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As an e-commerce business owner, accepting customer payments is essential to success. Let’s discuss the different types of payment gateway integration and how businesses can access seamless online payments.
Understanding Payment Gateway Integration in Detail
Payment gateway integration allows online merchants to accept electronic payments from customers for purchases made on their websites. By integrating a payment gateway, businesses can offer their customers convenient payment options directly on their site without having to manually process payments or pay high transaction fees.
The process works by redirecting customers from a merchant’s website to the payment gateway during checkout. The payment gateway then securely handles the payment information before redirecting customers back to the merchant with a confirmation. This seamless experience for customers is made possible through the different types of payment gateway integration, which will be explored below.
What is a Payment Gateway?
A payment gateway is a technology service that authorises credit card or direct payment processing for e-commerce and other online businesses. It facilitates the transfer of information and funds between an online merchant’s website and its acquiring bank or payment processor. Payment gateways encrypt sensitive information like credit cards, debit cards or bank account details to ensure secure transfer of funds.
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Top 5 Types of Payment Gateway Integrations
Based on how the checkout process flows, there are five main categories of payment gateway integration. Each has advantages and use cases for different types of online businesses.
1. Hosted Payment Gateways
One of the most common types of payment gateway integration is hosted payment gateways. With hosted payment gateways, the payment processing is handled entirely by the payment gateway. Businesses do not have to worry about security compliance, regular software updates or complex technical configurations. The payment gateway hosts the payment pages on their secure servers. When a customer checks out, they are redirected to the payment gateway’s hosted payment page where they can enter their payment details like credit card or debit card information.
After the transaction is authorised, the customer is redirected back to the merchant’s website. Hosted payment gateways are ideal for small to medium-sized businesses that do not have dedicated IT resources to manage an on-premise payment processing system. They offer a quick and hassle-free integration process.
2. Self-Hosted Payment Gateways
Another type of payment gateway integration is self-hosted payment gateways. Unlike hosted gateways, self-hosted gateways require businesses to install and integrate payment processing software on their own servers.
The business is responsible for the setup, configuration, security and maintenance of the payment processing environment. Self-hosted gateways offer more control and customisation compared to hosted gateways. However, businesses need to invest in server infrastructure, ensure PCI compliance and have in-house technical expertise to manage the system.
Self-hosted gateways are best suited for large enterprises with dedicated IT teams that can handle the end-to-end management and support of the payment processing system.
3. API (Application Programming Interface) Integration
API integration is one of the most flexible types of payment gateway integration. It allows developers to integrate payment processing functionality into their applications and websites using APIs (Application Programming Interfaces).
Businesses can leverage simple API calls to perform actions like initiating payments, getting payment statuses, refunding transactions, etc. This makes integration seamless across different platforms, such as mobile apps, web applications, and custom-built software.
API integration provides more control over the checkout flow and experience than hosted payment pages. However, technical development resources are required to integrate and maintain the APIs. Businesses with strong in-house or outsourced development capabilities benefit most from API-based payment gateway integration.
4. Direct Post Integration
Direct post-integration, also known as server-to-server integration, is another popular type used by merchants. In this method, payment details are submitted to the gateway via HTTP posts during checkout.
The checkout flow remains on the merchant’s website with the payment gateway in the background processing transactions. No redirects to external payment pages are involved. Direct post-integration allows full customisation of the checkout flow. However, it requires setting up a secure connection between the merchant and payment gateway servers.
Like API integration, direct post involves development efforts for integration. It is well-suited for merchants who want payments seamlessly embedded in their existing checkout flows without redirects.
5. Mobile Payment Gateway Integration
With the rapid growth of mobile commerce, integrating payments on mobile apps is a priority. Mobile payment gateway integration allows payment to be accepted securely across different mobile platforms. Similar to the desktop, there are hosted and direct integration options available for mobile.
Hosted mobile pages provided by payment gateways ensure cross-platform compatibility without development efforts. The alternative is to integrate payment SDKs (Software Development Kits) or APIs to accept mobile payments within native or hybrid apps. Mobile payment integration requires optimising checkout flows for smaller screens while maintaining security and performance. It is a must-have for merchants with significant mobile traffic.
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NTT DATA Payment Services offers robust payment gateway services and integrations that allow businesses to start accepting online transactions quickly and securely. Merchants can integrate APIs with their online platforms.
NTT DATA Payment Services offers a complete payment solution to advance both your offline and online businesses from,
- Online Payment Gateway in India
- POS machines
- IVR payments
- Mobile applications, and
- Bharat QR Scan and Pay
We ensure maximum comfort, convenience, and safety for all your payments.
Conclusion
Each type of payment gateway integration has advantages and use cases depending on a business’s specific needs and technical capabilities. Understanding the options available helps merchants choose the integration that best fits their online store or platform.
With so many convenient solutions on the market, there is no reason for any business not to offer their customers seamless digital checkout experiences. As technologies evolve, more innovative options will emerge in the payments space. However, these top 5 types will continue serving as the core foundations for integrated payment processing.
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Frequently Asked Questions (FAQs)
1. What is a payment gateway?
A payment gateway is a technology service that authorises credit card or direct payment processing for e-commerce and other online businesses. It facilitates the transfer of information and funds between an online merchant’s website and its acquiring bank or payment processor.
2. What are the main types of payment gateway integration?
The main types are hosted payment gateways, self-hosted payment gateways, API integration, direct post-integration, and mobile payment gateway integration.
3. What is the difference between hosted and self-hosted payment gateways?
Hosted gateways handle payment processing entirely on their servers, while self-hosted gateways require businesses to install and manage payment software on their own servers.
4. What are the advantages of API integration?
API integration allows seamless payments across different platforms like mobile and web. It provides more control over checkout flows but requires development resources.
5. How does direct post-integration work?
It submits payment details to the gateway via HTTP posts during checkout, keeping the flow on the merchant site without redirects. It allows full customisation but needs server integration.
