If you are running an e-commerce platform or just having an online presence, you need to have something using which your customers can make a payment online. To enable a seamless and convenient payment option which is also secure at the same time, payment gateway is something that you will definitely need to enable your website to accept payments online. While choosing a payment gateway you have to check if the payment gateway supports all your business requirements. It has to be compatible with your existing platform, it should provide multiple payment options, and mainly it should be protected from fraud.
What is a Payment gateway?
Well, payment gateway services are the only way in which you can accept payments through a website or mobile application. They act as a bridge between the transaction that the customer wants to make and the payment processor. The app cannot directly connect to payment processors for security reasons thus payment gateways are required.
The payment gateway can handle the following types of transactions:
Authorization: It is the type of transaction wherein it is checked whether the user has enough amount in his bank account to make the payment for the desired product or service. If he has the amount then the order is placed. Such type of transaction is used for the orders that take time to ship.
Capture: Capture is the actual processing of the funds to the merchants account after the authorization transaction.
Sale: Sale transactions are a combination of Authorization and Capture transactions wherein users card details are first authorized to check if there are enough funds in users account to make payment for the product. After authorization, the funds may or may not get captured. It is used for immediate purchases like subscriptions and e-tickets.
Refunds: The mode of transaction in which order is canceled and the merchant has to process the refund to the user.
Void: It is similar to a refund but can be initiated only when the funds are not captured.
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How to integrate a payment gateway?
There are several methods for the integration of payment gateway into your website.
- Hosted Gateway: Hosted method is a third party integration method and the customers require to leave the current web page and are directed to the payment page to complete the payment. Here the payment processing is taken care of by a service provider, also the card details of the client are saved by the vendor thus this method does not require PCI DSS and provides easy integration. Also, the drawback of such a payment gateway is that the customers may not trust the third party payment system and directing them to a different page will lower your conversion rate creating a negative impact on your brand. Such a payment gateway is suitable for small to medium businesses.
- Non-Hosted Method: Non-Hosted methods allow customers to make payments without having to leave the current page. This method allows the integration of payment gateway through APIs. The benefits of having an integrated payment gateway are that you have full control over the transaction unlike hosted integration method and also provides easy customization of payment gateway to compliment your website. The drawback is the maintenance of the payment gateway infrastructure, also before integration of a non-hosted payment gateway you need to be PCI compliant as all the clients’ card details will be stored on your own server and it becomes quite tricky if you opt for any customization. This payment gateway is suitable for medium to high business that relies on branding and user experience.
How to integrate: Non-Hosted payment gateway integration is done via API into your website. Also, a technical team is required for the integration of payment gateway. Most non-hosted payment gateway providers have a well-documented guide readily available.
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- Direct Post Method: Direct post method allows the customers to make the payment without leaving the current web page. Also, you do not need to obtain PCI compliance. It assumes that the details of the transaction are directly sent to the payment gateway after the customer clicks on the payment button. The data is transferred to the gateway and processor without being saved on your own server. The benefits of direct post methods are similar to that of non-hosted payment gateway like the customization option but without having to be PCI compliant and the user make payments without getting directed to any other page. The drawback is that is it not completely secure. These payment gateways are suitable for all types of businesses.
How to Integrate: The payment gateway service providers may set a connection between the payment gateway and shopping cart to transfer the user’s credentials.