Types of payment gateways www.deekpay.com

What is a payment gateway

Payment GatewayA secure online technology that connects your customers' electronic payment methods to your bank, ensuring smooth and secure transactions. Payment gateways ensure secure digital transactions, timely payments and reduce cash on delivery costs for merchants. They also provide data collection, analysis and actionable insights for smarter marketing strategies and SKU management.

Recommended Reading:What is a payment gateway

Four different types of payment gateways

The main difference between different types of payment gateways is how they are integrated into a website. Some may require ongoing maintenance and technical support, while others may provide hosting support immediately.

Four different types of payment gateways:

Hosted Payment Gateway API Hosted Payment Gateway Self-hosted payment gateway Local bank integrated payment gateway 1. Hosted payment gateway

A hosted payment gateway is a payment processing solution in which a third-party service provider for your businessEscrow Paymentssystem, and then you integrate the payment system into your website or mobile app.

When customers are ready to buy, they simply click on the "Buy Now" link to go to the hosting or payment service provider (PSP) page.

How Hosted Payment Gateways Work

When a customer initiates a payment, the hosted payment gateway securely processes the transaction on its servers, handles the payment details, and then sends the status of the transaction back to the organisation's website or application.

specificities

A hosted payment gateway consists of a merchant's website or application, a hosted payment gateway service and a payment processor. The payment gateway service provider is responsible for the security and processing aspects.

When to use a hosted payment gateway

In online shops with hosted payment gateways, customer transactions are securely processed on the gateway's servers, thereby ensuring data security and compliance. This relieves businesses of payment security and compliance responsibilities and ensures seamless transactions and timely payments.

Pros: Hosted payment gateways are typically PCI DSS compliant, providing organisations with a secure, user-friendly solution for accepting payments and simplifying compliance and development. Integrating a hosted payment gateway is usually simple. You typically need to embed code or use a plugin/module for your e-commerce platform and then you're ready to accept payments. Hosted payment gateways are maintained by dedicated service providers to ensure high uptime and reliability. This means that there are fewer instances of downtime or technical issues affecting your payment processing. Drawbacks: Redirecting customers to the payment gateway page may affect the overall customer experience. Businesses have limited branding opportunities on the final payment page hosted by the payment gateway. 2. API hosted payment gateway

An API-hosted payment gateway is a payment gateway that processes payments through an application programming interface (API), thus enabling customers to stay on the merchant's website throughout the checkout experience.

API Hosted Payment Gateway provides a fully customisable checkout experience and can be integrated into a variety of systems, including mobile. As a merchant, you have full control over the website design and are responsible for the end-to-end security of your transactions.

To ensure security, you must invest in resources such as SSL certificates to protect sensitive data and ensure compliance with stringent security standards such as PCI DSS.API Hosted Payment Gateways have platform-specific features such as websites, mobile apps, customisation and easy diversification of integration needs for CMS-based plug-ins, industry-specific functionality for start-ups, small businesses, e-commerce, and many others. . This effectively enables checkout process optimisation as API payment gateways effectively streamline the checkout experience and enable customers to complete their purchases with ease.

How API-hosted payment gateways work

When a customer initiates a payment, the API-hosted payment gateway processes the transaction by securely transmitting the payment data to the payment processor and then back to the website or application to confirm the status of the transaction.

specificities

An API-hosted payment gateway consists of three main components: the merchant's website or application, the payment gateway provider's API, and the payment processor. The API acts as a bridge between the website/application and the payment processing infrastructure.

When to use an API-hosted payment gateway

Imagine an e-commerce website with an integrated API hosted payment gateway. When a customer makes a purchase, the API securely transmits the payment details to the payment processor, authorises the payment and returns the result to the website. The customer completes the purchase and the business receives prompt payment, ensuring data security and PCI DSS compliance in this seamless process.

Pros: Payment details and processing are handled on the merchant's website. Customers can complete the transaction without leaving the merchant's website, resulting in a seamless payment experience. With API integrations, organisations can expand their payment processing as their business grows without significant disruption or change to their checkout process. These gateways typically support multiple currencies and payment methods, enabling organisations to meet the needs of a global customer base. Drawbacks: API integration between merchants and payment gateways requires a level of technical expertise in areas such as programming, web development, and data security. Merchants must dedicate resources to adequately protect sensitive data and ensure compliance with strict security standards. This additional responsibility can create challenges for organisations aiming to maintain strong payment security. 3. Self-hosted payment gateway

A self-hosted payment gateway is a solution that enables organisations to efficiently and securely maintain full control over the entire payment process. With a self-hosted approach, merchants can manage and execute payment transactions directly within their infrastructure, ensuring a secure, customised and accountable payment process.

Self-hosted payment gateways allow businesses to customise and control the entire checkout process according to their specific requirements, which may include branding and user experience goals. In a self-hosted setup, the ownership and custody of payment information (such as credit card details or digital wallet data) remains firmly within the purview of the merchant. This minimises reliance on third-party providers and enhances data ownership and security.

How self-hosted payment gateways work

When a customer initiates a payment, a self-hosted payment gateway processes the transaction in the business environment, from collecting payment details to transmitting them to the payment processor.

specificities

A self-hosted payment gateway involves a merchant's website or application, self-hosted payment gateway software, and a connection to a payment processor. The business is responsible for protecting the payment data.

When to use a self-hosted payment gateway

A large organisation prioritises security and compliance and opts for a self-hosted payment gateway. They maintain control of their payment data, minimising the risk of data exposure. This approach, while requiring more security responsibilities, meets their strict security policy and compliance requirements.

Pros: Businesses can control consumer and transaction data. Self-hosted gateways offer customisation to precisely match the payment platform to the company's requirements. They offer potential cost savings for businesses. Drawbacks: Self-hosted payment gateways require more technical expertise and effort to set up and maintain, which is less convenient for merchants without extensive IT knowledge. It is the merchant's responsibility to ensure the security of customer payment data, which can be a significant burden in terms of compliance and data protection. Self-hosted gateways may involve higher initial infrastructure costs and ongoing maintenance, which may outweigh the benefits for small businesses. 4. Local bank integration gateway

A Local Bank Integration Gateway is a payment processing solution that enables organisations to integrate with local banks to facilitate online payments, ensuring seamless and region-specific transaction processing. This is primarily used as an entry-level solution with limited functionality, often lacking the ability to return or recurring payments.

How Local Banking Integration Gateway Works

When a customer initiates a payment, the Local Bank Integration Gateway facilitates the transaction by routing the payment data to the appropriate local bank, which processes the payment and returns the result to the business.

specificities

The Local Bank Integration Gateway involves a business's website or application, the Local Bank Integration Gateway software, and a connection to a local bank. This setting ensures that customers can make payments using local payment methods.

When to use the Local Bank Integration Gateway

Imagine an e-commerce platform that operates in multiple countries/regions. To enhance user experience and trust, they have integrated local bank integration gateways for each region they serve. Utilising the local bank in the customer's country/region for payment processing increases satisfaction and transaction success.

Pros: It seems to be more trustworthy because local bank integration gateways cater to the preferences of customers in a particular region by offering payment options they are familiar with. Reducing transaction costs for merchants, while local bank integration gateways increase conversion rates for businesses operating in different regions. Drawbacks: Higher technical skills are required to integrate the bank's APIs. Merchants can only offer limited payment options to their customers.

Atpay - we are a professional provider of payment solutions and have been deeply involved for many years inIndia PaymentsWe have successfully provided payment functions for countless customers at home and abroad. We are fully confident in payment integration and high-risk payment processing, and welcome inquiries and exchanges.