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• Why build a custom gateway?

You can simply connect ready-made payment methods to your store. In the final article, we looked at the best payment gateway providers and gave a comparison chart for credit card processing. However, these options do not fully control the payment process. Also, there is always something you want to change or add.

With this in mind, we decided to share our thoughts on creating a custom gateway. We lay out the pros and cons and reveal some difficult moments for such a project.

What is a payment gateway?

A payment gateway is a complex system that provides debit/credit card payments for both online and offline businesses. It sets up a smooth channel for such transactions by encrypting confidential data and transferring it between buyers, online stores and banks. Stores act as internet payment gateway and banks act as payment processors. Therefore, the payment gateway communicated with the three participants during the payment process. Run various anti-fraud tools in accordance with pCI standards to ensure the safe operation of every transaction.

From a technical point of view, a payment gateway is a layer above a payment processor. It receives user data in an understandable format and redirects payment processors.

Payment gateways and payment providers.

It is important to understand the difference between a payment gateway and a payment provider. The former is software and the latter is the ability to use software for its intended purpose.

So just writing a working program doesn't mean you can embed it on your website or sell it to other companies right away. First, you need to connect with the payment processor through an authentication process. Note that building software is not a challenging task. In contrast, the registration process can take months or even years. Work as a supplier only after obtaining all necessary permissions.

Who needs a custom gateway?

The following are the types of companies that would benefit greatly from building a custom gateway.

Large merchants are reluctant to rely on high turnover from third-party suppliers.

An existing billing company wants to replace or update its software.

High-growth payment providers require more advanced payment processing systems.

IT plans to develop business by acting as a payment service provider.

The acquiring bank wants to improve its front-end solution.

Pros and cons of custom development.

Advantages

Low cost. With off-the-shelf online payment methods, you have to pay a lifetime fee for each action. Also, in most cases, you should pay the registration fee. Customized solutions will make you your own boss and reduce processing costs.

Custom functions. Even the best global payment processors can't meet all your expectations. If you look at the list of payment methods, you can see that some do not support multi-currency transactions, others do not support recurring charges, but others are too expensive. Choose custom development and you can get the exact product you want.

Additional income. With a payment gateway, you can be your own supplier. This means you can charge other businesses registration and transaction fees. Therefore, you can think of a new way of developing your business that will help increase your profits.

Disadvantages

Development time. You will spend time in the preparation phase, pure development, testing and maintenance. It will take longer to integrate an off-the-shelf solution. However, you will benefit in the long run as you will get rid of the recurring charges and gain an additional source of income.

Certification fees. In order to operate your gateway, you need to be connected to a payment processor and comply with pCI requirements. We should be clear that this is a long and slow process. In addition, it requires high cost. If you choose the white target solution, you can avoid headaches because when you connect to the gateway, all the dust is settled.

Sole responsibility. As a payment service provider, you are solely responsible for transaction security. Protection of Cardholder Data Protection of holder data and minimal fraud risk.