Different Types of Payment Gateway Integrations

Accepting online payments has never been easier for merchants. With India’s journey towards a cashless economy and new demand for accepting payments with social distancing norms, nearly all businesses have started accepting online payments.

As online shopping and payments are growing in demand, merchants all over the world are trying to make the whole online shopping experience right from marketing and showcasing right to the payments more flexible, convenient, and secure.

The payment gateway integration has been playing a key role in keeping online transactions safe and making customers happy for merchants.

Most of the merchants accepting online payments opt for a payment gateway integration. A payment gateway is a tool that allows merchants to accept online payments.

It acts as a bridge or a link between your(merchant’s) website and a payment provider/card network. It authorizes and processes online payments.

Here is how the payment gateway works:  

Payment gateways can execute the following transaction types:

Choosing a payment gateway that will suit your business needs and gets along with the business infrastructure is indeed a crucial task.

Here is your step-by-step guide towards choosing a suitable payment gateway for your business.

One of the key points while choosing a payment gateway is the type of payment gateway integration.

Choosing payment gateway integration can be tricky  Let’s start learning some basic things about different types of payment gateways.

considering different types of payment gateway integrations and the different functionalities they provide.

These integration types also require different amounts of maintenance and support.

So after choosing a payment gateway that will suit your business model, you have to consider what type of payment integration will help you make the best use of the chosen payment gateway for your business.

Here are the main types of payment gateway integration.

Hosted payment gateway integration or payment in redirection – 

This type of payment gateway integration redirects the customer to a secure payment page.

This payment page is hosted by a payment service provider.

Here payment gateway acts as a third party as the customer needs to leave (redirected) the merchant’s website to complete the payment.

After the buyer is redirected to the payment page, he/she needs to enter the payment details on the page and then proceed to the payment.

After the purchase is done, the customer gets redirected back to the merchant’s website and the checkout process gets completed.

Hosted payment gateways are simple to use and easy to set up and they are customizable.

All the payment processing is taken care of by the payment service provider who provides the hosted payment page.

And as for the security of transactions, the merchant just has to choose a PCI compliant payment service provider.

Most online payment service providers nowadays are PCI compliant and also offer fraud protection.

The only disadvantage of using this type of integration is as this uses an externally hosted page, the merchant cannot control the user experience when it comes to making payments.

Self-hosted payment gateway integration – 

If a merchant needs to control the whole checkout experience along with the payment, self-hosted payment gateway integration is a way to go.

This type of integration allows merchants to accept online payments from customers without leaving the shop site.

This payment gateway integration is customizable and it is good from the customer’s point of view as the whole transaction process gets completed on one page.

But as checkout and payment happen in one place, the problem arises when the system fails.

Though the merchant has more control over the checkout process with self-hosted integration he/she also has to handle more responsibilities as security measures to protect cardholder data fall onto the merchant.

API or non hosted payment gateway integration – 

Non-hosted payment gateway integration allows customers to enter their payment details directly on the checkout page and processes online payments using APIs.

Merchants have full control over the payment page user interface. As there is no redirection involved, non-hosted payment gateway integration gives customers a complete one-page checkout experience.

But again with this type of integration, the responsibility of PCI DSS, SSL certification, and secure customer’s data fail on the merchant.

Different payment gateway integrations work differently. Here are some factors you should consider for choosing a suitable payment gateway type.

  • transition fees associated with a payment gateway
  • sign up process for payment gateway
  • multi-currency support
  • Terms and conditions of payment gateway on what type of services it supports for selling.
  • Check for accepted payment modes, cards, wallets, etc.
  • Check if payment gateway requires customers to fill in lengthy and useless information