup depend on a range of factors. The most notable is what you're going to use: a payment aggregator/facilitator or your own merchant account and a payment gateway.
If you are processing below $100k annually, your best solution is an aggregated merchant account (a merchant account shared with other businesses). It means using a company like PayPal or Stripe. Even though you'll pay higher percentage fees (such as 2.9% plus $0.30 per transaction), you'll pay lower monthly fees.
If you are processing a lot ($500k+ per year), it's reasonable to get a merchant account and select the right payment gateway. The overall rate you'll end up paying might be around 2.2% and $0.10 per transaction + monthly fees, which vary considerably.
In both cases, we skipped other kinds of fees, like setup fees, merchant account opening fees, etc.
If you're a large company with its own development capabilities and payment expertise, you may develop a payment gateway yourself. The cost to create a minimum viable product (MVP) for a payment gateway starts from $250k.
How to integrate a payment gateway into your website?
We already know about the two basic types of gateways per integration criteria. The process you'll have to pass highly depends on the type you choose, and the only surefire way to know the exact steps is to examine the documentation of the chosen solution provider. However, we can outline the basics of the integration process that are common for most cases. It's essential to ensure the payment gateway can integrate easily with your website or landing page.
First, you sign the agreement with the vendor. Usually, they'll assign you an account manager or support specialist to guide you through the onboarding process and help with documentation and the integration itself.
Then starts the APIs integration process. The provider gives you the security credentials. Namely, the access key and secret key that you can use to integrate those APIs into your local environment to test how everything works. You can use dummy credentials to test the transaction flow from start to finish.
If the testing is successful and everything works as it should, the payment gateway will give you live credentials and a merchant ID. After that, you're free to bring it online and start accepting actual transactions from your customers. You'd be able to customise the checkout page and enable different features, currencies and payment methods.
Remember about security. With a hosted gateway, you need an SSL certificate for your e-commerce website. With a non-hosted one, things are much more complicated, and you'll need to pass the PCI DSS assessment.
As for Corefy, our payment platform clients need to be PCI DSS compliant only if they decide to host a checkout page on their side and work server-to-server. In other cases, there's no need for them to be PCI DSS compliant. Contact us for more information!
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