A payment gateway is an online service to carry out the functions of credit card and debit card payments. These payment gateways become a pathway to authorize money transfers.
In today’s time, many businesses have moved online. The business being online also requires an online mode of payment. The traditional methods are long gone due to their inability to make fast payments, credibility, and other security benefits. Some of the common types of payment gateway:
Types of Payment Gateway
Hosted Payment Gateways
Hosted payment gateway takes your customer to another page to make checkout. A new page opens after clicking on the gateway link called the payment Service provider (PSP) page. Here, the customer is asked to fill in all the essential details regarding the payment. After doing so, the customer is again taken back to the website page for further proceedings. Paypal is the most famous example of a hosted payment gateway.
- Safe and secure transactions are PCI compliant and benefit from customer fraud protection.
- Once you set up the account, payments are easy to deliver.
- You can also customize it.
- Since the gateway is external, the complete user experience is not in the hands of merchants.
Self Hosted Payment Gateways:
These types of payment gateway have payment details under the eyes of the merchant. A customer is asked for the details and then later sent to the payment gateway’s URL. Gateways require data to be submitted in a particular method. Moreover, some require a hash key or private key to function.
- Good experience for customers, everything is done on the same website.
- Merchants can customize the customer journey.
- One drawback with self-hosted gateways is the lack of a technical support team. Therefore, if there is any failure in the system, you have to figure out yourself or hire help. Hiring a professional can be a bit expensive as well.
One type of payment gateway that includes bank:
API hosted payment gateways:
In Application Programming Interface (API) customers can enter their credit or debit card details directly on the merchant’s checkout page.
- Customization is possible. Everything can be user-friendly in the payment journey.
- Can be used on different devices such as phones, tablets, etc.
- Security merchants are responsible for PCI DSS compliance and attaching SSL certificates.
Local Bank Integration:
In these types of payment gateway, customers are redirected to the bank’s website for payment. They have to fill in the details there and process the transaction. After making the payment, the customer is redirected back to the merchant website, with payment notification data sent upon redirection.
- Easy payment set up for small businesses.
- A one-time payment method is appreciated.
- Pretty basic to use. Not so ideal for big businesses or wholesalers, lack of returns or recurring payments.
For online businesses now, a self-hosted payment gateway offers the ideal experience. It offers customers a complete process of carrying out transactions in one place. And the merchant has control over the user experience.
Some examples of Payment Gateway:
- Paypal: Paypal is an online payment platform for companies to process transactions without providing financial information. It is one of the top-rated payment gateways that allow users to send or receive payments across the globe with just an email address instantly. It is very easy to buy or sell using your mobile phones on any merchant website or app. Paypal operates in 203 countries and it supports widely used credit cards like Visa, Mastercard, Citibank, American Express, etc.
- Amazon pay: Amazon Pay is a payment gateway designed for Amazon merchants and shoppers. It is an easy, fast and secure payment solution that helps people in 8 countries as of now. Amazon payments come with two different packages – log in and pay for shoppers, and pay with Amazon for merchants. This payment gateway is designed to provide a smooth shopping experience for both online retailers and sellers. Amazon pay is loaded with great features and tools that attract customers and encourage them to shop more, make their shopping process streamline, and improve customer engagement and loyalty via saved payment details for faster checkouts.
- Braintree: Braintree is a payment gateway that is part of the PayPal network. They are designed to make the payment process easier. It offers commerce tools to build global businesses, accept payments and enable commerce for their users. Comprises of tools and features that help companies to scale their businesses worldwide. Braintree operates in 40 countries worldwide. It supports 130 currencies and enjoys the benefits of faster and secure transactions. This ready-made sleek UI supports multiple cards or even PayPal transactions.
- Authorize.Net: Authorize.Net is a global payment gateway that provides strong infrastructure and security to ensure smooth, fast, and secure transfer of transactional data. It handles the routing of transactions, albeit in an online setting without software installation, just like the card swiping machine. Moreover, it has a merchant base of over 370,000 around the world. Helps to accept payments securely, providing a streamlined experience, enables scaling, and a number of other value-adding features.