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Is Building a Custom Payment Gateway Right for You?

Is Building a Custom Payment Gateway Right for You?

Online marketplace platforms today provide a variety of products, services, employment, and business opportunities. It will come a time when, as the owner of an online marketplace platform, regardless of whatever platform you choose, you will be required to receive payment for the goods and services that sell or make payments to other merchants. Payment Service Providers and Payment Gateways enter the scene right at this step. 

For selecting the most appropriate Payment Service Provider for your unique company model, careful consideration must be given to all factors involved. You must balance your options and consider variables such as the customer experience, security, compliance, and costs.

Can I build my own payment gateway?

You also don’t have to settle with poor solutions if you don’t believe that you found the perfect match. It is always possible to develop your own Payment Gateway. You will also have the option to integrate over one Payment Service Provider, which will help you avoid becoming locked into a single vendor.

The Difference Between Payment Gateways and Payment Providers

When dealing with payments, it is critical to grasp the distinction between the payment gateway and the payment service provider. Software is one thing; the capacity to use software for its intended purpose (the second thing) is quite another.

It does not follow that building a functional software automatically qualifies you to include the application on your website or sell it to other retailers. Prior to connecting with a payment processor, you must first complete the certification procedure. We should note that developing software is not a difficult endeavor. The registration process might take months or even years. You can operate as a provider when you have got all the relevant permissions.

Who Should Have a Custom Payment Gateway?

The following are the businesses that may reap significant benefits from the development of a custom payment gateway:

  • Large-size retailers with a significant volume of transactions that do not want to be reliant on a third-party service
  • Payment service businesses who are experiencing rapid expansion and require a more sophisticated payment processing infrastructure
  • Payment service providers, such as information technology (IT) companies, that want to expand their clientele and ensure their in-house security
  • Banks that need a high level of security and confidentiality on their transactions

Yet, custom payment gateway development has both advantages and disadvantages. Let’s look at them.

Pros

#1: Lower Transaction Fees: Every time you use one of the ready-made online payment options, they subjected you certain costs. In addition, in most circumstances, they will require you to pay an enrollment fee. Being your own boss and lowering payment processing expenses are two benefits of using a customized payment solution for you.

 

#2: Customization at Its Best: All of your expectations cannot be met even by the greatest worldwide payment processor. Looking at the list of payment options, you notice that some do not handle multi-currency transactions, some do not function with recurring payments, and others are just too expensive to be worth the cost. With bespoke creation, you can ensure that you receive the precise product you desire.

#3: Making More Money: By owning a payment gateway, you can become a service provider to your own customers. It entails the ability to charge other businesses for registration fees and transaction fees. You might devise a novel approach to business growth that can aid in the expansion of your profits.

Cons

#1: Time and Effort Needed: While working on a custom payment gateway, you will spend a lot of time on the preparation phase and the pure development phase, testing, and maintenance. When compared to integrating a pre-built system, it will take longer. As a bonus, the developers of existing payment gateways have already gone through all the pathways, trials, and errors that you would go through if you were to start from scratch. Hence, there are ways to accept online payment solutions in the quickest and safest manner without the burden of development costs and efforts.

#2: Process Of Deployment: In case you want your payment gateway application to accept payments from customers in many locations. You are also adding regulatory variables to the equation as you are doing so. Then consider if you want national and international processing under the umbrella of a single comprehensive system or stay as a local gateway.

#3: Getting Certified as Payment Gateway: It is necessary to connect to the payment processor and adhere to PCI compliance criteria in order to run your gateway successfully. Please understand that this is a long and drawn-out process. Furthermore, it is rather expensive.

#4: Scalability: However, in order to design a payment gateway from scratch, you must first have a firm grasp of the relevant figures, as well as a clear understanding of how swiftly your system will run. It is very important in this situation to make precise estimates. Does the difference between 10,000 transactions per day and 10 transactions per minute make a difference to your capacity? We assume it will.

#5: Security: As a payment service provider, you are solely responsible for the security of your customers’ financial transactions. Cardholder data must be protected, and the danger of fraud must be kept to an absolute minimum. This also means investing in security software and systems.

Final Verdict

A customized payment gateway is an excellent solution for established businesses that like to operate according to their own set of standards. By creating the product from the ground up, you can change it to meet the unique demands of the customer and ensure maximum efficiency. However, for a developing company or marketplace that does not intend to make its payment gateway available to other merchants, this may appear to be an unnecessary and time-consuming operation.

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