How to integrate with payment gateway

Payments Learning Resources

How to integrate with payment gateway

Ever considered how to integrate with payment gateway providers? A payment gateway is a merchant service used to process credit card payments. But how do you achieve integration? 

How to integrate with payment gateway to boost your business strategy

shopping integrated pattern

The utilization of a payment gateway is essential for e-commerce businesses and is used for accepting online payments, as it is used to take the customer payment information from a website, mobile device or point-of-sale device and transmit that data to the bank for approval and then back to the merchant to approve the completion of the purchase.

Before exploring the two main types of payment gateway integrations, let’s see the payment transaction types that can be executed through a payment gateway.

  • Authorization – used to identify if the cardholder has enough funds in their credit card for the transaction.
  • Capture –used to capture the amount that was authorized and send it for settlement. This is ideal when merchants do not ship orders immediately but capture the money once the shipment is gone.
  • Payment/Sale – combines authorization and capture transaction types. The transaction amount is charged and transferred immediately at once. For example, online service providers who provide access to their customers right after they pay can benefit from this type of transaction.
  • Refund – used when the order is canceled or the goods sold have been returned and the merchant has to refund the transaction amount to the customer. This type can be applied to both payment and capture transactions.
  • Void – similar to refunds but can only be applied if the transaction has not been captured yet. In this case, the transaction disappears from the customer’s account statement within 24 hours. Although a voided transaction is similar to a refund, it is processed faster and costs less.

Some of the above transaction types might be more relevant for some merchants than others, depending on the business model.

Payment gateway integration options

a graphic of integrated payment interconnected to form the shape of a love heart

How do I setup a payment gateway?

There are two main payment gateway integration options e-commerce merchants can use to connect their website to their payment service provider – a hosted integration or a direct integration.

Hosted integration

A hosted integration is the simplest of the two integration options, and it is usually selected by merchants who do not wish to collect and store customer payment details. With a hosted integration, when customers are ready to submit their payment details, they are securely transferred from the merchant’s website and complete the transaction process on the website of a payment processor. 

When the transaction is confirmed, the customer is automatically redirected back to the merchant’s store. A hosted integration can be in the form of a URL redirection to the payment processor’s payment page or in an iframe, whereby the payment processor payment page is embedded within the merchant’s website.

Advantages and Disadvantages of hosted integration

A benefit of using a hosted payment gateway integration for your e-commerce store is the extra security that comes with the gateway. By partnering with a payment service provider (PSP), you can enjoy a highly secure payment processing service. This is because PSPs use fraud and risk management tools and their payment gateways are equipped with the latest data security features to process and host the payment data of your customers. The payment processor you choose should be compliant with the Payment Card Industry Data Security Standards (PCI DSS) to ensure that secure payment processing is provided through your website.

Another benefit of a hosted payment gateway integration is the savings on development costs. By utilizing a payment page of a PSP, you can save money that would be spent on building your own payment page, and minimize the time needed to start accepting payments through your website as it is fast and easy to set up.

A disadvantage of using a hosted payment gateway is the lack of trust, especially in the case of a URL redirect. Some customers feel insecure to insert their payment information in an offsite website which might create trust issues for your business. In this case, the shopper might choose an online store that has its own payment gateway to eliminate any doubts they have regarding the safety of their card details. Merchants can select a payment provider, like Powercash21, that offers a hosted integration page that is fully customizable so that it can fully match the look and feel of their websites to alleviate this issue, whereby the transition to the hosted page is seamless to the customer.

Direct integration

integrated payment graphic with logos dropping into a shopping cart

Merchants have the option to integrate a payment gateway directly to their website. In this case, the customer stays on the merchant’s checkout page, hosted on the merchant’s servers, to pay for the product or service they want to purchase. The processing of payments in direct integrations is done with the use of an API (Application Programming Interface). In more detail, the payment details of the customers are captured on the merchant’s server and sent to the payment processor for processing purposes. When the card data has gone through fraud checks and the payment is being cleared with the acquirer, a response will be visible on your website.

Advantages and Disadvantages of Direct Integration

A major benefit of direct integration is the control that online merchants have over the payment experience of their customers. Direct integration is a way for a business to provide seamless customer experience and enhance the trust factor. Another benefit is the lower long-term costs that apply for each transaction, compared to the high per-transaction costs that merchants might be charged by their payment provider when they use a hosted payment gateway.

In order for a merchant to directly integrate a payment gateway to their website, it is a prerequisite to be PCI DSS Level I compliant and have an SSL certification, as they will be handling sensitive cardholder information. This could be a drawback for merchants who are considering a direct integration for their payment needs, as it puts extra pressure on merchants for keeping sensitive data protected, it also entails a lot of costs to obtain and maintain such a certification.

Powercash21 provides both hosted and direct payment gateway integrations to online merchants, that are cost-effective and driven by optimizing the end-user experience. Contact Powercash21 for more information on the ideal gateway integration for your business.

Sign Up To Our Newsletter

Subscribe To Our Newsletter To Get Our Latest News