Types of Payment Gateway Integrations: How to Choose the Best

Types of Payment Gateway Integrations

If you own an eCommerce platform, you must provide your customers a secure, quick, and simple payment system.

The payment solution you select must meet the needs of both your customers and your business.

Cart abandonment significantly impacts the shopping funnel of eCommerce businesses. Any eCommerce store will tell you how much it affects their business.

Statistics and data also paint a bleak picture for them. According to Baymard Statistics, the average cart abandonment rate is 69.99%.

Cart abandonment is a serious problem when you consider how much effort and time an eCommerce website puts into creating a website/app and marketing its products.

One of the main reasons why so many people end up abandoning their shopping carts is the lack of their preferred payment methods.

So, a payment gateway must be secure, accept a range of payment methods, be easy to use, and be compatible with the platform on which your business website is built.

What is a payment gateway?

A payment gateway acts as a conduit for transactions between a shop owner and a customer. It could be an offline store, an online website, or a payment service like UPI, NEFT, or RTGS.

The payment gateway process involves four parties: the consumer, the store owner, the issuing bank, and the acquiring bank. It is a straightforward procedure.

Customers exchange personal and financial information with the shop owner by swiping their credit or debit cards or entering their bank account information.

Security layers encrypt this exchange to prevent sensitive customer information from getting into the wrong hands.

It determines the amount of money in the customer’s account that can be used for making a purchase and, accordingly, notifies if the transaction was approved or denied.

Payment gateway vs payment processor

We have already explained how the payment process works. To be successful and secure, it necessitates two basic components: payment gateways and payment processors. Explained below are some distinctions between the two:

  • The payment gateway receives the customer’s information and sends it to the payment processor for card system verification. Payment processors relay the information and ensure that the card information is valid and secure.
  • Payment gateways notify customers and merchants when transactions are approved or declined. Payment processors relay the response to the payment gateway via data transmission between issuing and receiving banks.
  • The payment gateway must encrypt and certify itself as an ISO 8583-compliant platform when transferring the data to the payment processor. As a result, payment processors have a higher development cost and take longer to develop than payment gateways. Payment gateways require basic SSL encryption.
  • Payment gateways are less expensive in terms of certification and development costs, making them ideal for startups and small businesses.

Recommended Read: Payment Gateway Vs. Payment Processor: What’s the Difference?

Types of payment gateway integrations

Because payment gateways handle critical transactions on your site, you want to ensure that everything runs smoothly. So, in this article, we will discuss different types of payment gateway integrations so that you can be well informed about your options and make the best choice.

  1. Simple checkout method (for offsite payments)

The simple checkout method is a basic integration method under which a payment gateway is integrated as an external service.

When customers click the ‘Buy Now’ or ‘Purchase’ button on a website, they are redirected to the website of the payment gateway service provider to complete a secure transaction.

This is the simplest way to incorporate a payment gateway into any website.

What’s good?

✔️ PCI compliance is not required for your website

✔️ You do not need a payment gateway

✔️ There aren’t any security issues

What’s not so good?

❌ A customer needs to leave your website to make a payment

❌ A customer may not be rerouted to your website after making a payment due to a network error

Who should choose this integration method?

Simple Checkout is ideal for small businesses that are home-based, run paid surveys, follow a paid subscription model, and so on.

  1. Direct post method (transparent redirect)

In the direct post method, the form that accepts customer information and payment details is served from your web server. However, the information is relayed to the secure payment gateway, where the transaction is eventually handled. Your website does not deal with customer data.

What’s good?

✔️ A PCI-compliant website is not required

✔️ Branding is maintained

What’s not so good?

❌ There are chances that a transaction could be compromised

Who should choose this integration method?

If you want to improve the branding of your business and maintain brand presence even when the customer is making a payment, this is the solution for you.

  1. Server integration method (for onsite payments)

This method allows you to handle transactions on your website while a payment gateway service provider handles the actual processing. All of the forms are then displayed on your website.

The payment gateway service provider handles all of the steps in the secure transaction process (payment data collection, data submission, and response to the customer), but the customer is unaware of this.

It enables you, as a merchant, to customise the design and appearance of the payment form and payment success page.

What’s good?

✔️ Enhances branding

✔️ You can securely store the customer-sensitive data

What’s not so good?

❌ PCI compliance or an SSL certificate are required

❌ As you will be keeping customer information on your website, you must improve security

Who should choose this integration method?

Medium to large-scale businesses with a strong brand use the server integration method. Although PCI compliance comes at a cost, it is necessary if you redirect your customers to a separate website.

  1. Advanced integration method

You can use the advanced integration method to host a secure payment form on your website and send transactions to the payment gateway via an end-to-end SSL connection.

Shopping cart developers use this method. It gives merchants complete control over all phases of a customer’s online transaction experience when using the method.

What’s good?

✔️ You have complete command of the transaction

✔️ You only need to connect the website to the payment gateway only once

What’s not so good?

❌ An SSL certificate is required

Who should choose this integration method?

Usually, enterprise-level businesses use the advanced integration method. However, it does not preclude you from incorporating it on your site.

Recommended Read: Factors to Consider when Integrating Payment Gateway in Android/iOS Mobile App

On a concluding note

Your customers’ trust in security is paramount. By implementing a secure payments processing system, you will generate more sales and also enable a fast and frictionless customer journey that can increase customer retention and strengthen your customer loyalty performance.

Once you have a good understanding of your business requirements, the next step is to decide which payment gateway will suit those requirements.

Payment gateways, such as Paytm Payment Gateway, now include several web and mobile applications. It is a full-service payment gateway with low processing fees, attractive MDRs, and strong security.

With Paytm Payment Gateway, you can create an automated payment process.

Get Paytm Payment Gateway today!

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